This document discusses promoting culture and the creative arts in Europe. It makes the following key points: 1. Creative and cultural industries are substantial economic drivers in Europe, generating over €500 billion in revenues and employing over 7 million people. 2. The industries face challenges from digital disruption and potential reductions in state funding. Cultural content is adapting by diversifying formats across digital and physical media. 3. The document proposes a three-fold approach of protecting, creating, and distributing cultural works and recommends harmonizing policies around taxation, intellectual property rights, and promoting European culture globally.

1. PROMOTING CULTURE AND THE CREATIVE ARTS
Bruno Perrin – Jean-Pierre Lieb
Bruno.perrin@fr.ey.com
Jean.Pierre.Lieb@ey-avocats.com

2. Creative and Cultural Industries, little-known but substantial economic drivers
€536 Bn
revenues
7 million
jobs
3.3%
of workforce
Better growth than GDP Jobs
1.3 million
jobs
4.5%
of workforce
€84 Bn
revenues

3. CCIs : an exceptionally rich human potential
Entrepreneurship
Trades Attractiveness
1 000 trades
covered in CCIs in France
France reaps €33 Bn
in indirect economic benefits from
cultural tourism
Talent
In Europe, CCIs employ
more young people (15-29)
than any other sector
In the USA, self-employed status is
3.5 times more prevalent among
artists than in the national average

4. Digital
Culture
Culture
Digital
Culture
Digital
2000 2010 2016
vs vs +
CCIs shaken by three successive waves

5. -1.6%
Less and less State funding…
Impact of the digital revolution and the threat of less State support
Negative digital / physical balance
in France
+ € 214 M
- € 716 M

6. Growing cultural creationAbundant content
43 million
streaming tracks accessible
3.5 million
E-books downloadable on
Kindle
10 000
original videos created in YouTube
Space studios
€ 85 Bn
global online advertising revenue
Cultural content fights back by diversifying formats

7. + 3.9%
Music recorded in Germany
€ 641 million
Paid over to rights holders by video
platforms
(per 1 billion users)
300 bookshops
will be opened by Amazon in the US in
2016
+ 52% growth
in the vinyl market in the first half of 2015
in the US
Physical media strike backSteady return to financial equilibrium
Resisting the digital revolution

8. Three-fold approach : a foundation for recommendations
Protecting
Creating
Distributing

9. Fabrice Naftalski – Jean-Pierre Lieb
Fabrice.naftalski@ey-avocats.com
Jean.Pierre.Lieb@ey-avocats.com
EY RESEARCH FINDINGS

10. Misguided arguments (“faux débats”)
 Intellectual property is dead
 Intellectual property is theft
 New uses fall into a legal loophole
 Intellectual property is not eurocompatible

11. The real challenges of the Digital Single Market
 Achieve EU harmonization of intellectual property law
 Adapt intellectual property to the digital revolution
 Without jeopardizing national “ecosystems”

12. USERS
CREATORS
PRODUCERS
DISTRIBUTORS
Protection life
span?
Any
exceptions?
Rights holders
and owners?
Policy to combat
copyright infringement?
Remuneration
methods?
Portability?
Heritage
protection?
Legislative basis?
New case law concepts?
The real challenges of the Digital Single Market

13. Culture and tax in Europe
CACOPHONY INHERENT IN EUROPE
 Wide disparities in cultural policy-making within Europe are shaped
by history
 Tax and culture are alike in that both are the exclusive preserves of
States (except for indirect tax)
 The diversity of tax policies for culture is even reflected as the sheer
lack of any policy in some Member States

14. Taxation of
private
wealth
Taxation of
creative arts
Taxation of
distribution
Creating
Distributing
Protecting
Changing tax systemThree-fold foundation for trends in motion
Culture and tax in Europe

15. THE GLOBAL CHALLENGE FOR EUROPE TO STAY IN THE
CULTURAL RACE
 Culture has become a stake in the game of economic
competition and attractiveness, far exceeding the political
influence it exerts
- It is time to create a european policy as regards culture
- The principle of subsidiarity must be outgrown so as to create a European
policy for cultural diversity based on the three-fold approach
Culture and tax in Europe

16. THE GLOBAL CHALLENGE FOR EUROPE AS A CULTURAL
EXCEPTION
 WTO vs. UNESCO: is cultural diversity in jeopardy?
Europe must promote this philosophy at the forthcoming negotiation of the
Transatlantic Trade and Investment Partnership
Culture and tax in Europe

17. Bruno Perrin – Fabrice Naftalski – Jean-Pierre Lieb
Bruno.perrin@fr.ey.com
Fabrice.naftalski@ey-avocats.com
Jean.Pierre.Lieb@ey-avocats.com
CALL FOR HARMONY: PROPOSALS

18. Call for a consistent European approach to tax
 Build a Common framework of rules:
Wide range of tools to promote cultural policy:
favorable tax regime, cultural fiscal passport, etc.
 Becoming more than merely a common platform,
transitioning away from internal competition towards
support for diversity
Set up a Cultural Affairs Council built on the model of ECOFIN or the
Eurogroup.

19. Call for a consistent European approach to IP rights
 Need for (i) national ecosystems and (ii) specificities of different
sectors of activity to be taken into account
 Progressive harmonization of exceptions to IP/ownership
rights/copyright
 Reduce and harmonize the duration of IP /ownership rights/copyright
 Establish a framework for the principles of IP rights exhaustion and of
public communication/disclosure
 Enable businesses to fully understand their IP rights over their own
creations

20. Call for European culture to expand globally
 Remove culture from the scope of State aids
This is the best way to promote the aim of diversity and allow beneficial
ecosystems to flourish
 Today’s tax investments are tomorrow’s revenues
Being a part of the international fiscal reform promoted by the G20 and the
OECD (BEPS project)