Creative Industries’ Needs: A Latent Demand

This chapter focuses on the needs of the creative industries and how the market for their services is increasing. For this purpose, the chapter is divided into two main analyses, the first covering the evolution of these sectors in the last years, while the second is focused on the advantages, advances and challenges that these industries are facing in relation to digitalisation and other emerging technologies. In the analysis of sectors, data about the number of enterprises, employees, turnover and value added were used. Concerning technologies influencing creative industries, a content analysis of 27 documents elaborated by leading consulting firms during the years 2016, 2017 and 2018 was elaborated. From this analysis, 160 codes were defined to express which advances, advantages and challenges these consulting firms have indicated for creative industries. These consulting firms are at the forefront, advising their clients on how to implement different emerging technologies, such as artificial intelligence, augmented and virtual reality and blockchain, among others.


Introduction
According to Culture Action Europe (CAE), the biggest European cultural network, "Culture is the foundation of European unity; it binds us together when pursuing shared objectives and underpins Europeans' sense of belonging to a collective project". Culture is challenging to define; a simple definition stands for "the way of life, especially the general customs and beliefs, of a particular group of people at a particular time", 1 but tactically we understand much more than this definition when talking about culture. Culture creates a belonging feeling to a place, shared gastronomy, shared traditions, shared sights, shared heritage and many more shared feelings. However, it is not a static concept. Culture evolves with society, culture is alive and creativity is one of its main characteristics. Culture is a network that generates economic, social and cultural impacts and that has to be supported.
The European Commission develops different initiatives to support Europe's cultural and creative sectors, 2 according to the Article 167 of the Treaty of the Functioning of the EU, which regulates the EU's role in the culture area. This area depends on the Directorate-General for Education, Youth, Sport and Culture department. One of this European Commission's framework programmes is Creative Europe, 3 which is devoted to supporting Europe's cultural and creative sectors by strengthening their innovativeness and competitiveness by enhancing specific skills and experience, including adaptation to digital technologies, enhancing the international cooperation or by creating new opportunities and business models.
Creative industries face two main problems for transforming their creativity and innovative skills into economic benefits and revenues: their small size and difficult access to funding (European Commission 2011). Moreover, the technological development leads to a fast digitisation (Acker et al. 2015) that has been widely supported by society, changing the way consumers access products and services, which is mainly affecting creative industries like music, books, movies and audiovisual works, which need to rapidly adapt their business models and value creation in order to survive. The analysis of the services' demand will identify the current customers' needs and help to orient their service and product offer. Moreover, and according to the European Creative Industries Alliance (2014), it is needed for someone to map and measure the effects and value added created by creative transfers to the wider economy. We will contribute to disentangling the creative industries' structure, how each subsector adds value and how the demand for services directly related to this industry is increasing, providing opportunities for establishing new businesses and taking advantage of the significant amount of knowledge that European cultural and creative industries generate.

The Market for Creative Industries
The wealth created by creative and cultural industries (CCIs) in the global economy reached 3% of the world GDP and generated 29.5 million jobs in 2013 (EY 2015). Concerning Europe, the CCIs also represented 3% of its GDP, and the associated employment accounted for 7.7 million in the same year.
In this section, each of the CCIs in the European market is explained in greater detail. To introduce them, Fig. 1 shows the weight of each sector in relation to the total value of the creative industries. The two variables included in the figure are the share of each sector in relation to the total employment and the share of each sector in relation to total revenues. The figure also shows that some sectors are more labour-intensive than others, as can be observed in music, performing arts and book sectors. In contrast, advertising, TV, visual arts and newspapers and magazines account for 67% of total revenues.
Considering the publishing industry as a whole, which includes newspapers, magazines and books, the percentage of revenues is similar to the percentage of employment of the total considered (27.3% employment and 21% in revenues), which positions the publishing industry as the most important within the creative and cultural industries.

