EMCC European Monitoring Centre on Change

Performing arts - what future?

Performing arts are classified within the broader sector of recreation, sports and culture. The first of three articles in the Sector Futures series on this sector delineates the performing arts industry sector and examines its market size, structure and nature of employment. It then discusses some of the main trends and drivers affecting the sector, as well as the principal issues and uncertainties related to performing arts.

Performing arts are classified within the broader sector of recreation, sports and culture. Since they make up only one part of the cultural sector, any statistics about market and employment specifically related to the performing arts are estimates only. Performing arts can broadly be divided into two main areas: audiovisual activities and the live performing arts. Those engaged in the live performing arts are also increasingly active in audiovisual activities, which are more directly affected by advances in digital communications technology.

The principal economic and political drivers relate to the public funding of ‘high culture’, and the role of the arts in creating employment and in urban renewal. The main issues and uncertainties relate to the capacity of public bodies and public service broadcasters to subsidise, buy or support performing arts. Digital communications technology has opened up new possibilities for the promotion, storage and dissemination of performing arts products; at the same time, they have accentuated the precariousness of much employment in this sector and its dependence on players outside the performing arts sector.

Defining the performing arts sector

The performing arts sector is treated in this article series as a sub-set of activities from NACE 92 (recreational, cultural and sporting activities) together with some activities from NACE 22 (publishing, printing and reproduction of recorded media).

Table 1: Main performing arts activities based on NACE Rev. 1.1 nomenclature, 2002
NACE division 92: Recreational, cultural and sporting activities
92.1 Motion picture and video activities
92.11 Motion picture and video production
92.12 Motion picture and video distribution
92.2 Radio and television activities
92.3 Other entertainment activities
92.31 Artistic and literary creation and interpretation
92.32 Operation of arts facilities
NACE division 22: Publishing, printing and reproduction of recorded media
22.14 Publishing of sound recordings

Source: Eurostat, 2002a.

Television and video activities are closely linked, both in terms of technology and social practice. There are also close links between video and motion picture activities, not only in methods of production, but also because motion pictures usually become available on video and watching videos or television is often considered an alternative to visiting the cinema. For historical reasons, radio listening and television viewing are seen as similar leisure activities. Thus, a broad group of production and consumer activities are encompassed under the NACE classifications 92.1 and 92.2. This group is best described as ‘audiovisual activities’. However, the sector is not limited to NACE classifications 92.1 and 92.2; it also includes NACE 22.14 activities, i.e. publishing of sound recordings.

Due to the increasing role of the Internet and the digitalisation of production and transmission methods, many of the activities in the audiovisual group overlap with the broader fields of broadcast media, as well as marketing and publicity through the Internet. Audiovisual activities related to the performing arts also encompass the convergence of Internet transmission with wireless technology. Video, voice, sound (e.g. music and broadcast plays), data, emails - virtually any kind of ‘information’ that can be transmitted electronically - can be sent to TVs, mobile phones, home computers, iPods and similar devices. Thus, the products of the performing arts are caught up in the ongoing evolution of the electronic production and transmission of information.

NACE classification 92.3, referring to ‘other entertainment activities’, covers theatres and related artistic activities, as well as musical performances. It is useful to distinguish these activities from audiovisual activities by describing them as ‘live performing arts’. The major types of live performing arts include drama, mime, dance, opera, music, musical theatre, marionettes and the circus. They are ‘live’ in the sense that they involve a performance to an audience. Therefore, this group does not include performance exclusively, or at least primarily, for broadcasting or recording. There are of course overlaps, such as when a live performance is televised or when a live concert is broadcast on the radio, but these are primarily instances of live performance.

Market size, structure and employment

The data about market and employment in the performing arts sector, used in the present article, have been drawn from the following surveys:

There are three main problems related to data about the market and employment in the performing arts sector. The first is that the most recent data available rarely concern the years after 2001. This is true of the data published in the Euromedia Handbook 2004 and in Eurostat’s Cultural employment in Europe survey. The latter covers the period 1980-2002, but in reality, 2000 is the cut-off date for most of the important data. The second problem is the limited geographical coverage of the data. Eurostat’s Cinema, TV and radio in the EU survey aims to provide data for 32 countries: the EU25, the two acceding countries, Bulgaria and Romania, the EFTA countries, Iceland, Norway, and Switzerland, and the United States (US) and Japan. However, data on the new Member States admitted into the EU in May 2004 are very fragmented. Even for the EU15, Eurostat had to estimate some totals because complete data sets were not available for all countries in the EU15. The statistical information system for audiovisual services is still being developed, and data on audiovisual services are being progressively introduced into Eurostat’s New Cronos database.

