Creative industries are stronger than ever

A new report shows why "the internet is killing the entertainment industry" is as true as "home tapi

The founder of Techdirt, Michael Masnick, has released a provocative new report (pdf) called The Sky is Rising!, in which he argues that the degree to which the internet is harming the creative industries has been grossly overstated.

The most striking figure is that between 2000 and 2008, the proportion of American household expenditure going on entertainment didn't just rise, but rose by 15 per cent, from 4.9 per cent of the total to 5.62 per cent. This is over the period of YouTube, Kazaa, Bittorrent, iTunes, Netflix, Kindle, the Pirate Bay – the list of things which didn't kill the creative arts is exactly as long as the list of things which we were told would.

Employment in the sector rose too, by 20 per cent. And the size of the entertainment industry (which is, admittedly, bouyed up by a generally exuberant economy over that period) went from $449bn to $745bn in the 12 years 1998 to 2010.

This is Masnick's key point: that when you look at the industry as a whole, it is booming. It's only when you look at the old titans, especially those which were too slow to adapt, that you see the narrative which has been accepted as true for the whole sector. The report concludes:

Rather than decrying the state of the entertainment industry today and seeking new laws to protect certain aspects of the industry, we should be celebrating the growth and vitality of this vibrant part of our economy -- while consumers enjoy an amazing period of creativity.

We hope that this report will help shift the debate away from a focus on a narrow set of interests who have yet to take advantage of the new opportunities, and towards a more positive recognition of the wide-open possibilities presented by new technologies to create, promote, distribute, connect and monetize.

It would be interesting to see a similar study aimed at the UK. Compared to America, we have one hugely distortive player: The BBC. Freed from the need to make short-term profits, they were able to force the "legacy" entertainment industry to go digital far earlier than it did in the US, with the result that sites like iPlayer, and 4OD are far more popular than their direct equivalent, Hulu, is across the Atlantic. At the same time, however, the BBC set a price tag that others simply couldn't compete with, and may have hindered the success of our own version of streaming-video business Netflix. Lovefilm offers the same service (and so too does Netflix UK now) but it hasn't taken off.

Below is an infographic which sums up some of the key data Masnick relies on. Click to see it larger:

 

Star impersonators wait outside Mann's Chinese Theatre. Will they have a career in a decade? Yes. Credit: Getty

Alex Hern is a technology reporter for the Guardian. He was formerly staff writer at the New Statesman. You should follow Alex on Twitter.

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North Yorkshire has approved the UK’s first fracking tests in five years. What does this mean?

Is fracking the answer to the UK's energy future? Or a serious risk to the environment?

Shale gas operation has been approved in North Yorkshire, the first since a ban introduced after two minor earthquakes in 2011 were shown to be caused by fracking in the area. On Tuesday night, after two days of heated debate, North Yorkshire councillors finally granted an application to frack in the North York Moors National Park.

The vote by the Tory-dominated council was passed by seven votes to four, and sets an important precedent for the scores of other applications still awaiting decision across the country. It also gives a much-needed boost to David Cameron’s 2014 promise to “go all out for shale”. But with regional authorities pitted against local communities, and national government in dispute with global NGOs, what is the wider verdict on the industry?

What is fracking?

Fracking, or “hydraulic fracturing”, is the extraction of shale gas from deep underground. A mixture of water, sand and chemicals is pumped into the earth at such high pressure that it literally fractures the rocks and releases the gas trapped inside.

Opponents claim that the side effects include earthquakes, polluted ground water, and noise and traffic pollution. The image the industry would least like you to associate with the process is this clip of a man setting fire to a running tap, from the 2010 US documentary Gasland

Advocates dispute the above criticisms, and instead argue that shale gas extraction will create jobs, help the UK transition to a carbon-neutral world, reduce reliance on imports and boost tax revenues.

So do these claims stands up? Let’s take each in turn...

Will it create jobs? Yes, but mostly in the short-term.

Industry insiders imply that job creation in the UK could rival that seen in the US, while the medium-sized production company Cuadrilla claims that shale gas production would create 1,700 jobs in Lancashire alone.

