text_TITL pruh_TITL logoC Culture and Mass Media Economy 1 Financing, Supporting and Impacts of Culture – Multiplication Effects of Subsidies to Culture (in Brno-CZ) 2. lecture Simona Škarabelová www.econ.muni.cz pruh+znak_ESF_13_gray4+bily_RGB pruh+znak_ESF_13_gray4+bily_RGB text_zahlavi Culture and Mass Media Economy 2 Finance of culture nThe range of ownership models in the cultural sector interacts wiht the finance of culture. nOrganizations and facilities that are publicly owned or subsidized receive funds/mony raised from taxes from central and local government bodies. nPublic finance can also be indirect through tax expenditures. nFinance may come from private sources even for state-owned institutions (consumer purchases of tickets are an obvious source but sponsorship, donations of money, goods and voluntary work can be significant sources of support.) www.econ.muni.cz pruh+znak_ESF_13_gray4+bily_RGB pruh+znak_ESF_13_gray4+bily_RGB text_zahlavi Culture and Mass Media Economy 3 The main resources for supporting culture Direct Indirect Subsidies/Resources Subsidies from public budgets Not from public budget Subsidies taxes Social contributions Subsidies with a contribution fees Tax reduces for donators money from sales revenues Tax reduces for donees foundations and foundations funds other founds (state fund for czech cinematography) Communal obligations Donations and sponsorship Lottery and punts Flag days = public collections www.econ.muni.cz pruh+znak_ESF_13_gray4+bily_RGB pruh+znak_ESF_13_gray4+bily_RGB text_zahlavi nDevelopment public funds provided to the (in thou. CZK) state funds; the state budget; regional budgets; municipal budgets Culture and Mass Media Economy 4 www.econ.muni.cz pruh+znak_ESF_13_gray4+bily_RGB pruh+znak_ESF_13_gray4+bily_RGB text_zahlavi Sources of financing culture by cultural areas in 2010 (in thousand CZK) AREA Central government Local government Public Sector Total Direct household spending Non-financial and financial corporations Non-governmental institutions Private Sector Total European Structural Funds Other international institutions Rest of the world total RESOURCES TOTAL Cultural Heritage 4 709 475 11 580 864 16 290 339 3 813 000 2 210 867 295 367 6 319 234 251 542 48 248 299 790 22 909 363 Performirng Arts 840 122 3 753 326 4 593 448 7 328 505 2 609 173 155 712 10 093 390 66 306 28 295 94 601 14 781 439 Fine Arts 29 576 60 556 90 132 811 724 6 323 582 35 438 7 170 744 21 046 9 938 30 984 7 291 860 Periodic and aperiodic press 25 773 30 260 56 033 11 676 493 32 777 264 11 754 44 465 511 . 46 46 44 521 590 Audio-visual and Interactive Technology 550 172 1 283 077 1 833 249 20 552 426 31 889 585 822 578 53 264 589 66 804 . 66 804 55 164 642 Architecture . . . . 28 236 727 3 494 28 240 221 . . . 28 240 221 Advertising . . . 88 507 75 439 468 . 75 527 975 . . . 75 527 975 Art Education 8 769 7 240 480 7 249 249 920 054 40 061 10 242 970 357 . 14 14 8 219 620 Administration 1 524 579 1 444 552 2 969 131 . . 6 439 494 6 439 494 . . . 9 408 625 Unknown area 318 863 5 737 754 6 056 617 . . . . . . . 6 056 617 TOTAL 8 007 329 31 130 869 39 138 198 45 190 709 179 526 727 7 774 079 232 491 515 405 698 86 541 492 239 272 121 952 Culture and Mass Media Economy 5 www.econ.muni.cz pruh+znak_ESF_13_gray4+bily_RGB pruh+znak_ESF_13_gray4+bily_RGB text_zahlavi Culture and Mass Media Economy 6 We can make the general observation: nThe balance of public and private financing varies a lot between different countries: nBy and large, the proportion of private finance of culture is greater in the USA, Japan and the UK than in other European countries, Canada and Australia. nDiffers between countries is the role of non-profit organizations and their relative importance in the cultural sector: nThat is typically lower in continental Europe than elsewhere. n There are the private for profit organizations that are financed from private capital and from sales revenues: nSuch as the cultural industries and Brodway and West End theatre www.econ.muni.cz pruh+znak_ESF_13_gray4+bily_RGB pruh+znak_ESF_13_gray4+bily_RGB text_zahlavi Giving (in U.S.) by source: Percentage of the total by five-year spans, 1971–2010 giving by source -- percentage of total 5-year spans.jpg www.econ.muni.cz pruh+znak_ESF_13_gray4+bily_RGB pruh+znak_ESF_13_gray4+bily_RGB text_zahlavi U.S. Types of recipients of contributions, 2010 Total = $290.89 billion n $ in billions -- rounded.jpg www.econ.muni.cz pruh+znak_ESF_13_gray4+bily_RGB pruh+znak_ESF_13_gray4+bily_RGB text_zahlavi Culture and Mass Media Economy 9 Next general observations: nEven in countries that spend relatively large amounts on public provision or subsidy of culture, the cultural budget is only a small proportion of government