The third, and in many ways most critical, problem relates to the fact that it is very difficult to isolate employment data about the performing arts within the cultural sector. In the European Labour Force Survey (ELFS), cultural employment encompasses both cultural occupations and any employment in the cultural sectors of the economy. Cultural occupations are professional activities with a cultural dimension, such as librarians, writers, performing artists, architects, etc. Cultural sectors encompass publishing, motion picture and video activity, wholesale and retail of cultural goods. Employment in cultural sectors ranges from cultural producers (writers, artists, etc.) to technicians and administrators. Furthermore, the range of cultural employment is, for historical reasons, understood differently in different countries, and there is thus no agreed framework for the collection of statistics across Europe.

Market size

According to the Eurostat report, Cinema, TV and radio in the EU, citizens of the EU15 spent €98 billion (€259 per person) in 2001 on audiovisual services (films, TV and radio broadcasting, music and video games). This represents a slight reduction compared with the €104 billion expenditure in 2000, although the 11 September attacks in New York and the subsequent fall in advertising revenue in 2001 could be a factor here. There is every reason to believe that advertising revenue and audiovisual turnover resumed their upward trend in 2002.

Between 1997 and 2001, consumer spending (i.e. turnover) in the EU15 on audiovisual services rose by 32.8%. This was more or less the same total growth rate as the 32.5% growth recorded in the US. The US audiovisual market is, as might be expected, larger both in absolute and per capita terms: in 2001, total consumer spending amounted to €182 billion, or €638 per person.

A breakdown of consumer spending in the individual Member States is available for 2000 when total expenditure in the EU15 amounted to €91.85 billion. The United Kingdom (UK) recorded the highest total expenditure (€25.25 billion), followed by Germany (€22.65 billion) and then France (€14.77 billion). In Spain (€6.53 billion) and Italy (€7.64 billion), total consumer expenditure was just under half the French total. The lowest total recorded was €857 million in Portugal.

When spending on audiovisual services is expressed in per capita terms, several interesting features emerge. The UK’s lead becomes more pronounced: spending per person on audiovisual services was €424 in the UK, €276 in Germany, €249 in France, €166 in Spain, €137 in Italy and €86 in Portugal. Data for Greece were not available in all categories of audiovisual services but, where they were available, the levels of spending per person were close to those for Portugal. Interestingly, some of the smaller European markets have the highest levels of spending per person on audiovisual services: €276 in Denmark, €225 in Sweden and €182 in the Netherlands. Outside the EU, spending per person is very high in Norway (€405 per person) and in Iceland (€538 per person). The figure for Iceland excludes spending on video games, for which data were not available, and comes close to the figure of €621 expenditure per person in the US, which also excludes expenditure on video games. If video games are included, the US figure increases to €650.

There is clearly a correlation between household wealth and levels of expenditure per person on audiovisual services. The UK level, however, is well above what would have been expected from a relative household wealth perspective, compared with Germany. In Germany, the spending level for the whole country is presumably reduced by the spending level of east Germany. In Norway and Iceland, high levels of spending must, to some extent, be attributed to the climate and the scarcity of daylight for much of the year.

Data on audiovisual services were available only in very fragmented form for the new Member States. Excluding video games, Poland (€30) and Hungary (€27) showed similar levels of spending per person in 2000, well below the lowest levels in the EU15.

Market structure

Television broadcasting is by far the largest segment of the audiovisual market, accounting for 59% of total audiovisual turnover in the EU15 in 2000. Data on the other segments of this market are available for 2001 (data were not available for television broadcasting in 2001). The breakdown of market shares in this sector for 2001 was as follows: 14% for films, which includes cinema, video and DVDs; 10% each for radio and sound recordings; and 8% for video games.

Much of the television broadcasting content does not belong in the performing arts category, e.g. live sporting events, news bulletins, documentaries, educational programmes. Nonetheless, a substantial segment does. Apart from music and some segments of the ‘entertainment’ category, there are also the activities classed by Eurostat as ‘fiction’. This covers television series, serials, sitcoms, plays, TV films, animation and cinema films.

In 2001, the pattern in the EU15 was very close to that in the US and has no doubt in the meantime come even closer. However, two main differences remained between the EU15 and the US. First, the share of films was four percentage points higher in the US than in the EU15, on account of larger shares of video and DVDs in the US market (the share of cinema was the same at 5%). Second, the shares of sound recordings and video games were each two percentage points lower in the US.

In 2000, the television broadcasting’s 59% average share of the EU15’s audiovisual turnover conceals wide differences between the Member States. In all Member States, television broadcasting accounts for the largest share of turnover; however, the size of this market share ranges from just below 75% in the UK and Finland to 46% in Germany and Italy. In Belgium and France, the share was around 55%, while it ranged from 60% to 65% in Sweden, Spain and Denmark. In general, motion picture production accounts for less than 20% of audiovisual turnover in most Member States, but for nearly 30% of turnover in Germany and France, and 46% of turnover in Italy.

