COVID-19 hits the creative and cultural sector: More than a third of the revenues have vanished
A report from Menon Economics and BI:CCI shows that the creative and cultural sector may have lost more than one-third of its income in March and April 2020. During the first six weeks of COVID-19 restrictions and bans imposed by the government, approximately NOK 1,5 billion in revenue was lost.
The coronavirus hit Norway in March 2020. On March 12 the government announced that all cultural events would be banned. From May 7 events with 50 people were allowed, and from June 15 the government permitted 200 people at events in public places that could provide a distance of at least one metre between each person. Together with Menon Economics and BI:CCI, Arts Council Norway is monitoring the situation in the creative and cultural sector during the corona crisis:
– The report from Menon and BI:CCI confirms our assumptions about how hard the creative and cultural sector has been affected by the lockdown, says Kristin Danielsen, director of Arts Council Norway. – At the same time, it shows how diverse and vulnerable the cultural economy is. In the coming weeks, we will continue to analyse how the pandemic has changed the cultural economy. Hopefully, this will give us enough knowledge to propose actions that can enable the creative and cultural sector to recover from the crisis.
Leo Grünfeld, who is the leader of Menon's COVID-19 group, points out that falling incomes in parts of the industry affect the entire food chain of the cultural economy. He is accompanied by Professor Anne-Britt Gran from BI:CCI.
– These are historic times in the creative and cultural sector, Gran says. – We have looked at the entire value chain of the different industries while calculating the fall in revenue, not just direct sales to consumers. When a concert is cancelled, many other actors lose their income in addition to the performing artist.
The pandemic affects the key industries in different ways
The findings indicate significant differences between the key industries of the creative and cultural sector and the loss of revenue during the pandemic:
- The music industry was impacted the most with as much as 50 percent drop in revenue since March 12 through April, cancellations of concerts being the main reason for this decline in income.
- The performing arts sector experienced a revenue loss of 42 percent, especially impacted by the loss of ticket sales.
- Visual arts follow with a 35 percent loss, affected by the fact that most physical galleries, art associations and art dealers were closed.
- The museums and cultural heritage sector experienced a 25 percent drop in income, caused by the lack of ticket sales.
- The literature industry is first and foremost affected by the lower sale of books in physical bookstores and lost 23 percent of its revenue.
The cultural economy is diverse and this may be why the different industries are hit differently by the pandemic. In the visual arts, half of the income is generated from the sole proprietorships. For the music industry and the performing arts, sole proprietorships make up less than 20 percent of the revenue, while they account for around 6 per cent in the literature industry and less than 1 percent in the museum sector. There are also significant differences in public funding where the performing arts, museum and cultural heritage fields have the highest proportion of federal funds.
Few artists have asked for support from the government during the COVID-19 crisis
The Norwegian government has launched an extensive COVID-19 relief package, consisting of unemployment benefits, compensation schemes, funds and loans for businesses. The creative and cultural sector has been offered a specific relief package consisting of a compensation scheme for cancelled cultural events and government grants for artists (lenke?). A significant part of the creative and cultural sector's workforce is self-employed, a group that has been granted unemployment benefits during the COVID-19 crisis.
Menon Economics and BI:CCI also conducted a survey among artists and cultural workers. 3000 individuals and 1000 organisations and companies in the creative and cultural sector responded to the survey, making it one of the most comprehensive surveys on the creative and cultural sector in Norway.
As many as 76 percent of individuals and 78 percent of organisations and companies report a significant revenue drop since March 12. Despite this loss of income, results from the survey indicate that only fifteen percent of the individual respondents have applied for support from the government's relief package during the COVID-19 crisis.
The crisis has led to new digital sources of income. However, the survey shows that these new opportunities have compensated for the loss of revenue only to a small extent.
Furthermore, the survey shows that more than half of the respondents use their personal savings to recover from the crisis. More than a quarter of the respondents receive financial contributions from family and friends.
– This survey tells us how the crisis has hit the artists and the cultural economy, says Kristin Danielsen, director of the Arts Council Norway. – It is worrying that such a big group of cultural workers experience that the relief package from the government does not match their needs.