APPENDIX 2 How is a satellite account created?

The creation of the satellite account for culture and media 2018

Once it has been established which goods and services are considered to fall under culture and media, the next step is to distil from the national accounts the economic transactions that are most significant for these goods and services. What is the production value of cultural and media products? And how much do households spend on these products (consumption)? The starting point for these estimates is the ‘supply and use tables’ as compiled within the framework of the national accounts. Diagram 2.1 illustrates the form of a supply and use table. This diagram is also useful for explaining how a satellite account for culture and media is actually compiled and how the findings should be interpreted.

Supply of cultural and media products

The domestic production is established for all cultural and media products (rows 1-n), together with the branches of industry (columns 1-n) that carry out this production. Cell (1.1) contains information on the production of culture and media product 1 by branch of industry 1. When the production of the various cultural and media products is added across the branches of industry, this yields the total domestic production of cultural and media products (column n+1). In addition to domestic production, cultural and media products can also be imported (column n+2). The domestically produced and imported cultural and media products together form the total supply of cultural and media products at basic prices (column n+3). The basic price is the price the producer actually receives on delivery of the product. This price is not the same as the price the buyer of this product has to pay (purchase price). The difference is determined by the trade and transport margins that must be paid in order to get the product from the producer to the buyer. Any taxes and subsidies on products can also raise or lower the purchase price. Increasing the supply at basic prices by the balance of the taxes and subsidies on products (column n+4) and the trade and transport margins (column n+5) gives the supply at basic prices of each culture and media product (column n+6). This establishes the total supply of cultural and media products, together with the branches of industry that produced these products and the extent to which these cultural and media products were also imported.

Value added

Value added is created through domestic production of cultural and media products. This value added (row n+8) is calculated by reducing the production value (row n+6) of the branches of industry by the necessary goods and services (intermediate consumption (row n+7)). The sum of the value added in all branches of industry adds up to the culture and media sector’s value added at basic prices. Increasing this value added by the balance of taxes and subsidies on products then generates the culture and media sector’s contribution to the gross domestic product (GDP).

Appendix 2.1 Outline of a supply and use table (link)

Use of cultural and media products

Once cultural and media products have been supplied, they are then used. Cultural and media products can serve as input for the production of other products (intermediate consumptione (column n+7)), they can be directly consumed by households (column n+8) or by the government (column n+9), they can be investment goods (column n+10) or cause a change in the stock of cultural and media products (column n+11), or they can be exported (columns n+12 and n+13). Ultimately, the total use of cultural and media products at purchase prices (column n+14) is equal to the total supply at purchase prices (column n+6).
At the level of the work charts, the method outlined above has been used for 103 goods groups from the national accounts that fall either entirely or in part under cultural and media products. To make the results more robust, the number of cultural and media products in the publication was reduced to 24 goods groups, 10 domains and 15 subdomains. At a work chart level, the number of branches of industry was 142; by no means all these branches produced cultural and media products. Also for the sake of robustness, this number of branches of industry has been narrowed down to 26.

Non-cultural and media products

In addition to the cultural and media products, some other activities were also included in the satellite account for culture and media because these activities are inextricably linked to the associated cultural and media products. This means that investments in assets such as buildings in the art and culture branch of industry (SIC 90 and 91) and the government (SIC 84) – insofar as they come under culture and media – are also included (row n+2). These investments are considered to be used for the purposes of culture and media to such an extent that they are inextricably linked with culture and media; one example of this is the construction and renovation of museums. The same is true for the ancillary revenues (row n+3) of the businesses and organisations in the art and culture branch of industry. These are not in themselves cultural and media products – otherwise they would have been included in rows 1 to n – but they relate to ancillary revenues that would not exist without the associated cultural and media products, such as museum shops, cafés and restaurants, educational courses, etc. Row n+4 contains the trade and transport margins which are not themselves cultural and media products, but which form an indispensable link in the production and distribution process of cultural and media products. Cultural and media products only acquire economic relevance in the system used for the national accounts once they are actually sold.

Alignment with macro-economic totals

To align with the macroeconomic totals, consumer spending by Dutch residents in other countries has also been included on row n+5. This amount is added to the consumer spending by residents, with the resulting sum being ‘reverted’ to imports. This item is offset with these macro totals because the item is not available by commodity group.

Structure of branches of industry used in the satellite account for culture and media

Table 2.2, below, presents the branches of industry used in this publication. The intention was to identify the branches relevant to culture and media separately wherever possible. This had to be reconciled with the desire to publish fairly robust figures – not going down to the level of too-small sums. Finally, the nature of the basic material meant that it was not always possible to publish at the desired level of detail. Looking at the goods groups, it becomes clear which cultural and media products are generated by a branch of industry that may at first glance seem to be large and heterogeneous.

Appendix 2.2 Classification of branches of industry (link)