US companies accounted for almost 49% of turnover in the world’s 50 largest audiovisual companies in 2001 (taking into account only their audiovisual turnover), while European companies accounted for 32.5% of turnover and Japanese companies for 17% of turnover. Three US companies, Time Warner, Viacom and Walt Disney, were found in the top three positions, each with roughly equal turnover amounting to a total of €63 billion. The French company, Vivendi Universal, was in fifth place, behind Sony of Japan, with a turnover of nearly €16 billion. The only other European company in the top ten was Bertelsmann of Germany, which recorded a turnover of €7.3 billion - less than half of Vivendi’s turnover. It should be noted that Bertelsmann is also the largest book publisher in the world, controlling, for example, the US publisher, Random House. European companies in the top 20 were ARD (Germany), the BBC and EMI (the UK), and RAI (Italy). Two of these companies, the BBC and RAI, are public service broadcasters. The current Italian government has, however, long planned to privatise RAI, at least in part. It had planned to sell a stake of up to 30% in 2005, but this move has been delayed by parliament, probably until after the 2006 general election.

Apart from these few large European companies, the vast majority of enterprises in this sector are small. In 2000, Europe counted 53,700 such small enterprises, of which about 40,100 were involved in film activities and 13,600 in radio and television activities. Each company employed on average 10 people. The music subsector shows a very high number of micro outfits, small bands, youth groups, etc, as well as a high level of short-term and temporary employment, even for professional musicians. Positions with established orchestras are hard to find. The same is broadly true of theatrical companies in terms of employment and company size.

Employment

In its Cultural employment in Europe survey, Eurostat adheres to a broad definition of cultural employment, encompassing cultural occupations and employment in cultural sectors. On this basis, Eurostat estimated that cultural employment amounted to 4.2 million people in the EU25 in 2002, representing 2.5% of total employment. Cultural employment as a share of total employment ranges from 1.5% in Portugal and the Slovak Republic to 3.2% in the UK, 3.3% in the Netherlands, 3.5% in Finland and 3.7% in Estonia. In Germany, Spain, Italy and Belgium, the ratio varies between 2% and 3%.

The MKW study, on the other hand, uses the data from the ELFS to estimate that, on the broadest definition (i.e. including all types of ancillary workers contributing to the cultural sectors), there were 7.2 million workers in the EU15’s cultural sector in 1999. This is a far higher figure, MKW admits, than reported in other studies. MKW also estimates that 2.8 million people were employed in the EU15 in the subsector ‘recreational, cultural and sporting activities’.

A high proportion of cultural workers are university graduates (see Table 2), twice the proportion of graduates in total employment.

Table 2: Characteristics of cultural employment in Europe, %
. % of total employment % with a university degree % with a temporary job % with a part-time job % with a second job % of employers/self-employed persons
EU25 2.5 40 18 25 9 29
Austria 2 32 11 26 9 39
Belgium 2.3 51 17 21 7 29
Bulgaria 2.1 54 - 7 1 12
Cyprus 2.5 65 5 11 5 20
Czech Republic 1.8 33 15 12 7 29
Denmark 3.1 43 10 36 20 17
Estonia 3.7 60 2 13 4 5
Finland 3.5 38 24 24 8 19
France 2.1 51 29 24 10 20
Germany 2.7 36 18 30 8 30
Greece 2.5 37 21 14 9 31
Hungary 1.9 43 11 - 5 19
Iceland 4.2 44 5 41 29 35
Ireland 2.7 40 - 24 4 28
Italy 2.2 27 19 17 7 47
Latvia 1.8 35 9 10 19 6
Lithuania 2.7 79 2 15 18 8
Luxembourg 1.8 31 1 16 3 16
Netherlands 3.3 39 19 56 14 32
Norway 2.2 45 17 29 13 19
Portugal 1.4 25 35 15 13 27
Slovakia 1.4 34 5 2 6 18
Slovenia 2.5 34 26 15 3 20
Spain 2 51 34 16 6 25
Sweden 3.3 38 22 28 14 27
Switzerland 2.7 36 14 45 14 27
UK 3.2 43 10 26 7 28

Note: Data for Malta and Poland not available. Source: Eurostat, 2002b.

Within the broad category of cultural employment, Eurostat estimates in its Cinema, TV and radio in the EU study that some 555,000 people were employed in audiovisual activities across the EU15 in 2000. Data for 2001 were also available for a number of individual countries by the time the Eurostat survey was published. These show that in the two countries recording the highest employment totals in this sector - i.e. Germany and the UK - some 94,000 people were employed in television and 36,000 in films in Germany, while in the UK, 85,000 people were employed in TV and 47,000 in films. Thus, total employment in audiovisual services was almost identical in both countries, at around 130,000 employees; together, these two countries accounted for just under 50% of employment in this sector in the EU15. Turnover in the audiovisual sector, however, is far higher in the UK (€28 billion in 2000) than in Germany (€16.6 billion in 2000). The other Member States with high levels of employment in the audiovisual subsector are France (63,000 employees in 1998), Spain (61,000 employees in 2000) and Italy (49,000 employees in 2001).

