5. The creative chain

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• 5.1 Defining the creative chain
• 5.2 Stages within the creative chain
• 5.3 The creative chain in action

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5.1 Defining the creative chain

A value chain, known in this framework as the 'creative chain,' has been described as "a sequence of activities during which value is added to a new product or service as it makes its way from invention to final distribution" (Botkin and Matthews 1992, p. 26).

The creative chain consists of an initial creative idea, which is usually combined with other inputs to produce a culture good or service, through a series of interlinked stages between their production and use. A culture product must be created, produced, possibly manufactured or reproduced, and then distributed before it reaches, or is used by, a consumer. This chain of activity includes a number of distinct steps, usually occurring in business establishments. The basic steps of the creative chain are shown in Figure 1.

Figure 1 Basic creative chain for culture goods and services

Figure 2 illustrates the circular nature of the creative chain. This model of the creative chain, which could also be called a culture cycle, demonstrates the interrelationships between supply and demand more clearly than the basic model in Figure 1, and emphasizes how use can have an impact on the act of creation. In this model, the creative chain measures not just economic connections, but also the feedback processes at any point on the chain, which in turn can inspire new creation.

Figure 2 Feedback process in the creative chain

The process between the creation of an original product and its use can be simple or complex depending upon the number of stages it goes through and the influence of transversal domains (described later). Some products may not flow through all steps in the creative chain. The simplest form of creative chain is the creation of an original work, such as a painting, which the artist may sell directly to the consumer.

Simple: (original visual art):

• Creation – original painting
• Use (Final demand) – direct sale by artist to consumer

A more complex model is the movement of an original piece of music from creation to differing points of demand, either intermediate or final. Any or all of these steps (and more) could be included in the creative chain for an original piece of music.

Complex(music):

• Creation – composition of the initial product, i.e. a music score/song (including music, lyrics)
• Creation – orchestration
• Production – sheet music
• Production – performance by musician(s)
• Production – recording of music performance
• Production – design of CD packaging and information materials
• Production – manufacture of CD (or related good) and packaging
• Dissemination – wholesale or retail distribution of CD
• Dissemination – marketing and promotion to increase the value of the product
• Dissemination – licensing rights to other platforms, e.g. television programs, video games, feature films, radio program, website, concert DVD, music compilation, etc
• Dissemination – broadcast – radio, television, Internet
• Use – Internet download by consumer (free or paid)
• Use – consumer purchase or rental of music as CD, DVD, download
• Use – consumer listens to music by CD, DVD, download, streaming, etc.

5.2 Stages within the creative chain

The stages of the creative chain (creation, production, dissemination and use) ensure that the structure is consistent with standard Statistics Canada terminology used by the System of National Accounts (SNA). In particular, the stages for production and manufacturing, as described in the 2004 Framework, are merged into one category named "production". Another step, previously called distribution, is renamed "dissemination", to distinguish it from the much narrower concept of distribution used in the National Accounts. The Canadian Framework for Culture Statistics (CFCS) creative chain now reflects better the models emerging from other countries and international agencies.

Heritage provides a challenge. The 2004 framework created a separate model of the creative chain to accommodate heritage due to the difficulties of dealing with an industry that does not create culture goods. Physical heritage artifacts tend to be discovered or identified, conserved, interpreted and presented, rather than created. In this case, creation and manufacturing activities are not relevant. In addition, most of the activities involved in the production and the delivery of a heritage service are located within the same establishment, which carries an industrial classification that describes these activities. For the purposes of this framework, most heritage activities will be described in the production and dissemination steps of the creative chain.

5.2.1 Creation

The role of the creator is fundamental to the definition of culture and the creative chain. The creator drives the entire creative chain; without the role of the creator, there would be no culture.

The creation or authoring of an original is the basis for all culture goods or services. An original is any type of expression conceived independently by its creator, often described as an author or an artist. An original is the archetypal intangible good as it is possible to establish ownership rights over it and it provides economic value to its owner (Hill 1999, p. 440). An original is intangible because it begins its development without physical characteristics but, unlike a service, is a discrete entity, which exists separately from its creator or consumer. Ownership of an original may be recognized through copyright, and the original can be bought and sold in the same way, as are tangible goods.

