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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Geoffrey Howe dies, aged 88

Howe was Margaret Thatcher's longest serving Cabinet minister – and the man credited with precipitating her downfall.

The former Conservative chancellor Lord Howe, a key figure in the Thatcher government, has died of a suspected heart attack, his family has said. He was 88.

Geoffrey Howe was the longest-serving member of Margaret Thatcher's Cabinet, playing a key role in both her government and her downfall. Born in Port Talbot in 1926, he began his career as a lawyer, and was first elected to parliament in 1964, but lost his seat just 18 months later.

Returning as MP for Reigate in the Conservative election victory of 1970, he served in the government of Edward Heath, first as Solicitor General for England & Wales, then as a Minister of State for Trade. When Margaret Thatcher became opposition leader in 1975, she named Howe as her shadow chancellor.

He retained this brief when the party returned to government in 1979. In the controversial budget of 1981, he outlined a radical monetarist programme, abandoning then-mainstream economic thinking by attempting to rapidly tackle the deficit at a time of recession and unemployment. Following the 1983 election, he was appointed as foreign secretary, in which post he negotiated the return of Hong Kong to China.

In 1989, Thatcher demoted Howe to the position of leader of the house and deputy prime minister. And on 1 November 1990, following disagreements over Britain's relationship with Europe, he resigned from the Cabinet altogether. 

Twelve days later, in a powerful speech explaining his resignation, he attacked the prime minister's attitude to Brussels, and called on his former colleagues to "consider their own response to the tragic conflict of loyalties with which I have myself wrestled for perhaps too long".

Labour Chancellor Denis Healey once described an attack from Howe as "like being savaged by a dead sheep" - but his resignation speech is widely credited for triggering the process that led to Thatcher's downfall. Nine days later, her premiership was over.

Howe retired from the Commons in 1992, and was made a life peer as Baron Howe of Aberavon. He later said that his resignation speech "was not intended as a challenge, it was intended as a way of summarising the importance of Europe". 

Nonetheless, he added: "I am sure that, without [Thatcher's] resignation, we would not have won the 1992 election... If there had been a Labour government from 1992 onwards, New Labour would never have been born."

Jonn Elledge is the editor of the New Statesman's sister site CityMetric. He is on Twitter, far too much, as @JonnElledge.