Zealand, Sky Network Television Limited, the New Zealand Screen Association, Interactive. Games & Entertainment Asso
Employment and national GDP impacts of music, book publishing, film and television and games in New Zealand This study highlights the economic contribution of New Zealand’s music, book publishing, film and television, and games industries September 2015
Introduction We have been commissioned by Recorded Music New Zealand, APRA AMCOS, the New Zealand Music Commission, NZ On Air, Creative NZ, Te Mangai Paho, Copyright Licensing New Zealand, Sky Network Television Limited, the New Zealand Screen Association, Interactive Games & Entertainment Association and the New Zealand Games Developers Association to estimate the economic impacts of the music, book publishing, film and television and games industries in New Zealand. This document summarises the findings of these individual studies, and also provides an overarching view of the collective value of these creative industries to New Zealand. Each of these industries is evolving in response to technological changes, and the consequent impacts on traditional distribution channels and the challenges associated with copyrighted materials. This report updates the analysis we prepared for the music, book publishing and film and television industries in July 2014 (for various years covering the period between 2011 and 2013). This year, we welcome the inclusion of the games industry as another creative industry in New Zealand. These four industries are our measured creative sector. In this report, we estimate the impact of each industry and the measured creative sector for the 2014 year. These industries continue to play an important role in the New Zealand economy, supporting the employment of more than 41,000 people, including direct employees, suppliers to these industries or through the expenditure of employees in the general economy. Of course, in conjunction with other creative industries, music, books, film & television and games also play a broader role, particularly through the development of New Zealand’s creative talent which helps build national pride and identity. The impact on New Zealand’s cultural capital was outside the scope of our analysis. Similarly, we have not attempted to identify or quantify the value or impact of unauthorised access on the music, book publishing, film and television or games industries.
Summary Creative industries in New Zealand, including music, book publishing, film and television and games (the measured creative sectors) are important components of New Zealand’s culture as well as contributing towards selling the New Zealand story and brand overseas. These measured industries contribute significantly to New Zealand’s national gross domestic product (GDP) and employment (in terms of fulltime equivalents, FTEs). Figure 1 shows the GDP impact of the measured creative sectors in New Zealand in 2014. The direct contribution to New Zealand’s economy of these industries was over $1,742 million. After accounting for spillover effects, the total contribution of the measured creative industries was $3,848 million. The total contribution of the measured creative industries takes into account the upstream spending of the measured creative industries to support the direct production of films and TV shows, books, music and games in New Zealand. It also takes into account the downstream spending of people employed in the creative sector.
Figure 1: GDP impact of games, music, books and film and television ($2014) Direct impact
1,742
million NZ$
$98m $213m $128m
$1,303m
Games industry Music industry Book publishing industry Film & TV industry
$239m $472m
Total impact
3,848
million NZ$
$308m $2,829m
Source: PwC Analysis
Figure 2 shows the direct and indirect employment impacts of the measured creative sectors in New Zealand in 2014. The measured creative sectors directly employed 19,234 FTEs in 2014. Note that the employment for the film and television industry is based on 2013 data, as 2014 year data has not been released by Statistics New Zealand yet. The 2013 employment figures for the film and television industry will be updated with 2014 figures once Statistics New Zealand releases the figures. After accounting for spillover effects, the total number of FTEs supported by the creative sector was over 41,000.
The source of the employment data for the film and television sector is Statistics New Zealand’s Screen Industry Survey. In 2014, Statistics New Zealand changed from a rolling mean employment count to an employment count based on the Linked EmployerEmployee Data (LEED), a more accurate measure of employees, in the film and television industry in the Screen Industry Survey. However, there is an eighteen month lag in reporting LEED estimates due to the underlying data requirements. The LEED figures for the March 2014 year are due to be released in November 2015.
Figure 2: Employment impact of film and television, books, music and games (FTEs) Direct impact
Total impact
41,724 FTEs
19,234 FTEs Games industry
1,024 jobs
2,305 jobs
Music industry
1,754 jobs
4,295 jobs
Book publishing industry
2,026 jobs
3,708 jobs
Film & TV industry
14,431 jobs*
31,416 jobs * Employment for the film and television sector refer to the 2013 year
= 500 FTEs
Source: PwC Analysis
Figure 3 shows the breakdown of direct GDP and employment in the measured creative sectors in New Zealand. Film and television contributed the bulk of the GDP and employment in the measured creative sectors.