There are only a few large employers in this subsector, notably the public service broadcasters. The BBC, for example, employs about 24,000 people. Nevertheless, the average number employed in each enterprise is 10 people. The cultural sector is also a precarious source of employment. According to Eurostat data, 18% of cultural workers were in temporary jobs in 2002, compared with 12% of the entire workforce; 25% were in part-time jobs, compared with 17% of the whole workforce. Furthermore, a higher proportion has more than one job, i.e. 9% compared with 3% of the overall workforce (see Table 2).

In relation to live performing artists, International Intelligence followed the estimates of the European Commission’s working paper on Cultural industries and employment and approximated that some 185,000 musicians were employed in the EU15 in 1995. This amounts to 80,000 full-time equivalents, of which roughly 150,000 people were working in popular music. Some 350,000 people were employed in theatre and dance, many of these worked on a part-time basis, or were hired for a particular production or performance. Finally, ancillary workers (technicians, maintenance staff, agents, and those involved in the organisation of concerts) amounted to 23,500 people. The countries with the highest numbers of live performing artists were believed to be France (160,000), Italy (104,000), Germany (100,000), the UK (90,000), Spain (42,400) and the Netherlands (35,000).

The precariousness of employment in the cultural sector has long been a familiar topic. It is well illustrated in the live performing arts sector by the prevalence of actors on short-term contracts and musicians, if they are not employed by an established orchestra, engaged for certain performances. Even if they are retained by an orchestra, they may only be employed for some months of the year.

The high proportion of people holding more than one job is also another long-recognised feature of the performing arts sector. Musicians, even the most eminent ones, have traditionally earned part of their living through teaching at some stage in their careers; similarly, many dancers are involved in teaching choreography. The range of work that musicians may engage in, even as performers, is expressed in this remark from Ruth Towse’s book, Singers in the market place: The economics of the singing profession (1993): ‘Classically trained singers work live in choirs and choruses, opera, oratorio, musicals and as recitalists, and in recorded work in sound recording, radio, television as well as in commercials, jingles and suchlike’.

Trends and drivers

Technological drivers

The technological drivers of the performing arts sector all relate to digitalisation and the multimedia potential of the Internet. These drivers affect the production and storage of content, the marketing and publicity of it and the distribution channels to the audience. Thus, they shape the nature of performance and the possibilities open to performers. Moreover, they require new or modified skills among performers, designers, marketers and managers, and are changing the entrepreneurial world within which performing artists work.

Meanwhile, the Internet has turned into an important medium through which the content of performing arts is advertised and marketed and through which it is made available to audiences. This trend is strengthened by the growing availability of digital media, which become the most common form of storing content. This applies particularly to the entire audiovisual sector (film, TV productions, sound broadcasting), although it is also increasingly the case for live performances, not just in relation to the recording, storage and transmission of live performances, but also with regard to the opportunities it offers live performers.

The reasons given by the BBC in October 2005 to support its case for an increase in the licence fee of 2.3% above the inflation rate, beginning in April 2007, reflect the realities of modern audiovisual production: ‘The increase is needed to cover the cost of switching over to high-definition television, the transmission of programmes through new channels such as mobile phones and broadband, the opening of its archives and to make its shows available on the Internet for up to a week after transmission’.

The BBC’s reference to mobile phones and broadband highlights one of the current transitions under way in relation to transmission. Films and television programmes can now be transmitted to and stored on iPod devices and mobile phones and then displayed on small screens (two-and-a-half inches on some iPods). In October 2005, Walt Disney and Apple Computers announced that they will sell episodes of certain television shows for storage and viewing on iPod devices. In August 2005, SonyEricsson started selling its walkman-branded mobile phone. At present, films and television programmes have to be first downloaded from the Internet and then played from storage. The next development, however, will enable people to play TV programmes or films directly from the Internet. Broadband capacity permitting this, for example, is due to be installed in the UK in 2006. Viewers will then be able to receive television or films from any source in the world, provided it has been made available on the Internet. This will tend to weaken the control of transmitting companies over the content that viewers have access to.

While digital technology, especially as embodied in the Internet and in wireless communications, opens up new channels of transmission for performers, broadcasters and other producers of content, it also extends the choice of audiences and shapes new types of demand. Broadly speaking, consumers can now choose what and where they want to see or hear content, rather than receiving transmissions at the times determined by the broadcasters and only through one type of medium. While video recording and DVDs have increased the range of options available to consumers, wireless technology greatly extends this level of choice. Although the ubiquitous home entertainment centre is more comfortable than watching transmissions on a mobile phone or iPod, the latter offer a greater range of choices to consumers in terms of viewing locations. Producers/broadcasters will therefore need to have a portfolio of offerings available for consumers.

Digital technology also provides opportunities to small enterprises to produce films, plays and music and to market them accordingly. Dissemination, however, may well be beyond their financial resources. Digital technology thus reinforces the trend for the performing arts sector to have many small companies and a high proportion of freelancers.

