Creators in the Digital Economy: Policy Initiatives to Support Recovery

Creators in the Digital Economy: Policy Initiatives to Support Recovery

State of the Sector

Creative and cultural industries have been among the worst hit by the COVID-19 pandemic, as restrictions to our lives have meant a global ban on the live consumption of cultural content. Only last week, UNESCO’s Director General Audrey Azoulay estimated that due to the closure of concert halls, theatres, bookstores and cinemas, royalties collected by creators may have dropped by 35% in 2020 (a 3.5 billion EUR loss globally).

Behind these figures, there are other threats to the livelihood of millions of creators worldwide: late last year, UNESCO reported that ten million jobs in the film industry were lost in 2020 and one third of art galleries are estimated to have halved their staff during the crisis.

The pandemic has struck at a time in which the overall creative ecosystem is experiencing a radical transformation, fuelled by the growth of new ways to disseminate and access content. New players are becoming part of the community and original types of content are on the rise, morphed by the consumption preferences of a digitally empowered audience.

Internet platforms have themselves stopped being mere tools to host and disseminate creators’ work, with some of them having moved decisively into content production. What’s more, they have been successful: some studies have shown that the streaming industry grew by an impressive 37% in 2020.

Governments, Creators, Digital Platforms

Policymakers around the world understand that the pandemic has accelerated the transformation of cultural and creative industries, and that efforts to support their recovery are inextricably linked to policies fair digital empowerment: in pledging to launch initiatives to aid the sector, G20 Culture Ministers emphasized the importance of employing new technologies, developing digital platforms for artistic expression and making cultural resources more easily accessible; meanwhile, the OECD has recommended measures to enable self-employed and other small firms to adapt to shifts in consumer habits by harnessing digital tools.

The UNESCO Culture in Crisis Report also suggests steps to enable and accelerate creators’ capabilities to thrive in the digital environment, identifying best practices such as the creation of ad hoc funds and upskilling initiatives. At the same time, this poses some problematic questions as to how policymakers can ensure that the diversity of cultural expression is better protected and promoted from the disruption embedded by the digital economy itself, suggesting that in the absence of appropriate regulation, the “monopolization of value by digital platforms owned by powerful intermediaries” can lead to more challenges than opportunities.

The latter approach is somewhat brought to life by developments at a domestic level. The perception that digital platforms are outperforming growth expectations while creators are suffering is accelerating national efforts aimed at protecting local creators. Countries like Mexico and South Africa, for instance, are discussing legislative proposals to impose a 30% quota of national content in the catalogues of online streaming platforms, while calls for customs duties on imported digital content are becoming more relevant as the international community discusses whether to renew the WTO Moratorium on Electronic Transmissions.

Risks of Protectionist Regulation and Opportunities for a Harmonized Approach

While presenting an obvious risk to the business models of online content distributors – by forcing them to offer different platforms to different markets – the benefits that these initiatives would bring to the global creative community are unclear. On the one hand, the risk of limiting the ability of creators to reach global audiences can appear itself as an obstacle to the promotion of cultural diversity. On the other, increased costs of compliance to a fragmented global regulatory environment could end up taking away resources that are invested in the production of creative content, particularly across developing countries.

The story of the creative industries’ digital transformation is not just one of giant internet players. Digital platforms have also helped African filmmakers bypass the lack of a domestic distribution markets by purchasing previously produced content and investing in new productions; Nollywood, Nigeria’s film industry, has become the second largest in the world based on number of films in production and has an incredible economic growth potential if it can take full advantage of the opportunity of reaching truly global audiences.

This year, Digital Players have a unique opportunity to share their perspective on the future of the creative ecosystem as part of global policy discussions. The 74th UN General Assembly declared 2021 the international Year of the Creative Economy for Sustainable Development, tasking UNCTAD to carry out celebrations that will include high level events such as a General Assembly High-level thematic debate on Culture and Sustainable Development.

The momentous period that creative industries are currently experiencing means that these international discussions will be unexpectedly meaningful: there are risks that they could serve as a platform to mainstream and facilitate replication of protectionist policy approaches. However, there are also opportunities to disseminate and harmonize balanced approaches that ensure creators and digital platforms can continue to thrive together.

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