The Independent View: Coalition should do more to promote the creative industries as a growth sector

WordleThe Coalition Government’s record for the creative industries is mixed.

On the plus side, innovations such as the Creative Industries Council are welcome and have enabled a lot of cross industry collaboration on common issues affecting different sectors, such as skills and access to finance.

The enabling of the Live Music Act to come into law and promises of further entertainment deregulation are of huge benefit to my sector.

Creative industries have benefited from tax breaks to enable them to continue to compete globally.

On the other side, the UK Government has embarked down a road of potentially damaging reforms to copyright, the economic framework which underpins the creative sector. The legislative framework needs to keep pace with technological developments and consumer behaviour, yet many of the reforms emanating from the Hargreaves Review of Intellectual Property and Growth seek to address problems that do not exist and are based on spurious economic projections.

The latest draft of these proposed changes to the law are so bad that they threaten the ability of the creative sector to innovate in the digital market. They devalue creators and performers rights. A further formal consultation on proposed changes to the law is surely necessary in order to safeguard the future of industries worth £36 billion.

There are huge problems with the way the Office for National Statistics accounts for and measures industries like music. UK Music supplied ONS with a database of 11,229 businesses and only 12% were correctly matched to the industrial code relating to the music industry. Half of the businesses were not found at all. This is significant as it means policy decisions are made by Government that impact our sector without a true grasp of the industries’ actual importance.

Seeing the flaws for music in the national accounts, I can only guess that the true economic value and growth potential of the creative industries could be much bigger than £36 billion.

An opportunity exists for the Government to work with the creative sector on defining and measuring the true value of sectors like music. The Coalition should be the first Government to truly acknowledge the creative industries growth potential.

Vince Cable and Jane Bonham-Carter, along with UK Music, UKIE and the CBI will be contributing to a panel discussion at Lib Dem Conference 2013 in Crowne Plaza, Argyll 3 on Tuesday 17th September at 1pm (lunch from 12.30pm) on “the economic value and growth potential of the creative industries”

* Jo Dipple is CEO of UK Music, the umbrella organisation representing the collected interests of the commercial music industry.

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10 Comments

  • Eddie Sammon 15th Sep '13 - 10:19am

    We should take our economic planning advice from economists, not people with vested interests asking for more money. I despair.

  • daft ha'p'orth 15th Sep '13 - 12:51pm

    “many of the reforms emanating from the Hargreaves Review of Intellectual Property and Growth seek to address problems that do not exist and are based on spurious economic projections.”
    Please identify these reforms and the problems they seek to address and express why you believe that these problems do not exist. Otherwise it is very difficult to engage with that remark. What is so bad? Why/how do they devalue creators’ and performers’ rights?

    Regarding the ONS: why didn’t they accept your listing of 11,229 businesses? Which 12% were accepted? Did the ONS provide a reason to disagree with 88% of the provided classifications? It seems that the ONS are incompetent, which would be a serious charge and dreadful news given their centrality to government decision-making: perhaps you would like to openly engage in discussion with ONS, publicly sharing the database, any additional evidence and any dialogue that may occur?

    In general I agree that the UK government has long since ’embarked down a road of potentially damaging reforms to copyright’. (Ridiculously long copyright terms are a good example of damaging reforms made to this key economic framework, alongside the ongoing fetishisation of surveillance and enforcement.) Copyright does not merely ‘underpin the creative sector’, but has a clear impact on the UK’s ability to compete in many other areas, such as for example the technology sector. Hence Hargreaves. Regarding the number “£36 billion”, a valuation for the UK’s creative industries oft-quoted by the Department of Culture, Media and Sport, it is worth noting that a 2012 BCG report claims the internet economy brought in £121 billion in 2012 and is expected to almost double that by 2016.

  • Hargreaves is wrong on the necessity for his reforms. It is ludicrous to argue that the law has somehow acted as a disincentive for something like parody for example. For over the last 50 years countless TV and radio programmes have been able to parody works without problem. To suggest, as Hargreaves does, that it will lead to £600 million worth of benefits is preposterous and can only mean the real impact of any reforms will be a transfer of value from one sector to another and the individual creator being the one who suffers.

    This is quite different to saying that a change in the law is not necessary, just incredibly foolish to present such a change as being a growth issue where everyone will benefit.