Economic drivers

The principal economic drivers in the performing arts sector are closely linked to the sector’s political drivers. Thus, it often makes more sense to refer to economic and political aspects as the same driver. The first and largest group of economic drivers relates to sources of revenue available to the performing arts, namely:

  • financial support and other sources of income for the traditional live performing arts (opera, theatre, concerts) and for their physical infrastructure (theatres, concert halls etc);
  • sources of revenue available to broadcasting companies, which are normally also producers, both to public service broadcasters and commercial companies;
  • financial support for companies, often start-ups, in the audiovisual sector.

It has long been recognised that the traditional performing arts - opera, orchestral music and theatre - cannot substitute technology or capital for the performers themselves. The traditional repertoire of orchestral music, grand opera or theatre generally requires the same number and range of performers today as when the pieces were first performed. Digital technology permits more efficient recording, storage and transmission of performances, but even this has its limitations. Therefore, it does not offer the same possibilities for cutting costs as it does with other types of performing arts. No one has yet advocated transmitting operatic performances or Shakespearean plays to iPod or mobile telephone screens. Concerts, of course, are a different matter.

In practice, the traditional live performing arts do not receive enough revenue through admission charges alone to pay for their performances, let alone to maintain their buildings or to erect new ones. As a result, they depend largely on public subsidies.

The largest component (just over 50%) of television broadcasting turnover in Europe is advertising revenue (see Table 3). In the UK, Sweden and the Flanders region in Belgium, public television is not allowed to carry advertising (but in the French-speaking region of Wallonia in Belgium, it is). In Ireland and Spain, advertising is the largest source of income for public service broadcasters. In Austria, the contributions of licence fees and advertising revenues are about equal (42% in 2001). In Italy, 50% of RAI’s income comes from the licence fee and 30% from advertising.

Table 3: TV broadcasting in Europe, turnover and advertising revenue in € million, 1997-2000
Public television broadcasting
.. Turnover Advertising and sponsorship revenue
.. 1997 1998 1999 2000 1997 1998 1999 2000
EU15 17,080 17,570 18,230 18,400 - - - 4,940
Austria 722 727 754 - 315 307 - 350
Belgium 218 224 233 245 42 - - 647
Denmark 547 567 575 592 - 149 138 147
Finland 339 333 318 332 - - 47 48
France 2,026 2,047 2,170 2,283 654 657 660 750
Germany 4,382 4,523 4,596 4,669 314 551 - 532
Greece - - - - 23 37 - 160
Iceland 19 20 22 23 - 5 6 6
Ireland 215 218 239 251 97 99 - 86
Luxembourg - - - - - - - -
Netherlands 579 579 560 602 126 155 - 182
Norway 327 338 - - - - - -
Portugal 195 173 202 162 64 72 75 68
Spain 1,592 1,637 1,699 1,945 - - 908 950
Sweden 386 392 397 404 2 3 - 5
Switzerland 498 595 - - 158 160 - -
UK 3,721 4,051 4,205 4,425 - - - 0
Private television broadcasting
.. Turnover Advertising and sponsorship revenue
.. 1997 1998 1999 2000 1997 1998 1999 2000
EU15 18,700 20,370 23,580 27,030 - - - 10,260
Austria - - - - - - - -
Belgium 143 156 180 207 - - - 60
Denmark - - - - - - - 98
Finland 191 209 213 222 184 193 - 200
France 3,179 3,487 3,984 4,569 1,446 1,533 1,751 1,991
Germany 4,285 4,450 5,407 6,368 - 3,724 - 4,100
Greece - - - - 564 585 - 481
Iceland 25 . 29 35 7 - - -
Ireland - - - - - - - 260
Luxembourg 323 351 407 466 - - - 255
Netherlands - - - - - - - 544
Norway 133 153 - - - - - -
Portugal 134 155 151 179 131 154 192 166
Spain 1,649 1,797 2,080 2,362 - 901 1,056 1,197
Sweden 213 231 248 297 201 217 232 274
Switzerland - - - - - - - -
UK 6,837 7,448 8,619 9,884 3,877 - - 5,524

Source: Eurostat, 2002b, p.5.

In 2001, the total spending on television advertising in the EU15 represented 82% of the total spending on audiovisual advertising (TV, radio, film and Internet) and 27% of all advertising spending (Eurostat, 2003, pp.14-15 pdf 1.4Mb). Just over 30% of TV turnover comes from public funding (including licence fees) and about 20% from subscription fees. On average in the EU15, the licence fee accounts for more than 60% of public funding of broadcasters. In the UK, Germany, Finland, Greece and Sweden, it accounts for more than 70%. In the Flanders region of Belgium, licence fees have been abolished, but not in Wallonia.

The third economic driver is the provision of financial and infrastructural support to help start-ups and through such facilities as media parks. This is discussed in the section below on political drivers.

