How important is the media and content sector in the European economy?

Paper in proceeding, 2011

As part of the construction of the definition of the Information and Communication Technology (ICT) sector, in 2008, the Organization for Economic Cooperation and Development (OCED) defined media and content as part of the ICT sectors that correspond to an organized product published in the mass communication and related media activities in which the value of such a product to the consumer does not lie in its tangible qualities but, instead, in its informational, educational, cultural, or entertainment contents. Thus, based on this definition and following the classification of the International Standard Industrial Classification (ISIC), the media and content sector consists of the printing industry, motion pictures, video and television, music content, games software, and online content services. While previous studies have been measured extensively, the economic impact of the ICT sector on the growth of the economy and employment, especially broadband (among others, Crandall et al., 2003; Katz et al., 2008; Atkinson et al., 2009; Libenau et al., 2009) and telecommunication (Cronin et al., 1991; Madden and Savage, 1998; Dutta, 2001; Chakraborty and Nandi, 2003; Shiu and Lam, 2008), little attention has actually been paid to investigating the strategic position of the media and content sector. This study aims to investigate the impact analysis that measures the contribution of the media and content sector in driving economic output and decomposes the impact into several sources of growth. The study also aims to forecast the impact of a reduction in the price on the GDP. The main methodology in this study is the Input-Output (IO) table. The sample in the study consists of 11 countries in the European region that are seen as having similar characteristics to those of the “information economies” (Eichengreen, 2008), while the time series of the investigation covers the period 1995-2005. The study reveals that the price elasticity of GDP content is approximately 0.75%, with the financial, retail trade, and research and development being among the most affected sectors.