Digital Convergence and Diminished Creative Industry Growth: A New Zealand Case Study

22 Pages Posted: 6 Aug 2016

See all articles by George Robert Barker

George Robert Barker

Australian National University; Wolson College, University of Oxford; Law and Economics Consulting Associates Ltd

Date Written: July 28, 2016

Abstract

The New Zealand Government’s recent Green Paper “Exploring Digital Convergence” (EDC) suggests that so-called “digital convergence,” or convergence in telecommunications, information technology, media and entertainment (TIME) sectors is facilitating the creation, dissemination and consumption of creative works. This paper analyses the economic performance of the film and television industry in New Zealand to see if there has been any correlated increase in revenues, employment and output during the time of this convergence. Our review suggests the evidence in New Zealand is inconsistent with any suggestion that convergence has facilitated a dramatic increase in revenues or output for the creative sector. Our findings suggest the opposite: Total screen industry revenues as measured by Statistics New Zealand’s Screen Industry Survey (SIS) which commenced in 2005 shows that from 2005-2015, there is a shortfall of total screen industry revenues over the ten-year period of approximately $4.6 billion against what they would have been had revenues kept pace with inflation and economic growth. This estimate includes just over $3 billion in the “production and post-production” (PPP) sector. Alternative scenarios described in more detail in this paper involving historical data yield estimates for the shortfall in production and post-production (PPP) revenues ranging from estimates of $3.94 billion in total over the ten-year period from 2005 to 2015, including a $600 million shortfall in the final year, to a considerably higher estimate, where the shortfall in PPP revenues reaches $4.1 billion in the last year (2015) alone. This upper scenario further suggests that by the end of the 14-year period 2001-2015, the shortfall in total screen industry revenues would have been $8.5 billion in the last year (2015) alone. In other words, total screen industry revenues in 2015 would have been closer to $12 billion in 2015, rather than $3 billion actual. At the same time, screen industry employment is also down and there has been no measurable increase in film and TV output during the data available from 2011.

The data is more consistent with the need to move to stronger copyright in New Zealand to restore the effective rate of copyright protection and stem the loss of revenue and decreased production, not weaker copyright. More advanced empirical work, of course, is justified, but at this stage this is the direction to follow if one adopts an evidence-based approach to policy.

Keywords: Intellectual property, Copyright Law, economics

JEL Classification: K11, K29

Suggested Citation

Barker, George Robert, Digital Convergence and Diminished Creative Industry Growth: A New Zealand Case Study (July 28, 2016). Available at SSRN: https://ssrn.com/abstract=2818563 or http://dx.doi.org/10.2139/ssrn.2818563

George Robert Barker (Contact Author)

Australian National University ( email )

Canberra, Australian Capital Territory 0200
Australia

Wolson College, University of Oxford ( email )

Linton Road
Oxford, OX2 6UD
United Kingdom

Law and Economics Consulting Associates Ltd ( email )

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Sydney, New South Wales 2000
Australia
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