In several European countries, the film industry receives special financial support (see the Euromedia Handbook). In the Scandinavian countries, public funding for film comes via the Danish Film Institute (Denmark), the Ministry of Culture (Norway) and, in Sweden, from mandatory contributions from the national television companies, as well as from fees on cinema tickets and video rentals. In Germany, several Länder (regional governments) - including North-Rhine Westphalia, Berlin and Bavaria - subsidise their film industries. In Hungary and the Czech Republic, there is state funding for film production: both countries have an internationally acclaimed film industry. In Poland, state funding used to be provided for film production, and Polish TV and Canal Plus Polska (a commercial television company) were active film-makers. In the economic stringency of the late 1990s, however, these sources of support dried up. In many countries, television companies are also an important source of finance for the film industry, since they commission and also produce films to be shown on television.

The extent to which European film industries depend on financial assistance is very evident from the recent history of film-making in the UK. The system of tax breaks for film production had been widely acknowledged to be open to abuse. In 2004, the UK government ended the system, without advance notice. Discussions on a replacement system started after some delay, and by the middle of 2005, a new system had been agreed upon, due to take effect from April 2006. During the period 2004-2005 therefore, investment in films became far less attractive in the UK, and employment in film production and ancillary activities is estimated to have fallen by 20%. Because of the temporary nature of much film employment, however, such a figure should be treated with caution. At the same time, UK film production began to face greater competition from the high-quality production capabilities of central Europe, above all, of the Czech Republic. For US film producers, the weakness of the dollar and the tax changes in the UK prompted them to shoot their films in locations in central rather than western Europe.

The film industry in European countries is not only very small in comparison with the US film industry, it also has a much smaller share of its own domestic market than US films. In 2001, according to the Euromedia Handbook, more than 80% of films shown in German cinemas were US productions and only 10% were German. The US proportion was smaller in Scandinavian countries: 54% in Sweden, compared to 17% for Swedish-made films, and 50% in Denmark. This imbalance has continued: in the first six months of 2005, some 17 of the top 20 films shown in the UK were US productions.

Political drivers

As discussed in the previous section, the live performing arts cannot cut or control their costs by substituting capital or technology for the labour of performers. In most European countries, it is a matter of social policy not to have the whole cost of traditional performances borne through admission prices, as this would greatly restrict the audience. There is also a long historical tradition of public funding for ‘high culture’, not only in artistic performances but also in museums and other sources of education. The reasons underlying this tradition are very complex, and are certainly not explained by considerations of financial return or economic growth.

Most European countries provide public subsidies to national theatres, operatic companies and orchestras, as well as to smaller and regional companies. Moreover, the high capital costs of building and maintaining theatres, opera houses and concert halls are often borne by central and local government. The International Intelligence study provides an interesting and detailed account of the policies governing subsidies in the early 2000s in seven EU countries: Finland, France, Germany, Italy, the Netherlands, Sweden and the UK. There is no evidence that the policies and practices in these countries have changed since then, even though less money is now being given to support European film industries. Some of the observations in this study, along with some more recent developments, are particularly pertinent for the current prospects of the live performing arts.

In the Scandinavian countries, there is a strong tradition of supporting the performing arts through subsidies. The subsidies are not all directed at national theatres and companies. In Sweden, for example, independent theatre and dance companies, which have long-standing and strong roots in local communities, account for around one-third of publicly subsidised performance companies. In the Netherlands also, where a high level of public subsidies is given to the arts, there are many private theatre companies receiving subsidies. The Scandinavian tradition of subsidising the arts continues today. Denmark’s first purpose-built opera house was opened in January 2005 at a cost of €202 million, and by 2007 the Royal Theatre will have a new home, costing €105 million, facing the opera house. In Finland, a centrepiece of the current development of the Töölönlahti district in central Helsinki is the construction of a new concert hall, due to start in 2006.

In France, the tradition of state subsidies to the performing arts goes back to the seventeenth century. Until the 1990s, Paris received most of the subsidy and this acted as a magnet for the performing artists, much as London does in the UK. Four of the five national theatres are located in Paris; the fifth is in Strasbourg. During the 1990s, however, efforts were made to decentralise the administration, at least of subsidies, to regional bodies.

In Germany, the tradition of generous public support for the arts pre-date the country’s unification in 1871. Germany’s federal structure since the Second World War has also contributed to maintaining the responsibility of Länder governments for the arts. As a result, Germany has the highest number of theatres and concert halls, relative to its population, of any country in Europe, and perhaps of any country in the world. It has, for example, more opera houses than the rest of the EU countries combined and even today, more opera houses are being added. The maintenance of most theatres and concert buildings is also publicly funded. Moreover, conditions for performing artists are more favourable in Germany than in other EU countries. Since 1983, the federally-supported Künstlersozialkasse has provided health insurance and pensions to freelance performers and creative people in the performing arts sector. In effect, therefore, the state acts as employer without actually employing the freelancers.

In the UK, public subsidies are administered through government funded arts councils, one each for England, Scotland and Wales. The arts councils receive part of their funding through the government (and the devolved administrations of Scotland and Wales) and partly through the national lottery.