The Publishing Market in Europe: Books, Newspapers and Magazines
The publishing industry, which includes books, newspapers and magazines, has been one of the industries most affected by the digitalisation phenomena (Acker et al. 2015). Despite this, the importance of the publishing sector in Europe remains, despite the effects of the economic crisis, as can be seen in Table 1  On the other hand, the sector has encountered different challenges during the last ten years, the majority as consequence of the economic crisis but also due to changes in technologies and their impact on the means available to read books. All these challenges have resulted in: -Lower sales and revenues, due to the economic crisis. As a result, total annual sales revenue in the EU and EEA which had reached 24,500 million € in 2007, went down to 22,000 million € in 2014 when sales hit rock bottom. Reports (PwC 2016) state that the tendency in the sector is plane. In the last several years, publishers have needed to look for innovative solutions (Sandler 2017), including supporting start-ups to obtain ideas even from outside the book industry (Voigt and de Bruijn 2017). Some of the innovative projects include e-book signing technology and adding additional digital content to the books. In these solutions, digitalisation and other technologies are seen as opportunities instead of as threats.

The Advertising Market in Europe
The advertising industry is the second largest in terms of revenues (see Fig. 1) within the creative and cultural industries in Europe. The evolution of the sector is good, as all the analysed variables had a positive variation. The total number of companies belonging to the advertising industry surpassed 270,000 in 2015 with a workforce which exceeds 780,000 people. However, what seems more important when looking at the data (see Table 2) is that the value added has increased by 18 points from 2012 to 2015.
The advertising industry is usually split into different subsectors, such as Television advertising, Newspapers advertising, Magazine advertising, Cinema advertising, Radio advertising and Outdoor advertising, which confirm the traditional media. According to Statista (2018a, b), in 2016 the expenditure on traditional advertising in Europe (in million €) was as follows: -31,415 on Television advertising (").
The digital revolution has also affected this sector and, since approximately 2006, there has been an explosion in digital advertising. Digital advertising includes online and internet advertising. The first one has increased from 6600 million € in 2006 to 41,900 million € in 2016. 4 Something similar occurred with internet advertising, which tripled its expenditure in the EU, from 13,586 million € in 2009 to 36,836 million € in 2016. The data show that digital advertisement is leading the industry and will surely define the trends and technological development that will affect the whole industry. This is why it is the main subsector to look at when looking for the identification of future needs.

The Markets for Film, TV and Radio in Europe
In third place, with a 17.3% of revenues of the total CCI industries, we find the TV sector (see Fig. 1). This figure is close to 20% if we analyse TV and radio activities together.
In Table 3 we have displayed the main indicators for TV and radio. Data show that the value added of the TV activities expenditure is important when broadcasting is delivered on TV; however, radio is only getting back 6% of the total investment, while the rest of indicators are also decreasing, which does not suggest a promising future for the radio sector unless they introduce changes. These changes should be related to the digital revolution, including for example, internet-based radio, multimedia and on-demand audio. At the moment, the different technological options still

The Music Market in Europe
Although the critical situation that the music industry suffered in the late 1990s due to the technological and digital revolution (Dolata 2011) and related problems associated with copyright regulations (Dobusch and Schüßler 2014), the expected music industry revenue worldwide is increasing, moving from 37 billion € in 2012 to an expected 46.4 million € in 2021 (Statista 2018c).
Despite the continued decline in music sales in physical format, total revenues in 2016 grew by 6%, similar to the turnover increase in the European market. Digital incomes account for 50% of global music revenues and there are 112 million users of paid streaming subscriptions (IFPI 2017).
The leading markets in Europe for the music industry are the United Kingdom, Germany and France (see Table 4). However, when recorded music revenues per capita are considered, the most important countries are Norway, the United Kingdom, Sweden, Denmark and Germany (Statista 2018c). This data indicates that users in Nordic countries spend more on music than do users in other countries. For example, during 2014, Norwegian users spent 19.15 € in music, whereas French or Spanish users spent an average of 3.1 € on music (Statista 2018c).
The music industry is split into three parts: recorded, digital and streaming music. According to Statista (2018c), the evolution of each of them, in million €, is as follows: -Recorded music, from 6600 in 2006 to 4300 in 2016 (#).
The adoption of streaming formats in Europe is different depending on the country. For example, in Sweden (country of origin of Spotify) the revenues from streaming are 69% of the total, whereas in Germany physical sales are 52% of the total market (IFPI 2017). According to the Eurobarometer (2016), almost 71% of the respondents indicated that the main reason for selecting an online music service was that it was a free service, followed by good quality (53%).
The type of access for online music does not vary too much depending on the user's age and the video or music sharing websites with a variety of music/videos that are uploaded by individual users, artists or companies is the most used type of access. What is different depending on the user's age is the time spent listening to digital music. In this case, people aged 15-24 spend almost two hours per day, while those in the 25-44 range, listen for approximately only one hour (Statista 2018c).
What we can extract from this analysis is that young people aged 15-24 years, who are the potential users in the near future, are totally adapted to the new music formats, digital and streaming, while traditional formats are rapidly declining.