  • daft ha'p'orth 15th Sep '13 - 6:34pm

    countless TV and radio programmes have been able to parody works without problem
    Which is why ‘Newport state of mind’ was never pulled down from YouTube and was subsequently turned into a successful hit single, the proceeds of which were donated to charity as planned! Except, wait – it was pulled, and the single didn’t happen, because the creators of the original work wouldn’t give permission.

    In this high-profile example the law clearly became a problem. We have no fair-use exemption for parody in this country and therefore the agreement of the original creators must be sought in cases such as the Newport parody. This may, as in the Newport example, be denied. The charity that the Newport group intended to support, Newport Mind, would have benefited significantly if the single had appeared.

    You are correct that ‘countless TV and radio programmes have been able to parody works’, but I’m cheerfully going to assert that countless other artists (and the creation of parodies is itself a ‘creative industry’, one presumes?) have been denied. The individual creator suffers in the current environment because, to put it bluntly, most are the little people. They don’t have lawyers on retainer and they can’t fight their corner, so they either steer clear of the medium of parody or fire-and-forget – put it on YouTube and wait to see how long it takes before they receive a takedown notice.

    As for ‘it can only mean the real impact of any reforms will be a transfer of value from one sector to another and the individual creator being the one who suffers’, the IPO is acting from evidence that suggests otherwise. In a study of Youtube parody videos, it was found that ‘there is no evidence for economic damage to rightsholders through substitution: the presence of parody content is correlated with, and predicts larger audiences for original music videos’ (that is, the original creator gets a larger audience out of it too). And, yes, it was found that there is a ‘small but growing market’ for parody, suggesting that the cases surveyed in the IPO study currently constitute ‘a growth issue where everyone will benefit’.

    I would have to agree with you that the £600m figure sounds a little far-fetched in the context of present evidence. However, it is instructive to look at its origins. The IPO have provided an analysis that claims that parody and pastiche reform would provide £1 m cost savings per annum and £0.1 bn – £0.6 bn in yearly growth. They provide their reasoning on p29 of this document. Basically, they say that say that if the change results in one star act (‘at least one artist, show or piece of content’), those sorts of numbers are quite plausible. They also say that ‘it is important to acknowledge a high degree of uncertainty in projections of this sort’. Is that unreasonable? It’s a creative industry. Maybe someone’ll show up and use the opportunity to make something more popular than the Daily Show, maybe they won’t.

  • daft ha'p'orth 15th Sep '13 - 6:39pm

    ‘ they say that say that’ … forgive the stutter. ‘Basically, they say that…’!

  • Er, shouldn’t all industries be “creative”?

    The fact that we have a sector in the UK called “creative industries” (Surely we mean the entertainment and cultural sector? ) perhaps says something about the entrepreneurial skills and imagination of the rest of our industrial base. One of the ways countries like Italy and Germany managed to become export powerhouses was by harnessing the imagination of designers and craftspeople to make inspiring things that people just have to have. I’m of the old-fashioned view that something is only an industry if you make something physical. If you start calling everything an industry, you are only distracting from the fact that we have precious little left of the real thing.

  • Richard Dean 15th Sep '13 - 7:52pm

    I imagine the Performing Rights Society might be able to provide a very good, lower bound estimate of the annual value of creativity in the music industry. As I understand it, you cannot legally perform anything that is under copyright without paying them a fee, or play any such thing on radio or TV, or put music on an internet site.
    http://www.prsformusic.com/Pages/default.aspx

  • Steve Griffiths 15th Sep '13 - 9:05pm

    Eddie Sammon

    Economists are the last people from whom I would seek advice regarding intellectual property rights and creative works. It’s certainly a cliche, but I’m afraid they know the price of everything and the value of nothing.

    I think it may have been Winston Churchill that said of them, “if all the economists in the world were laid end to end, they wouldn’t reach a conclusion”

  • So-called “intellectual property” is an economic instrument, whose purpose is to create an economic incentive to be “creative” as opposed to copying the creative endeavours of others. Who else but economists are best placed to measure its effectiveness in achieving this ostensible aim of intellectual property rights?

  • Eddie Sammon 16th Sep '13 - 7:09am

    Steve, I admit the article raises some legal concerns that an economist wouldn’t pick up on, I just got annoyed because I don’t like the fact it seems to be asking for more help in general. All lobbying should be specific and about specific issues. We get too much lobbying about “why the industry that pays me money is great” and one way to stop it is to stop listening to it.

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