Some key features of originals are that,

Copyright protection of the original is a significant criterion for culture products. The Berne convention for the Protection of Literary and Artistic Works, established in 1886, and last amended in 1979, defines the rights of an author of literary and artistic works; the list of works is similar to the culture products found in this framework (WIPO 1979). The World Intellectual Property Organization (WIPO) followed the Berne Convention with a Copyright Treaty (1996) extending the definition of literary and artistic works to include software and databases (WIPO 1996).

The culture content delivered by culture goods or services must be 'copyrightable', in that the original creation must be eligible for copyright protection, even if their creator/owner does not claim or employ the right, or if the work is now in the public domain.

The concept of an 'original' in the world of technology requires additional consideration. An original can be used to create a new original, in that a sound recording can be remixed to create a new sound recording, a book can be translated to create a new version of the same text, or different choreography can create a new ballet based upon an existing storyline. Conceptually these would all be treated as originals but are a step along in the creative chain.

The creation stage can be summarized as the originating of ideas and content, which can include the making of unique single products, such as a drawing, a craft, or a manuscript.

5.2.2 Production

The production stage consists of taking a creative original and producing a single copy (e.g. script, a master recording or film master) or multiple copies (music recordings such as CDs, lithographs, books, films). Production encompasses all of the steps that lead up to and include the making or manufacturing of a final finished product. This stage can also include, depending upon the product itself, a number of steps, which take the initial creative original from an idea through the stages of modelling such as models, maquettes, mock-ups, prototypes, or other intermediary forms of the final product.

Production is usually dependent upon the use of other goods and services in order to complete the final product. The goods and services used in the creative chain for culture products can include content services (e.g. editing, translation, design, etc.) and manufacturing services (e.g. printing,). Printing is included not because it is a culture service in its own right, but because it meets the second framework criteria: it supports the production of culture products. Printing is a manufacturing service that is required to turn a written text into print, just as a manufacturing service is required to produce a compact or digital disc from a master recording. Based upon the creative chain model, printing is defined as part of the production for the framework's category for published works.

In addition to production related to new culture goods and services, this stage includes activities related to the preservation and conservation of archives, libraries, cultural and natural heritage. In this sense, the term 'production' encompasses the collection and organization of products, both tangible and intangible, for the purposes of preservation. Heritage products are preserved for posterity and, possibly, exhibition and re-use. The production stage includes the conservation, preservation, and management of products, sites, and buildings that have cultural, heritage or natural meaning and value.

5.2.3 Dissemination

Dissemination represents the distribution of originals and mass-produced culture products to consumers. Establishments that disseminate culture products use a variety of methods including wholesale or retail sales, rental, marketing, and promotional activity, exhibition, the Internet, and radio and television broadcasting. The exhibition and transmission of information about heritage artifacts, collections and sites, are represented within the dissemination stage.

The availability of digital technology has revolutionized dissemination for culture products, increasing opportunities for creators to distribute products directly to consumers. Sometimes production and dissemination stages are found within a single business establishment. New methods of dissemination exist that allow consumers to obtain just-in-time products that previously required manufacturing and warehousing before they could be purchased. An example of this approach is 'print on demand' publishing, which results in the printing of books or other publications only after the receipt of a customer order. These new methods of dissemination complicate the measurement of culture as it becomes more difficult to distinguish between the various steps in the creative chain.

5.2.4 Use

The last stage in the creative chain consists of the use of culture goods and services. Traditionally, the use of culture products has included the purchase, borrowing, and reading of books, magazines, and newspapers, listening to radio, watching television, tickets for movies or live performances, admission to museums or galleries, playing a musical instrument, playing computer games, etc. The 2004 Framework used the terms 'participation' and 'consumption' in the discussion of final demand for culture products. Generally, participation and consumption denote a wide range of activities of individuals and groups in the creation and use of cultural products, including audiences and participants, as well as creators and 'stewards' (Stanley 2004, p. 5-10, 17).