Creative Industries and Emerging Technologies
During the last 15 years, internet and the digital technologies have impacted the cultural and creative industries, with special emphasis on publishing, TV and radio and music sectors. Although adapting to this change and constantly innovating, especially offering the final user new services options is necessary, it is most important to detect what the emerging technologies are that will impact the creative and cultural industries.  To analyse information in the 27 documents, QDAMiner 4 software was used and the content analysed was developed (Provalis Research, Canada). Each document was read line-by-line to define the categories (15) and codes (160). The content analysis aimed to answer the following questions: (a) What are the emerging technologies included in the documents and which creative industries are they for? (b) Why do documents indicate that emerging technologies are important for creative industries? (c) What challenges do firms in creative industries need to face in relation to emerging technologies?
Results obtained from the content analysis are included in the following subsections.

What Emerging Technologies and Creative Industries
Are Included in the Documents?
The documents analysed different technologies, which have been organised into eight codes numbered form A1 to A8 (Fig. 2). Moreover, 21 codes were defined to indicate the creative industries cited in these documents and to indicate examples of current or potential applications of emerging technologies. Figure 2 presents the co-occurrences of codes for technologies and creative industries. Music and film industries were considered in more documents linked to artificial intelligence and digitalisation. Moreover, the newspaper industry was also considered in more documents about digitalisation, while music was included in more examples with virtual reality.

Why Do Documents Indicate That Emerging Technologies Are Important for Creative Industries?
Through the content analysis, all the advantages and advances of emerging technologies were used to define different codes. These codes were grouped into four categories, one for each technology, as we explain in the next paragraphs.

Category C. Importance of Emerging Technologies for CIs in a General
Sense This category includes information in the documents which did not refer to a specific technology, but to emerging technologies in general in this category; seven codes were defined that refer to what creative industries might obtain by incorporating some of these technologies in their business models, marketing and operations. The most cited code is the opportunity that these technologies offer for creating new experiences for customers. These codes, defined through the content analysis, are: F.8. New modes of experiencing content (Hall and Takahashi 2017b; World Economic Forum 2018; McKinsey 2018). F.9. Reducing production costs in creative industries (Hall and Takahashi 2017b).
Codes indicating the use of AR and VR in specific creative industries are the following, and are referred to sectors such as design, music and publishing: F.10. In design, higher accuracy and quality in products (Hall and Takahashi 2017b). F.11. In design, shorten time and cost of iteration in new product development (Hall and Takahashi 2017b). F.12. In music, share experiences with fans, including those who lack financial means to see live music (Harding 2016). F.13. In music, sell merchandise through VR experiences (Harding 2016 Category H. Blockchain: Advantages and Advances In this category, codes obtained in the content analysis related to blockchain are included. Blockchain appeared among the ten emerging technologies of 2016 cited by the World Economic Forum (2018). The Forum listed different challenges and opportunities related to the use of blockchain, such as cost reduction when intermediaries are displaced in transactions. On the other hand, big tech firms (such as Google) might reduce some costs linked to the current systems, reaching higher levels of security and privacy for their users. Finally, they also consider that blockchain technology would incentivise higher ethical behaviour among the participants.
There are increasing examples of the potential benefits of using blockchains in the creative and cultural industries. Among these industries, music is considered as the sector which would be most affected by blockchain technology (O'Dair and Beaven 2017). Some of the advantages referred to the use of blockchain in creative industries are: • Accuracy and availability of copyright data about songs and recordings. In the content analysis undertaken for this chapter, we have found examples of the use of this technology such as Ethereum (Arthur D Little 2018), PeerTracks, Ascribe.io, Streamium, and Brave .
The codes obtained through the analysis of information in the documents and referring to how artists could benefit from using blockchain are: Category L. Extended Reality (XR): Advantages and Advances This category involves an additional emerging technology, and information compiled is focused in the document elaborated by Accenture (2018). Information codified from this document is divided into the three following codes: L.1. This technology relocates people in time and space (Accenture 2018). L.2. This technology immerses the user through visuals, audio, olfactory, and haptic cues (Accenture 2018). L.3. XR expresses data in 3D environments, closer to the way humans see and imagine scenarios (Accenture 2018).

