09/06/2020 - A report by the Federal Government’s Centre of Excellence for the Cultural and Creative Industries has analysed the impact of COVID-19 on the cultural and creative industries in Germany

An ongoing report by the German Federal Government’s Centre of Excellence for the Cultural and Creative Industries, conducted on behalf of the Federal Ministry for Economic Affairs and Energy, analyses the extent to which the cultural and creative industries (CCIs) are affected by the COVID-19 pandemic in Germany, estimating that the national film industry will lose between 33% and 72% of its annual turnover (a total of about €3.4 billion-€7.3 billion) because of the pandemic. The report points out the potential scale of the economic impact on the CCIs sectors in Germany, predicting two scenarios, a moderate one and a severe one.

The study, which was last updated on 17 April, estimates that 98% of self-employed people, freelancers or companies that are active in the film sector will be very strongly affected by turnover losses. In comparison, the report predicts that 62% of those working in the music sector will be strongly affected, and this rises to 100% of self-employed people, freelancers or companies for those (previously) active in the performing arts.

Thus, heavy losses are to be expected within the film sector, the main reason being the cancellation of cinema events for film productions, a situation which, when the last update to the report was made, was expected to continue until the end of July (in a moderate scenario) or until the end of August (in a severe scenario). However, it should be noted that cinemas have since started to reopen across the country, with each region deciding on a date between 15 May and 30 June, and that productions that had ground to a halt are slowly resuming filming.

As of 17 April, it was estimated that, across the entirety of Germany, the film industry would lose 33%-72% of its annual turnover (a total of about €3.4 billion-€7.3 billion). The study pointed out that 61,000 core workers and 46,000 “mini” self-employed people work in the country’s film industry.

In detail, the report by the Federal Government’s Centre of Excellence for the Cultural and Creative Industries, which also relied on numbers provided by the German umbrella organisation of the film industry (Spitzenorganisation der Filmwirtschaft eV), took into consideration the time necessary for cinema events to restart their programme planning and predicted that movie-theatre visitors will initially be reluctant to attend indoor screenings. The study also pointed out that the closure of cinemas most heavily affects small and medium-sized cinemas. Moreover, it stressed that although the demand for entertainment and films would probably remain high, especially for movies that can be watched at home, there is a risk that the demand cannot easily be met. In addition, it pointed out that film productions would suffer because of capacity shortages and an exacerbated shortage of skilled workers. Another aspect considered was that film projects can be affected by halts in or postponements to production. The report concluded that the film industry could not expect an immediate recovery after the end of the crisis and that losses caused by the lack of revenue payouts from the exploitation of rights which will be experienced in 2021 should also be considered.

The report also focuses on the impact of the COVID-19 pandemic on television broadcasters, predicting that the German broadcasting industry is likely to be more strongly affected than had initially been assumed, the cause being that the decline in advertising revenues should be expected to continue until at least September 2020. For the entire broadcasting industry, for radio and television broadcasters together, the turnover losses were estimated to reach almost €1.1 billion (equivalent to 10% of annual turnover) in the moderate scenario and €1.9 billion (17% of the annual turnover) in the severe scenario. As for the software/games industry, the report estimated that it would be significantly less affected than the film industry.

The study predicts that, overall, the creative industries (the advertising market and the software/games industry) will be significantly less affected than the cultural industries, expecting that more than 70% of the CCIs’ overall turnover losses will be attributable to the cultural industries. In a moderate scenario, this accounts for €15.9 billion and in a severe scenario for €30.7 billion.

As for the overall impact on the cultural and creative industries in Germany, the report estimates that in a moderate scenario, the CCIs will experience turnover losses of approximately €21.7 billion (equalling 12.7% of its annual turnover). In a severe scenario, the estimated turnover losses amount to €39.8 billion (almost 23% of the annual turnover).