Traditionally, consumption has been measured by spending behaviour (purchasing, subscribing to, or renting culture equipment and content), whereas participation has been counted as the type and number of participants or time spent (e.g. reading, watching television, visiting carnivals, listening to radio, viewing museum exhibits). However, the distinction between these types of demand masks the complexities raised by the imprecise nature of the terminology. One cannot easily put an economic value on culture use given the often no cost access to parks, public libraries, festivals, websites and heritage institutions. Alternately, participation can include involvement in culture activities that may also be measureable through a fiscal lens (e.g. paid drawing or acting classes, dancing at venues that require payment, listening to songs purchased from iTunes, etc.). In acknowledgment of the ambiguity of the traditional terms, whenever possible, the framework will employ the term 'use' to represent the concept of demand, rather than 'consumption' or 'participation'.

The term 'use' presents its own problems, however, as it does not appear to represent readily the idea of participating in a culture event. For example, it is difficult to refer to a person who attends a concert as 'using' the event, but neither does the idea of 'participating' truly represent the idea of listening to a concert. The economic concept behind 'final demand', however, is that the ticket represents the attendance in economic terms, while listening or appreciating or learning from the concert represents the event in social terms. In the end, all terminology is awkward. For this framework, the generic term 'use' to cover the concepts of participation, consumption, attendance, or activity appears to present the fewest problems.

Types of demand (Use)

In terms of economics, a culture product may be 'used' in many ways, either as a final demand product or as an intermediate input into the production of a final demand product.

Final demand,the term used by economists to represent final sales of goods and services to consumers, is what drives the economy. Within an economic system, final demand is attributed typically to four main sources:

1. Households – expenditures on consumer goods and services by individuals and the not for profit sector
2. Governments – public expenditures
3. Foreign – export demand, and
4. Businesses – capital spending

In the case of culture, most final demand sales are to households, governments and export markets. Examples of goods and services consumed directly by households include film and television productions, books, tickets to theatre performances, visual arts, music recordings, entrance to heritage museums, etc.

Intermediate demand (or input), the term used for sales between industries, is dependent on final demand. One business will produce a new product by using goods or services from another industry. Examples of these intermediate inputs in the production process include mixing the sound track for a movie, editing or translating a magazine, or designing the sets for a theatrical production. These goods and services are not consumed directly by individuals but are used to make other products. Some goods and services may feed both final demand and intermediate demand; for example, a book may be a final demand product purchased by consumers (final demand), or it may be an intermediate input used as the basis for a film or television script.

5.3 The creative chain in action

The creative chain does not judge the type of activity undertaken to produce the culture product, just as it does not judge the source of funding or the business model that governs these activities. To be in scope for culture, a culture good or service must comply with the CFCS definition of culture and satisfy at least one of its six criteria.

This means that the industrial processes used to move a product from creation to use are essential to the creation of the core culture product, whether or not the process itself is innately 'cultural'. The result is that all stages in production, such as translation, editing and printing are in scope for culture if they are part of the creative chain for a culture good or service. The following example, taken from periodical publishing, demonstrates this approach. The publication of a periodical may entail all or some of the following stages:

• Creation: production of original content, such as articles, essays, editorial, drawings, photographs, etc. for inclusion in the periodical,
• Production: content services such as editing, proofreading, translation, page-setting, cover and other design, advertising content, printing, on-line content design, etc. are undertaken to prepare the periodical for the reader;
• Dissemination: the periodical can be made available to the consumer in a variety of formats, such as through the mailing of print copies, technical support for on-line subscriptions, newsstand distribution, or the availability of an electronic version for downloading (free or paid) or on-line viewing.
• Use: a consumer can purchase a periodical or obtain it free-of-charge, depending upon the business model of the publisher. Periodicals may be read or used in printed form, on-line or by download, and via different models such as subscription, single copy retail sales, inserted in another product (e.g. with a newspaper), through a library or from another source.