In addition to the public funding of traditional performing arts, there has been increasing interest, since the mid-1990s, in the economic benefits of investment in the audiovisual sector for the leisure and tourism industries. This area of the performing arts has shown the strongest growth in employment since the mid-1990s. As multimedia and digital production have developed, the range of activities related to the production, design, marketing and distribution of artistic productions has widened. The activities relevant to the performing arts overlap with others in the area of publicity, web design, education and entertainment. The MKW study calculated that over 12 million jobs were to be found in multimedia and related software industries in the EU in 1999. Assuming that the 10% annual employment growth seen in the late-1990s slowed to around 3% per year, the study forecasts that there will be around 22 million such jobs by 2011.

As a result, urban development and regeneration policies in many European cities include the audiovisual sector as a key element in their strategies, paying particularly attention to new media. Today, it is standard for urban regeneration projects to have a mix of facilities for what is broadly dubbed ‘culture and recreation’. The facilities range from green spaces and sports facilities to cinemas, theatres, libraries and concert halls. The association of such activities is part of the phenomenon that has brought, for example, media, culture and sport together in a single government department in the UK. In fact, there could be a strong argument for treating sports players as a type of performing artist, however, that is outside the remit of this article.

In Barcelona, which already has a film industry specialising in animation, €100 million is being invested in three specialist audiovisual sites within a media park. In Germany, Berlin, Munich and Leipzig have developed into so-called ‘media cities’ (Medienstädte), while in Italy, the Prati district of Rome has become a centre for post-TV production. In 2001, a virtual reality and media park opened in Turin, dedicated to audiovisual media and virtual reality productions. In the UK, new-media initiatives in Manchester have played an important role in the regeneration of the city’s northern quarter. In the Czech city of Prague, the Sazka Arena, which opened in 2004, contains a sports arena, retail facilities and a centre for musical performances. Meanwhile, in Hungary, the Millennium City Centre in Budapest, which opened in 2002, embraces concert halls, theatres, shops, museums and libraries, many of which are dedicated to Hungarian traditions.

The European Commission has recognised the role that the audiovisual and cultural sectors could play in generating employment, and has sponsored a series of conferences on this topic (described in the International Intelligence study). Also, in 2000, a ‘Culture Programme’ was introduced, which runs until 2006 and has an annual budget of €30 million. The relatively small size of this budget can be shown by comparing it to the €307 million spent in Copenhagen on its new opera house and Royal Theatre. A new programme, Culture 2007, is being prepared to run from 1 January 2007 and will cover culture and audiovisual industries. Its three objectives, as set out in a European Commission Communication on the New generation of community education and training programmes after 2006 (pdf 192 kb, 2004b), are to encourage:

  1. transnational mobility for professionals in the cultural sector;
  2. the transnational circulation of works, including intangible works;
  3. the development of an intercultural dialogue.

The European Music Office, recognising that its aspirations must be limited within the budget of Culture 2007, has advocated the following priorities for music in this new Commission programme:

  • circulation and promotion of national music throughout Europe;
  • promotion of European music in the international market, through international promotion, exports and exchanges, and other activities such as opening European music offices in other countries (e.g. in New York, China, India, South America);
  • exchanges of information and professional training in the music industry;
  • support to small and medium-sized enterprises (SMEs), which are particularly affected by the current crisis in the recording industry.

Uncertainties and issues

Certain parts of the performing arts’ infrastructure are seen as being integral components of the infrastructure for recreation, culture and leisure. Hence, cinemas, theatres and concert halls are normally included in the facilities of leisure developments, alongside retail facilities, sporting facilities, hotels and conference centres, in the larger projects aimed at urban renewal and enhancing civic amenities. Such developments are believed to attract residents, visitors and businesses to the area and consequently to promote economic development and regeneration.

An expensive infrastructure, such as opera houses and concert halls, demands policies that are more committed to promoting ‘high culture’. They find their place in both national and provincial capitals, especially in Germany. However, support for this type of infrastructure depends on considerations wider than cost-benefit analysis and comes under threat in times of financial stringency.

For many years, performing artists have been closely involved in the audiovisual sector. This has meant that broadcasting companies have long played a leading role in supporting most activities of the performing arts. The public service broadcasters, in particular, have tended to support ‘high culture’. Legal obligations on public service broadcasters to assign a certain proportion of their programme content to cultural programmes are often imprecisely enough expressed to leave considerable leeway in the interpretation of ‘culture’. However, when costs have to be cut, and if the future of licence fees comes under threat, public service broadcasters may become less reliable as supporters of the performing arts.