Figure 3: Direct GDP and employment contribution GDP
$98m, 6%
1,024, 5%
$128m, 7%
1,754, 9%
$213m, 12%
2,026, 11%
$1,303m, 75%
Games Books Source: Pwc Calculations, PwC Analysis
Employment
14,431, 75%
Music Film and television
Film and TV industry The New Zealand film and television industry is a high-productivity and high-wage sector. Figure 4 shows the GDP impact of the film and television sector in New Zealand in 2014. TV broadcasting and film and TV production are the largest subsectors of this industry. The direct GDP impact of the film and television industry in New Zealand was $1,303 million in 2014. After accounting for spillover effects, the total contribution to GDP of the film and television industry was $2,829 million. Consumption of film and television media through online channels is a growing component of the industry, which, historically, has been difficult to track. At this stage, due to the lack of data there has been no assessment of the online sector. However, the major companies active in the online market overseas have only just entered the market in New Zealand, so the impact over 2014 would have been small. There has been progress in this area and future assessments should capture online consumption more accurately.
Figure 4: GDP impact of film and television ($2014) Direct impact
1,303
million NZ$
$39m
Distribution
$14m
Home video retail
$30m
$18m
Home video rental
$39m
$66m
Film exhibition
$88m
Total impact
2,829
million NZ$
$143m
$577m
TV broadcasting
$1,252m
$588m
Production
$1,277m
Source: PwC Analysis1
Figure 5 shows the employment impact of the film and television industry. The film and television industry directly employs 14,431 FTEs and its total employment impact is 31,416 FTEs after accounting for spillover effects. Note that the employment data relates to the 2013 year for the film and television sector.
1. PwC calculations in this section use data from Statistics New Zealand and the NZ Screen Association.
Figure 5: Employment impact of film and television (FTEs)* Direct impact
Total impact
31,416 FTEs
14,431 FTEs Distribution
186 jobs
345 jobs
Home video retail
396 jobs
523 jobs
513 jobs
677 jobs
Home video rental
Film exhibition
4,986 jobs
2,226 jobs TV broadcasting
7,639 jobs
3,410 jobs Production
7,699 jobs 17,246 jobs * Employment for the film and television sector refer to the 2013 year
= 500 FTEs
Source: PwC Analysis
Figure 6: Direct impacts of film and television in terms of GDP and employment GDP
$18m, 2% $39m, 3% $66m, 5%
396, 3% 186, 1%
$14m, 1%
Employment
513, 4% 2,226, 15%
3,410, 24% $577m, 44%
$588m, 45%
Distribution Home video retail Source: PwC Analysis
7,699, 53%
Home video rental Exhibition
Broadcasting Production
Music industry New Zealand’s music industry remains a significant contributor to national GDP and employment. The retail sector, now encompassing new services such as streaming, continues to play an important role in the industry, despite the ongoing challenges with illegal and unauthorised music use. Figure 7 shows the GDP impact of the music industry in New Zealand. In 2014, the direct contribution of the music industry to New Zealand’s economy was $213m. After accounting for spillover effects, the total contribution to the New Zealand economy was $472m.
Figure 7: GDP impact of music ($2014) Direct impact
$2m
213
million NZ$
$13m $54m $48m $96m
Synchronisation Communication and public performance Retail Live music Music radio broadcasting
Total impact
$5m
472
$33m
million NZ$ $76m $120m $237m
Source: PwC Analysis2
As shown in Figure8, the music industry directly employed 1,754 FTEs in 2014. After accounting for spillover effects, the music industry supported total employment of 4,295 FTEs. The music radio broadcasting and live music subsectors are the largest contributors to the industry’s employment and GDP (refer Figure 9 overpage).
2. PwC calculations in this section use data from Statistics New Zealand, Recorded Music New Zealand, APRA|AMCOS and the NZ Music Industry Commission.
Figure 8: Employment impact of music (FTEs) Direct impact
Total impact
4,295 FTEs
1,754 FTEs Synchronisation
20 jobs
47 jobs
Communication and public performance
139 jobs
329 jobs
Retail
173 jobs
380 jobs
Live music
1,193 jobs
504 jobs Music radio broadcasting
919 jobs 2,346 jobs Source: PwC Analysis
= 100 FTEs
Figure 9: Direct impacts of music in terms of GDP and employment GDP
$13m, 6%
$2m, 1%
$48m, 23%
$54m, 25%
139, 8% 173, 10%
20, 1%
Employment
504, 29%
$96m, 45%
Synchronisation Communication and public performance Music radio broadcasting
919, 52%
Retail Live music
Book publishing industry The book publishing industry is gradually adapting to the impacts of digitisation. Online and Ebook sales are gaining a foothold in the market and it is anticipated that these sectors will become more influential on the industry’s impact on national GDP and employment. However, the sales of books online and Ebook sales are difficult to measure. Our method attempts to capture all the new products and sales channels which have become more popular over the last few years but we have found that the sampling method produces results inconsistent with market expectations, particularly at the subsector level. Figure 10 shows the GDP impact of the book publishing industry in 2014. The direct contribution of the book publishing industry in New Zealand was $128m in 2014. After accounting for spillover effects, the total contribution of the book publishing industry to New Zealand’s economy was $308m. Store based sales of physical books makes up the largest component of the industry’s GDP.
