Wednesday, October 08, 2008

BPN 1244 A banker's view of the Dutch creative industry

In these days of financial troubles, it is hard to read a financial report without any suspicion. But recently the Dutch cooperative Rabobank published statistics on the Dutch creative industry in its series of industrial sector reports under the title Figure and Trends. The financial figures report (sorry: in Dutch) is an addition to the Dutch 2008 Cross Media Monitor, which was put together by iMMovator in collaboration with TNO and the Rabobank.

The creative industry is a container term for a sector consisting of arts and cultural heritage, media and entertainment and creative business services. Within the subsector art and cultural heritage economic motives are subordinate to artistic motives. The activities are often sponsored by governments or semi-government institutes, not leaving the activity to the market mechanism of demand and supply. The subsector media and entertainment industry with the music industry, broadcasting, print and movie industry is very market driven and generates turn over from products and services for the consumer market. Major exception is the public broadcast system. The subsector creative business services operates on the business market, delivering products and services adding symbolic value to the products and services of their clients. In the creative business services sector operate architecture companies, consultancies, design and communication bureaus.

The Rabobank produced a financial analysis of the creative industry between 2004 and 2006. The data come from the Rabo Figures & Trends database. The database contains balance sheets of bank customers up to 2006. The statistics reflect the average company in the subsector. The figures of the art sector are base don a smaller amount of data than the other subsectors and are only indicative.

On a national level the creative industry created in 234.000 jobs in 2007. The creative business services are the largest subsector, followed by media and entertainment with 30 percent and arts and cultural heritage with 19 percent. The creative industry and ICT were the main boosters of employment with 10 percent between 1996-2007. Both sectors grew faster than the national economy and realised both in this period 4 percent turn-over growth over against an average national growth of the total economy of 2,2 percent. The creative industry as well as ICT are heavily concentrated in the Northern Wing.

The financial highlights are:
- The average company in the creative industry as well as in the subsectors have developed positively developed in the years 2004-2006. The average company in the creative industry sector realised turn-over of 689.000 euro in 2006.
- The average turn-over of a company in the creative business services was 801.000 euro, in the media- and entertainment industry 593.000 euro and in arts and cultural heritage 557.000 euro.
- The absolute profit as well as the profit percentage was raised in the period of 2004-2006: the creative business services with 6,9 percent, media and entertainment with 4% and arts and cultural heritage with 2 percent.
- Almost half of the companies in the creative industries with a turn-over smaller than 250.000 euro makes a profit after deducting the management fee.
- An average company in this sector owes 33 percent of the capital, while it also has 36 percent of foreign capital on the balance sheet. The short term foreign money is on average 20 percent.

The figures offer some ideas about the financial side of the business in the creative industry. However it would also be interesting to know what the share is of the digital creative industry, as I suspect that this is the main boost behind the growth up to 2007. Of course we will have to wait for the new figures and see in 2009, what the present financial crisis has brought on.

Blog Posting Number: 1244

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