But claims about employment may be exaggerated. A US study overseen by Penn State University showed only one in seven of the jobs the industry forecast actually materialised. In the UK, a Friends of the Earth report contends that the majority of jobs to be created by fracking in Lancashire would only be short-term – with under 200 surviving the initial burst.

Environmentalists, in contrast, point to evidence that green energy creates more jobs than similar-sized fossil fuel investments.  And it’s not just climate campaigners who don’t buy the employment promise. Trade union members also have their doubts. Ian Gallagher, Secretary of Blackburn and District Trade Unions Council, told Friends of the Earth that: “Investment in the areas identified by the Million Climate Jobs Campaign [...] is a far more certain way of addressing both climate change and economic growth than drilling for shale gas.”

Will it deliver cleaner energy? Not as completely as renewables would.

America’s “shale revolution” has been credited with reversing the country’s reliance on dirty coal and helping them lead the world in carbon-emissions reduction. Thanks to the relatively low carbon dioxide content of natural gas (emitting half the amount of coal to generate the same amount of electricity), fracking helped the US reduce its annual emissions of carbon dioxide by 556 million metric tons between 2007 and 2014. Banning it, advocates argue, would “immediately increase the use of coal”.

Yet a new report from the Royal Society for the Protection of Birds (previously known for its opposition to wind farm applications), has laid out a number of ways that the UK government can meet its target of 80 per cent emissions reduction by 2050 without necessarily introducing fracking and without harming the natural world. Renewable, home-produced, energy, they argue, could in theory cover the UK’s energy needs three times over. They’ve even included some handy maps:


Map of UK land available for renewable technologies. Source: RSPB’s 2050 Energy Vision.

Will it deliver secure energy? Yes, up to a point.

For energy to be “sustainable” it also has to be secure; it has to be available on demand and not threatened by international upheaval. Gas-fired “peaking” plants can be used to even-out input into the electricity grid when the sun doesn’t shine or the wind is not so blowy. The government thus claims that fracking is an essential part of the UK’s future “energy mix”, which, if produced domestically, will also free us from reliance on imports tarnished by volatile Russian politics.

But, time is running out. Recent analysis by Carbon Brief suggests that we are only have five years left of current CO2 emission levels before we blow the carbon budget and risk breaching the climate’s crucial 1.5°C tipping point. Whichever energy choices we make now need to starting brining down the carbon over-spend immediately.

Will it help stablise the wider economy? Yes, but not forever.

With so many “Yes, buts...” in the above list, you might wonder why the government is still pressing so hard for fracking’s expansion? Part of the answer may lie in their vested interest in supporting the wider industry.

Tax revenues from UK oil and gas generate a large portion of the government’s income. In 2013-14, the revenue from license fees, petroleum revenue tax, corporation tax and the supplementary charge accounted for nearly £5bn of UK exchequer receipts. The Treasury cannot afford to lose these, as evidenced in the last budget when George Osborne further subsidied North Sea oil operations through increased tax breaks.

The more that the Conservaitves support the industry, the more they can tax it. In 2012 DECC said it wanted to “guarantee... every last economic drop of oil and gas is produced for the benefit of the UK”. This is a sentiment that was repeated yesterday by energy minister Andrea Leadsom, when she welcomed the North Yorkshire decision as a “fantastic opportunity” for fracking.

Dependence on finite domestic fuel reserves, however, is not a long-term economic solution. Not least because of the question of their replacement once they eventually run out: “Pensions already have enough stranded assets as they are,” says Danielle Pafford from 350.org.

Is it worth it? Most European countries have decided it’s not.

There is currently no commercial shale-gas drilling in Europe. Sustained protests against the industry in Romania, combined with poor exploration results, have already caused energy giant Chevron to pull out of the country. Total has also abandonned explorations in Denmark, Poland is being referred to the European Court of Justice for failing to adequately assess fracking’s impact, and, in Germany, brewers have launched special bottle-caps with the slogan “Nein! Zu Fracking” to warn against the threat to their water supply.

Back in the UK, the government's latest survey of public attitudes to fracking found that 44 per cent neither supported nor opposed the practice, but also that opinion is gradually shifting out of favour. If the government doesn't come up with arguments that hold water soon, it seems likely that the UK's fracking future could still be blasted apart.

India Bourke is the New Statesman's editorial assistant.