For reasons of tradition and civic prestige, public bodies, including national government, are more likely to continue supporting ‘high culture’ (national theatres and opera houses) than other subsectors of the performing arts such as the film industry. In many European countries, US-made films account for between 60% and 80% of all films shown in cinemas. Although there has been a revival of cinema in several countries since the early 1990s, the major attractions have been US films. In smaller countries that have a tradition of making successful films, such as Hungary and the Czech Republic, the state may continue to support the national film industry through direct subsidies. In other countries, the industry may have to rely on being the location for US films, with only a small number of films being produced locally. As in Austria, the national film-production industry may receive most of its income from producing TV advertising and films for television. At the same time, TV broadcasters may find it easier to win audiences by buying in US TV productions.

Digital technology has increased the importance of services of website designers, and publicity and marketing experts, in promoting performing artists, whether as individuals or groups. This technology has changed the expertise and the required skills of impresarios, agents and others who promote performing artists - a role that has always been important, particularly if the artists themselves are not good at self-promotion. Digital technology has changed the way they work, giving them a wider range of opportunities. It has also made it easier for small groups or individuals to get started and to promote their own products.

The same technology is changing the ways in which the products of the performing arts reach their audience. The increasing range of media through which an audience can be reached - from televisions, computers, and mobile phones to iPods - represents only one aspect of the changes underway. The underlying shift in the relationship between audience (especially an audience of one) and performer requires that audiences can have a range of performances at their disposal in a far more sophisticated way than merely selecting a video or CD and playing it. Being able to supply such products on demand is an expensive operation. The price of one slot on Freeview’s pay-TV network, for example, was GBP 7 million per year in 2005, and ITV pays BSkyB GBP 17 million per year to transmit its three channels. Thus, performers are becoming increasingly dependent on wealthy communication companies or broadcasters.

These realities add to the precariousness of employment in the performing arts sector and to the predominance of short-term contracts and seasonal employment, even for those retained by film companies, theatres or orchestras. For the famous and well-established performers, these short-term contracts are extremely lucrative. For many others, however, the nature of work in the performing arts sector means that they have to take on more than one job to earn a living.

References

All links accessed on 25 January 2006.

Audéoud, O., Study on the mobility and free movement of people and products in the cultural sector, Brussels, European Commission, 2002, available at: http://europa.eu.int/comm/culture/eac/sources_info/pdf-word/mobility_en.pdf (pdf 104kb).

European Commission, ‘Cultural employment in Europe’, Press release on Eurostat survey, Brussels, 26 May 2004, 2004a, available at: http://europa.eu.int/rapid/pressReleasesAction.do?reference=STAT/04/68&format=HTML&aged=0&language=EN&guiLanguage=en.

European Commission, The new generation of community education and training programmes after 2006, COM (2004) 156, Brussels, July 2004, 2004b, available at: http://europa.eu.int/eur-lex/en/com/cnc/2004/com2004_0156en01.pdf (pdf 192kb).

European Commission, Culture, the cultural industries and employment, Working paper, Brussels, 1998.

European Music Office, Towards a European music policy, Brussels, 2004, available at: http://www.musicineurope.org/euaffairs/index.html.

European Parliament, Cultural industries and employment in the countries of the European Union, Summary, Luxembourg, Office for official Publications of the European Communities, 2000, available at: http://www.europarl.eu.int/workingpapers/educ/104aensum_en.htm.

Eurostat, Cultural employment in Europe, Luxembourg, 26 May 2004.

Eurostat, Cinema, TV and radio in the EU - Statistics on audiovisual services, Data 1980-2002, Luxembourg, Office for official Publications of the European Communities, 2003, available at: http://epp.eurostat.cec.eu.int/cache/ITY_OFFPUB/KS-BT-03-001/EN/KS-BT-03-001-EN.PDF (pdf 1.4Mb).

Eurostat, Statistical classification of economic activities in the European Community Rev. 1.1, 2002a, available at: http://europa.eu.int/comm/eurostat/ramon/nomenclatures/index.cfm?TargetUrl=LST_NOM_DTL&StrNom=NACE_1_1&StrLanguageCode=EN&IntPcKey=605615.

Eurostat, ‘The European TV broadcasting market’, Statistics in focus, Industry, Trade and Services, Luxembourg, Office for official Publications of the European Communities, 2002b, available at: http://epp.eurostat.cec.eu.int/cache/ITY_OFFPUB/KS-NP-02-024/EN/KS-NP-02-024-EN.PDF (pdf 338kb).

International Intelligence on Culture, Innovative developments and good practice that is promoting and safeguarding employment in the live performing arts sector in seven EU countries, London, 2001, available at: http://www.fim-musicians.com/eng/pdf/6_2.pdf (pdf 823kb).

Kelly, M., Mazzoleni, G., McQuail, D. (eds.), The media in Europe, The Euromedia Handbook, Sage, London, 2004.

MKW Wirtschaftsforschung GmbH (et al), Exploitation and development of the job potential of the cultural sector in the age of digitalisation, European Commission, 2001, available at: http://europa.eu.int/comm/employment_social/news/2001/jul/summary.pdf (pdf 458kb).

Towse, R., Singers in the market place: The economics of the singing profession, Oxford, 1993.

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