What Challenges Do Firms in Creative Industries Face About Emerging Technologies?
In this section, the content analysed focuses on the challenges that firms and professionals in creative industries face in relation to the emerging technologies analysed in Sect. 3.2. Technologies for which challenges were found in the documents analysed are artificial intelligence, immersive technologies (AR and VR), the blockchain and digitalisation. In the next paragraphs, codes defined for each technology are presented and advice is given about the challenges firms in creative industries need to consider for the next years. These needs include talent, business models, marketing and technical limitations, among others.
Category E. Artificial Intelligence (AI): Challenges Results from the content analysis indicate that AI systems are challenging to implement, that talent is difficult to find and that governance matters to assure trust. For specific industries, like journalism, AI could force journalists into obsolescence (Hall and Takahashi 2017a (Hall and Takahashi 2017a;World Economic Forum 2018;McKinsey 2018;Hall 2018a, b;Accenture 2018). E.4. AI is not able to explain its output (Hall 2018b;World Economic Forum 2018; McKinsey 2018). E.5. Platforms influence creative content (Hall and Takahashi 2017a;Hall 2018a). E.6. AI disrupting markets and changing value chains for creative content (Hall 2018b;World Economic Forum 2018;McKinsey 2018 Category G. Augmented Reality (AR) and Virtual Reality (VR): Challenges In these technologies, challenges obtained through content analysis are primarily related to personal data that these immersive technologies can capture, and how the companies might use these data. More concretely, the codes defined in this category are the following: G.1. Immersive technologies capture more intimate personal data from users (Hall and Takahashi 2017a, b;World Economic Forum 2018;McKinsey 2018). G.2. One potential barrier to rapid progress is the lack of talent (Hall and Takahashi 2017b Category K. Digitalisation: Challenges Firms in creative industries face digitalisation technologies, which allowed others to disrupt the sectors. Codes obtained from the content analysis indicate that the majority of challenges are related to Management and Strategic issues. Taking the right decision at the right moment seems to be an essential aspect that companies in creative industries have to consider. However, scarcity of resources might be an important limit for some organisations, especially in the cultural sector. In the next codes, information for challenges are further specified:

Conclusions
In this chapter, two analyses of creative industries have been developed. The first analysis covers the study of the markets for creative industries in the last five years. For this purpose, variables like the number of employees, enterprises, revenues and value added have been used. Data indicate that the importance of these sectors in the European economy continues, despite the economic crisis. Digitalisation in these industries has been more a part of the solutions than it has been the cause of the problems, as can be observed in the sector such as publishing. However, this technology has boosted new business models based on self-publishing, thereby increasing the offering in the market and forcing incumbent companies to use new technologies across the entire value chain. In the advertising sector, digitalisation has increased internet advertising. Technologies have also impacted TV and music industries, in these cases spreading the use of streaming around European countries.
These technologies have changed how users consume TV and music content after disrupters entered the market, facilitating the shift to streaming.
The second analysis in this chapter focuses on the advantages of using emerging technologies and includes examples in specific creative industries. The advantages were explained through the content analysis of 27 documents of the most important consulting firms in the world. The documents were analysed, line-by-line, to search all the information indicating advantages, examples and challenges for technologies like artificial intelligence, augmented reality, virtual reality, blockchain and digitalisation. The analysis shows how these emerging technologies allow users to create and publish content for consumers in a different way, creating new experiences that are more personalised for users, and eliminating intermediaries in the creative process. AI, for example, can help with a task which is highly time consuming, while AR and VR increase the options for immersion in experiences. However, limitations occur in the implementation of these new technologies due to lack of talent, cost of investments, governance and technical issues. All these challenges are also included in the analysis.
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