Brussels, 30th June 2011
IMPALA Statement: Independent music companies welcome EC proposal for cultural industry fund
The EC is proposing to set up a new fund for cultural and creative industries. It will be part of a new 1.6bn euros 5 year programme called Creative Europe, which will include loan and equity financing instruments to be administered by the European Investment Bank. The new programme would start in 2014. The EC published its proposal last night.
This new financial instrument is expected to help increase lending to music and other cultural companies by guaranteeing loans by national banks. This would address the existing market failure in terms of accessing finance and growth capital. IMPALA estimates that up to 400 million euros could be allocated to loan guarantees and other financial instruments.
Currently lending to the music sector often depends on personal guarantees and collaterals required by the banks. SMEs are restricted in the amounts they can borrow and the types of financial tools available to them. Equity financing is also expected to be covered by the proposed instrument.
Helen Smith, Executive Chair, commented: “This is great news for the music sector. If we can also couple this with concrete measures to improve market access (1) for SMEs, we can completely transform Europe’s cultural industries.”
The idea of a loan guarantee fund for cultural and creative industries was one of the main points in IMPALA’s Action Plan for Finance (2), a call to decision makers to invest in cultural SMEs and boost Europe’s economy. This proposal was discussed at IMPALA's finance working group at MIDEM in January 2011. European Commissioner for Culture Androulla Vassiliou held meetings with sector professionals in May to discuss how financial instruments in the cultural sector might work. She also shared her vision in a recent address to the European Parliament.
The European Commission budget proposal now has to be approved by a unanimous decision of the Member States, after Parliament has given it its consent. IMPALA urges Member States and Members of the European Parliament to support this initiative and calls for the creation of a pilot project for 2012 to test the fund ahead of the new financial framework.
(1) Growth is not possible without also dealing with existing market access problems. IMPALA calls for a review of how the regulatory framework should level the playing field to provide market access for cultural SMEs, which account for 80% of the sector’s innovation. This has also been recommended by the European Commission and the European Parliament. (European Commission Green Paper “Unlocking the potential of cultural and creative industries”, 2010; European Commission study “The Entrepreneurial Dimension of the Cultural and Creative Industries”, Utrecht School of the Arts, 2011; European Parliament Resolution “Unlocking the potential of cultural and creative industries”, May 2011.)
IMPALA was established in April 2000 to represent independent music companies. 99% of Europe’s music companies are small or medium sized entreprises (SMEs) . Known as the “independents”, they are world leaders in terms of innovation and discovering new music and artists - they produce more than 80% of all new releases. SMEs also produce 80% of Europe’s jobs. Their potential is enormous but is hampered by complex barriers to trade and severe market access problems. The impact on diversity, consumer choice and pluralism is clear. Over 95% of what most people hear and see, whether on radio, retail or the internet, is concentrated in the hands of four multinationals, known as the majors.
Cultural and creative SMEs are now officially recognised by the EU as “the drivers of growth, job creation and innovation”. IMPALA expects the EC and its member countries to put in place key investment, digital and market access measures. Fostering Europe's economy of culture and diversity is one of the EU's top priorities in becoming the world's leading knowledge economy. Culture is a bigger earner than any of chemicals, automobiles or ICT manufacturing and provides more than 3% of Europe's jobs. IMPALA has its own award schemes to help promote cultural diversity and new talent and highlight the artistic contribution of independent music. IMPALA award winning artists include Efterklang, Adele, Radiohead, Arctic Monkeys, Carla Bruni, Manu Chao, Corneille, Katie Melua, Franz Ferdinand, The Prodigy, Placebo and Ibrahim Ferrer (Buena Vista Social Club).
Please visit www.impalamusic.org <http://www.impalamusic.org> , call +32 2 503 31 38 or contact IMPALA on email@example.com