Figure 10: Employment impact of book publishing (FTEs) Direct impact
$1m
Online sales of physical books
$4m
Ebook sales
$9m
$5m
Trade sales to libraries and educational institutes
$12m
128
million NZ$
$10m
$28m
$81m
Other sales Educational publishing
Total impact
$2m
308
million NZ$
$26m
$69m
Store-based sales of physical books
$189m
Source: PwC Analysis3
Figure 11 shows the employment impact of the book publishing industry in New Zealand. The book publishing industry in New Zealand directly employed 2,026 FTEs in 2014. After accounting for spillover effects, the book publishing industry supported a total of 3,708 FTEs. The store-based sales of physical books subsector is the largest contributor to the industry’s employment.
3. PwC calculations in this section use data from Statistics New Zealand, survey data from NZ publishers, Neilsen Bookscan and Annear (2013), Educational Publishing Export Programme: Export Growth Strategy (2013-2016).
Figure 11: Employment impact of book publishing (FTEs) Direct impact
Total impact
3,708 FTEs
2,026 FTEs Online sales of physical books
10 jobs
23 jobs
Ebook sales
39 jobs
91 jobs
Trade sales to libraries and educational institutes
49 jobs
117 jobs
Other sales
107 jobs
254 jobs
Educational publishing
676 jobs
285 jobs Store-based sales of physical books
1,535 jobs 2,546 jobs = 100 FTEs
Source: PwC Analysis
Figure 12: Direct impacts of book publishing in terms of GDP and employment GDP
$4m, 3% $1m, 1% $5m, 4% $10m, 8%
39, 2% 10, 1% 49, 2% 107, 5%
Employment
285, 14%
$28m, 21%
Online sales of physical books Other sales Source: PwC Analysis
$81m, 63%
Ebook sales Educational publishing
1535, 76%
Trade sales to libraries and educational institutes Store-based sales of physical books
Games This year we also welcome the introduction of the games industry in New Zealand to the measured creative sector. The New Zealand games development industry in particular has grown rapidly in recent years, is highly export oriented, selling original IP via digital storefronts around the world. Figure 13 shows the GDP impact of the games industry in New Zealand. The direct contribution of the games industry to the New Zealand economy was $98m in 2014. After accounting for spillover effects, the total contribution of the games industry to the New Zealand economy was $239m.
Figure 13: GDP impact of games ($2014) Direct impact
98
million NZ$
$5m $11m
$82m
Publishing and distribution Retail Games development
$13m $27m
Total impact
239
million NZ$ $199m
Source: PwC Analysis4
Figure 14 shows the employment impact of the games industry in New Zealand. In 2014, the sector employed 1,024 FTEs directly. The games industry in New Zealand directly employed 535 FTEs, as programmers, artists and support staff. After accounting for spillover effects, the games industry supported employment of 2,305 FTEs.
4. PwC calculations in this section use data from Statistics New Zealand, the New Zealand Game Developers Association and the Interactive Games and Entertainment Association.
Figure 14: Employment impact of games (FTEs) Direct impact
Total impact
2,305 FTEs
1,024 FTEs Publishing and distribution
72 jobs
147 jobs
Retail
991 jobs
418 jobs Games development
1,168 jobs
535 jobs Source: PwC Analysis
= 100 FTEs
Figure 15: Direct impacts of games in terms of GDP and employment GDP
$5m, 5%
72, 7%
$11m, 11%
Employment
418, 41%
$82m, 84%
Publishing and distribution Retail Source: PwC Analysis
535, 52%
Games development
Get in touch Craig Rice Partner, Auckland T: +64 9 355 8641 M: +64 21 624 462 E:
[email protected]
Gareth Stiven Director, Auckland T: +64 9 355 8608 M: +64 27 490 3445 E:
[email protected]
This summary report is based on the findings of the following forthcoming reports: “Economic contribution of the New Zealand music industry 2014”, “Economic contribution of the New Zealand film and television industry”, “Economic contribution of the New Zealand publishing industry”, and “Economic contribution of the New Zealand games industry 2013 and 2014”. Each of these reports includes detailed background, key assumptions and disclaimers. Note that PwC has been commissioned by individual organisations to prepare the respective industry reports. The individual organisations retain the right to release their respective reports into the public realm. Please note that our estimates are exclusive of tax. © 2015 PricewaterhouseCoopers New Zealand. All rights reserved. PwC refers to the New Zealand member firm, and may sometimes refer to the PwC network. Each member firm is a separate legal entity. Please see www.pwc.com/structure for further details.
