Culture exports trump financial services
Published:Sunday | October 23, 2011 | 12:00 AM
Steven Jackson, Business Reporter
Jamaica earned more net foreign exchange from cultural services which includes music, sport and film at US$23.8 million (J$2b) in 2010, than from services in finance, business, insurance and construction combined, according to newly released Bank of Jamaica (BOJ) data.
Net earnings from cultural services and recreational services declined by US$900,000 or nearly four per cent year on year, but was it was still the third highest net forex earner for the services sector, according to the Balance of Payment monthly report for May 2011.
Culture was only bettered by travel services at US$1.8 billion and communication services at US$58.7 million.
Comparatively, net forex earnings from finance, other business services, construction and insurance services recorded net outflows of negative US$13 million, negative US$365.5 million, negative US$72.6 million and negative US$147 million, respectively.
The BOJ told Sunday Business that cultural and recreational services include production of motion pictures, on film or video tape; radio and television programmes, live or on tape; and musical recordings.
The recreational category comprises services associated with museums, libraries, archives, and other cultural and sporting activities.
The rise in piracy and online free services resulted over the decade in the reduction of global sales for the film and music, which is down 27 per cent from a high of US$32.7 million in 2008.
However, Evon Mullings an economist and general manager at Jamaica Music Society (JAMMS) said that piracy accounts for only a portion of the decline. JAMMS, set up in 2006, collects royalties for record producers and those who own sound recording masters.
"It would not be reasonable to attribute the general decline in net inflows solely to the decline in sale of audio products or the shift in consumption from physical to digital audio formats," said Mullings.
"Other factors in the music industry, that contribute to net inflows, such as income from cultural professionals and practitioners, such as performing artistes and musicians, who ply their craft abroad, have also been experiencing some level of decline in demand for their services, for various reasons, especially in more recent times," he said, alluding to the revocation of US working visas for five top dancehall entertainers in April 2010 for undisclosed reasons.
The US is the world's largest music market.
Mullings said the maturation of the physical CD musical format and the rise of digital music has also affected inflows but that the "digital format, in general, is still not compensating fully for the decline in sale of physical copies".
Jamaica's copyright earnings are valued at about US$465 million, or 4.8 per cent of GDP, according to a 2008 World Intellectual Property Organisation-sponsored study conducted by Dr Vanus James.
"Not only do we have comparative advantage in the creation of our own cultural products, but there is a large external market and demand for these products and services. The correct mix of public policies, incentives and financing opportunities, industry structure, for cultural professionals, practitioners and support organisations could help to harness more of the global potential and thereby increase the net inflows for cultural industries," he argued.
JAMMS saw a net outflow of earnings from its royalty collections last year. It resulted from the island playing more international material on radio than overseas based radio stations playing Jamaican content.
"The potential does exist how-ever, for the gap between inflows and outflows to be narrowed considerably, in the medium term, as we forge more partnerships in territories where Jamaican music has significant presence, and by so doing, increase our intake of performance royalties from those foreign markets," said Mullings.
Film, music and other creative industry jobs doubled in 2010 resulting in a 61 per cent rise in spending to some J$574 million over year earlier levels, according to the Economic and Social Survey Jamaica 2010 published annually by the Planning Institute of Jamaica.
Some 1,540 persons were em-ployed for these projects, compared to about 740 in 2009, according to data published in April this year. The increased employment came when most other sectors were experiencing job cuts due to the global and local recession.