Appendix 2 How is a satellite account compiled?
The creation of the satellite account for culture and media 2022
Once it has been established which goods and services are considered to fall under culture and media, the next step is to extract from the national accounts the key economic transactions for these goods and services. What is the output 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 lay-out 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 results should be interpreted.
Supply of cultural and media products
The domestic output is established for all cultural and media products (rows 1-n), broken down by industries (columns 1-n). Cell (1.1) contains for example information on the production of culture and media product 1 by industry 1. Summing of production of the various cultural and media products across industries, this yields the total domestic output of cultural and media products (column n+1). In addition to domestic output, 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 increase or decrease the purchase price. When adding the balance of the taxes and subsidies on products (column n+4) and the trade and transport margins (column n+5) to the supply at basic prices we obtain the supply at basic prices of each culture and media product (column n+6). This establishes the total supply of cultural and media products, broken down by industries 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 output of cultural and media products. This value added (row n+8) is calculated by reducing the output (row n+6) of all industries by the necessary goods and services (intermediate consumption (row n+7)). The sum of the value added in all industries results in 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 provides us with the culture and media sector’s contribution to the gross domestic product (GDP).
Appendix 2.1 Supply and use table for the satellite account for culture and media 2022
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 consumption (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 supply 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 97 product 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 26 product groups, 10 domains and 15 subdomains. At a work chart level, the number of industries was 143; by no means all these industries produced cultural and media products. Also for the sake of robustness, this number of industries has been reduced 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 industry (NACE 90 and 91) and the government (NACE 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; think for 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 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 (museum shops, catering, 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 of national accounts once they are actually sold.
Alignment with macro-economic totals
To align with the macroeconomic totals, consumer expenditures by Dutch residents abroad has also been included as a separate row (row n+5). This amount is added to the consumer expenditure by residents, with the resulting sum being ‘reverted’ to imports. This item is offset only once with the macro totals due to lack of data at per product group.
Classification of industries used in the satellite account for culture and media
Table 2.2, below, presents the classification of industries used in this publication. Our approach is to make industries relevant to culture and media as visible as possible. This had to be reconciled with the desire to publish fairly robust, not too-small amounts. 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 produced by an industry that may at first glance seem to be large and heterogeneous.