spending, often less than one per cent of the government budget. nThe distribution of public finance between different parts of the cultural sector is often uneven: nThe performing arts tend to be more heavily supported by public subsidy than heritage, literature or the visual arts. nWithin the performing arts sector, opera and ballet take a large proportion than orchestra. n www.econ.muni.cz pruh+znak_ESF_13_gray4+bily_RGB pruh+znak_ESF_13_gray4+bily_RGB text_zahlavi Culture and Mass Media Economy 10 Another universal observation of the public finance of culture: nIt is organizations rather than individual artists that receive the greatest amount of direct and indirect public support – it is argued that organizations can offer individual artists more effective opportunities for exhibiting their work. nThey are problems in the public finance of the cultural sector – data collection and analysis are still far from satisfactory even in countries where cultural policy is well developed. Data on the use of subsidy are needed for answering question about the equity as well as the the efficiency of cultural policies. text_TITL pruh_TITL logoC 11 Multiplication Effects of Subsidies to Culture in Brno (Czech Republic) www.econ.muni.cz pruh+znak_ESF_13_gray4+bily_RGB pruh+znak_ESF_13_gray4+bily_RGB text_zahlavi Culture and Mass Media Economy 12 nTheoretical background n nMethodology - Primary + secondary research n nResults - Theaters in Brno not only consume money, but they also produce financial resources in other services n nProblems nthe multiplication effect theory - non-reputable Structure www.econ.muni.cz pruh+znak_ESF_13_gray4+bily_RGB pruh+znak_ESF_13_gray4+bily_RGB text_zahlavi Culture and Mass Media Economy 13 Short theoretical backgroung n nTheory of multiplication effect - 3 hypothesis n nOnly one works n nMultiplication effect = the multiplication of a primary expense of a theater visitor. www.econ.muni.cz pruh+znak_ESF_13_gray4+bily_RGB pruh+znak_ESF_13_gray4+bily_RGB text_zahlavi Culture and Mass Media Economy 14 Results of existing surveys nForeign analyses nRhineland-Westphalia, nVienna, nSwitzerland nSurveys conducted in the Czech Republic nMarketing Laboratory Ostrava for the cities Ostrava, Olomouc, Šumperk and Plzeň nConfirmation: nTheaters not only cost money, but they also bring it. www.econ.muni.cz pruh+znak_ESF_13_gray4+bily_RGB pruh+znak_ESF_13_gray4+bily_RGB text_zahlavi Culture and Mass Media Economy 15 Research methodology in Brno theatres nThe primary research - addressing subscribers and visitors of the three theaters: nNational Theater (thereinafter NT) nBrno City Theatre (thereinafter BCT) nCenter of Experimental Theater (thereinafter CET) n nA printed questionnaire was given to 3,500 BCT subscribers and 2,700 NT subscribers. n nThe secondary research focused on addressing economic departments of the theaters www.econ.muni.cz pruh+znak_ESF_13_gray4+bily_RGB pruh+znak_ESF_13_gray4+bily_RGB text_zahlavi Culture and Mass Media Economy 16 The basic premise of the research n nthree partial hypotheses: n n“theater – visitor” relationship - ONLY THIS WAS CONFIRMED n n“theater – theater” relationship n n“theater – suppliers” relationship www.econ.muni.cz pruh+znak_ESF_13_gray4+bily_RGB pruh+znak_ESF_13_gray4+bily_RGB text_zahlavi Culture and Mass Media Economy 17 Results of the “theater – visitor” relationship analysis n n External effects: n“direct” external effects n“indirect” external effects. n nDirect external effects n connected with every visit of a theatrical performance, n their value is consumed at a single moment. www.econ.muni.cz pruh+znak_ESF_13_gray4+bily_RGB pruh+znak_ESF_13_gray4+bily_RGB text_zahlavi Results of the “theater – visitor” relationship analysis nIndirect external effects: nexpenses that are not directly connected with the visit of a theatrical performance but they are results of even other factors. ntheir value is not consumed instantaneously at a single theater visit but they transfer their value gradually. n nBoth, direct and indirect external effects: ncan be classified as necessary and voluntary. n Culture and Mass Media Economy 18 www.econ.muni.cz pruh+znak_ESF_13_gray4+bily_RGB pruh+znak_ESF_13_gray4+bily_RGB text_zahlavi Culture and Mass Media Economy 19 Subscribers’/Visitors’ expenses connected with their visit in the monitored theaters (in %) www.econ.muni.cz pruh+znak_ESF_13_gray4+bily_RGB pruh+znak_ESF_13_gray4+bily_RGB text_zahlavi Culture and Mass Media Economy 20 Conclusions: n n1 CZK in the price of an admission ticket = 1.57 CZK on other additional expenses n nOther indirect expences n15.23 CZK from taxes n7.8% of an average ticket price. n nTheaters return to public funds on average approximately 50% of the obtained subsidies. n