Shaping the future: The changing cultural and creative industries

“Neustart Kultur”: The Federal Government's bailout program

In 2020 alone, the German cultural and creative industries suffered revenue losses of over 22 billion euros. In order to maintain and get the cultural infrastructure up and running again, the Federal Government launched the program in summer 2020 Neustart Kultur launched. The rescue and future program, initially amounting to one billion euros, is divided into the following four program lines:

• Pandemic-related investments (up to 250 million euros)
• Strengthening cultural infrastructure (up to 480 million euros)
• Alternative, including digital cultural offerings (up to 150 million euros)
• Compensation for pandemic-related revenue losses and additional requirements for federally funded houses and projects (up to 100 million euros)

Due to high demand, the federal government increased funding by a further billion euros in 2021. By international standards, many German artists and cultural institutions are likely to get through the crisis relatively well with the help of government support. However, the industry is concerned about the possible change in consumer habits and the transformation of the industry, which is accelerating as a result of the corona pandemic.

Problems and potential of the cultural sector

In over two years of pandemic, many art and culture lovers have been deprived of going to the theatre, visiting an exhibition or watching a film at the cinema as a matter of course. During the months-long lockdowns, many offers were streamed or made available virtually, meaning that those interested in culture could simply enjoy screenings or exhibitions from home. This may not be for everyone, but it raises the question of whether there is even an unchanged post-pandemic path back to cultural sites?

It is certain that the cultural and creative industries will continue to face extreme challenges in 2022. In addition to changing habits, strict hygiene requirements, access and visitor restrictions, the industry must also face up to “old” tasks that have come into focus as a result of the pandemic. These include, for example, increased competition as a result of establishment digital platforms and sales channels, the elimination of large art fairs, as well as new forms of design such as NFT (Non Fungible Token) for unique, digital objects.

The pandemic has exacerbated the problems that already existed before, but at the same time offers the opportunity to embark on new, creative paths and see change as normal.

From an elite art world to a connected creator economy

The new self-image and appearance of artists themselves is also central. Thanks to platforms such as Instagram, YouTube or TikTok, the image of the “artist” has changed into a “creator” in the past decade. Instead of artists who work in studios or studios and leave the marketing of their work to galleries, publishers or agents, content creators are now a “one man show.” Bloggers, influencers or YouTubers show and sell themselves, their talent or work quickly, globally, interactively and — supported by digital platforms — without intermediaries.

The so-called Creator Economy counted worldwide in 2021 more than 50 million content creators. 2.3 million people say that they market their own content full-time — and in some cases can make a much better living from it than “conventional” artists. For example, if you compare that average annual salary of a German freelancer from the music industry (around 12,000 euros in 2021) with the one Influencers (around 32,000 euros in 2021), it quickly becomes clear that content creators with the appropriate reach can earn more.

Digital self-marketing also has other advantages: Instead of selling a work of art once, popular creators generate recurring income from loyal fans who reward live streams with “coins” and affiliate marketing or merchandising. The influencers who according to a recent study The four percent worldwide who can make a living from their social media activities earn an average of 5,912 dollars a month. If you calculate the stated income down to an hourly wage, micro-influencers earn an average of 31 dollars, mega influencers even around 187 dollars per 60 minutes.

Shaping the future: digital platforms as drivers of innovation

The digital transformation in the cultural sector is unstoppable and will lead to a comprehensive transformation of society and the art sector. However, digitization does not just mean using new technology, but has a wide range of effects on the design of processes and platforms. The transformation process for artists and institutions has creative, technical, organizational and personnel dimensions. Ideally, this results in innovative business models and platforms that act as drivers of reach and promote collaboration and creativity.

The growth of the digital creative industry would be inconceivable without the rapid development of the Internet from static sites to decentralized platforms such as the Metaverse or Web3. One example of use for digital art that merges with the analog world is NFTs. Works of art or collectibles in the form of non-fungible tokens achieved record amounts in sales and auctions in 2021 and could finally reach the mainstream in 2022. Ownership claims and transaction data are stored on the Ethereum blockchain and are immutably secured. In addition to art, virtual objects such as branded sneakers, plots of land or watches (Metawatches) traded as an NFT.

Experts assume that digitized assets can certainly coexist in addition to real collectibles such as works of art or luxury cars and make collecting passion visualizable in virtual space. The cultural and creative industries can therefore continue to play a central role in the digital transformation of our society in the future, establish new business models and address target groups to whom art and culture have hitherto been inaccessible.