5.3.1 Locating culture goods and services in the creative chain

Culture goods and services are placed in a hierarchical model that distinguishes between core and ancillary goods and services depending on the primary purpose of the final product.

Core culture goods and services are those products that meet the criteria for culture and where the entire creative chain is in scope for culture. Their primary purpose is the transmission of culture content, and they are intended to elicit an emotional or cognitive response, and are eligible for intellectual property right protection. In general, core culture goods and services share a number of characteristics:

• They are the result of some type of creative artistic activity,
• They are protected by copyright or are 'copyrightable', and
• They can be produced by any industry. For example, non-culture establishments such as religious institutions or associations are not defined as culture industries, but they may publish books. These books are still core culture products, despite the industry classification of their publisher.

The 2004 framework declared that certain types of goods, such as visual arts, were only core if they were 'originals', whereas other types of visual art, covering the wide range from signed lithographs to unsigned posters, were to be classified as 'other visual arts', and were deemed to be 'non-core'. Given that the contents of a visual art product, whether original or a copy, is the result of creative activity and contains intellectual property, all visual art is in scope as a core culture good in the 2011 framework.

Ancillary goods and services are a separate category, as their full chain of activity is not covered by the framework definition or criteria. In the 2004 framework, they were referred to as non-core goods and services. The primary purpose of ancillary products is to provide an artistic creative service, or an intermediary input, into a final product that is not culture. For example, the use or purpose of a final product such as an automobile, advertisement or building is not intended to transmit an intellectual or culture concept. However, ancillary services such as design, architecture or advertising are essential to the creation and production stages in the creative chain for products such as advertisements, furniture and built structures.

The recognition of ancillary products is important in order to measure the creative artistic activity related to the design of products whose purpose is not essentially 'cultural'. Conceptually, these products are in scope for culture, from creation up to and including the parts of production that relate to their design. Any activities that relate to the manufacturing, construction or production of the final product or its dissemination to the public are not in scope for culture.

In a sense, this distinction may appear arbitrary. Other products, defined as culture goods and services, may also not have the transmission of an intellectual or culture concept as their primary goal (e.g. training films, how-to manuals, and passport photographs). The decision to make this distinction between core and ancillary products is a pragmatic one, which takes into account the need for the framework to reflect a definition of culture that is recognizable, measurable and reasonable. If the framework were to define all products that benefit from design as core culture, the final product of most manufacturing or construction projects would have to be defined as culture. This is neither reasonable nor desirable. Instead, the framework encourages the recognition of the creative artistic activity that is part of the development of ancillary products but not the entire activity chain for the final product.

The relationship between culture products and establishments

Culture products can be produced in any industry in the economy, whether or not it is defined as a culture industry (whose primary activity is the creation, production or dissemination of culture). Similarly, culture and non-culture establishments may produce either culture or non-culture products, or both. While culture goods and services are produced predominantly by establishments whose principal product is culture (i.e. culture establishments), they may also be produced by establishments that are not part of a culture industry (i.e. non-culture establishments).

Figure 3 maps the variety of places where culture and non-culture goods and services are produced. The following list contains examples for each box in the figure's matrix:

1. A culture establishment (book publisher) publishes culture products (books)
2. A culture establishment (theatre company), whose principal product is culture (theatrical productions) could have a secondary product that is not culture (theatre restaurant meals).
3. A non-culture establishment (automobile manufacturer), whose principal product is not culture (automobiles) can also produce culture services as a secondary product (automobile design services)
4. A non-culture establishment (automobile company) manufactures non-culture goods (automobiles)

A study of culture industries may focus only on culture establishments irrespective of their product lines, while a study of culture products may look at any establishment that produces culture goods and services, whether or not the producer is a culture establishment. Depending upon requirements, some or all of the boxes in this matrix may be included in data analysis.

Figure 3 Supply of culture products by type of establishment