For every allocated euro, the VRT raises 2.5 euros

Independent study charts the VRT’s economic added value: 'For every allocated euro, the VRT raises 2.5 euros for the economy' 

 The VRT is the broadcaster for everyone living in Flanders. Its public profile makes the public broadcaster distinctive and unique in Flanders. It aims to reach a diverse audience with a wide range of programs that primarily focus on information, culture, education, entertainment, sports, identity, and social added value. This distinctive factor is also an essential element in the management agreement with the Flemish government. The VRT undeniably provides a clear added value to the Flemish community on a democratic, cultural, social, and economic level.

 The public broadcaster costs the Flemish taxpayer 41.2 euros per year. This is an investment in information, inspiration, and connection. However, as a broadcaster, the VRT also has a part to play in the Flemish economy. The use of public funds yields an added value to the economy. As it is a unique driving force behind the entire media sector, with the cooperation of its partners the VRT, for example, turns technological challenges into opportunities. The VRT also cooperates with other Flemish and international media organizations in the field of fiction production. In this way it presents authentic and high-quality Flemish fiction and is the direct driving force for economic activity in the production sector. Moreover, there are many other ways in which the VRT creates an added value to the economy with its investments.

 The VRT commissioned an investigation into its economic added value by imec-SMIT from the Vrije Universiteit Brussel and the Flanders Business School, which is affiliated with KU Leuven. Hence, the impact of the VRT on the economy could be independently studied by academic researchers. Research showed, amongst other things, that the VRT generates the largest amount of work in the audio-visual sector in our country. Camera people, journalists, radio makers... More than 1 in 4 people who work in the national media owe their jobs directly or indirectly to the VRT.

 The study showed that the annual economic added value of the VRT is around 670 million euros. Roughly speaking, this means that for every euro that the government invests in the VRT, more than 2.5 euros will flow into the economy. Moreover, the VRT spends its money predominantly in its own country. This mainly happens through orders for the Flemish audio-visual production sector.

 

670 million euro added value to the economy

With an allocation of 267 million euro in 2016, the public service broadcast of the Flemish Community in Belgium: VRT generates 670 million euro added value to the economy.

Expressed in terms of  employment it concerns 5,768 jobs (full-time equivalents). Among other things, the broadcaster is a lever for innovation in Flanders, functions as the stable motor of the Flemish production sector, is crucial to the Flemish radio advertisement market and adds to the success of the local music industry. This is shown in an independent study, conducted in 2018 by imec-SMIT, VUB in cooperation with Flanders Business School, KU Leuven

“We want to explain the added value we create as a public broadcaster which is the reason for this independent study”, says managing director Paul Lembrechts. “The VRT has a strong social impact. And now this study confirms our economic impact as well: Investing 1 euro of tax money in the VRT yields 2.5 euros for the economy. Cutting funds on the VRT means cutting funds on the economy and on society. Moreover, we are an efficient public broadcaster: for each Fleming, 41 euros of tax-payer money goes to the VRT, 35 percent less than the European average.”

Luc Van den Brande, chairperson of the VRT Board of Directors: “The public broadcaster plays a decisive role on many levels; also, on an economic level. This has now been quantified. It provides the broadcaster with an extra dimension in the knowledge that there is not only information, inspiration and connection but also an economic added value that cannot be underestimated. It is also becoming clear that the VRT’s income from commercial communication does not have a negative impact on the income of the commercial broadcasters.

The study

First and foremost, the VRT has a social mission. Over the last few years, an increasing amount of attention has been paid to the economic impact of the public broadcaster. The latest study, commissioned by the VRT and independently executed by imec-SMIT, VUB in cooperation with Flanders Business School, KU Leuven, now wants to further discuss the VRT’s economic role in Flanders. The study shows that the VRT has a clear economic impact:

Economic return: 1 euro yields 2.5 euros for the economy

The VRT was given a 267 million euro government allocation in 2016. The new study now shows that each euro the government invests in the VRT yields much more for Flanders: the VRT’s full economic impact is 670 million euros and expressed in employment this means 5,768 fulltime jobs. This means that every euro invested yields 2.5 euros for the economy. The VRT spends a large part of its resources on the providers, particularly the independent production sector, who invest these means in our economy. Moreover, as a employer, the VRT spends a large part of its resources on its employees, who, in turn, bring them into the economy.

The VRT as a lever for innovation and entrepreneurship

Innovation is and remains an important mission for the VRT. The independent study shows that the VRT fulfils its role as a lever for innovation in Flanders with its innovation projects. In 2017 the VRT implemented 13 research projects in cooperation with Flemish and international media partners, other public broadcasters and research bodies and universities. Because of this intensive cooperation, the Flemish partners are able to innovate on a larger scale and bring extra resources for innovation into Flanders.

“With the VRT, we want to be the motor for media-innovation in Flanders”, Paul Lambrechts explains. “There is no longer a separate allocation for innovation. That is why the VRT finances innovation with its own means. Besides that, we look for funds, also in Europe. We cooperate with partners, who, in turn, bring their own resources. This approach yields results, both for the VRT and for the sector. In view of its economic significance, the VRT will carry on its search for extra resources.”

Apart from separate innovation projects, there is VRT Sandbox. This is the internal VRT-department that gets involved with cooperations, with start-ups, SMEs from the media sector and other innovative organizations. Through Sandbox, the VRT offers various businesses the space and cooperation to demonstrate and test new products and services. This cooperation model is successful. The Sandbox partners saw their number of employees increase between 2015 and 2017 when they were cooperating with VRT Sandbox. During that period, they also managed to find 19.7 million euros of new capital. Because of this positive impact on the innovation sector, Sandbox will remain a significant priority for the VRT in the years to come.

Paul Lembrechts: “We will keep going with VRT Sandbox. This initiative allows Flemish start-ups to attract new employees and fresh capital. Moreover, the VRT is a pioneer for a European Sandbox-hub, which gives an international resonance to the successful Flemish model.”

The VRT is the stable motor for the Flemish production sector

Between 2014 and 2017 the VRT spent an average of 58.5 million euros on the independent production sector and 17 million euros on the facilities sector. The study shows how the VRT is the stable motor for the Flemish production sector Thus, the VRT is one of the most significant levers for the conservation of quality Flemish fiction, children’s fiction and documentaries. The public broadcaster also is co-producer of 11 films per year.

Paul Lembrechts: “The VRT is the most important co-producer of fiction in Flanders. We cooperate with a large number of production houses of Flemish origin and of great individual diversity. We share with them our mission to create fiction that connect Flanders. By increasing the production quality together, Flemish fiction finds its way to the international market. This brings extra resources to Flanders which in turn are re-invested into the production sector.”

For a few years now, the VRT has had a major fiction-policy in place. Based on improved scripts and on higher production quality, this policy contributes to the fact that the Flemish production sector is able to enter into an increased international cooperation. Because of this success, we want to continue this fiction policy and enforce its promotion.

The VRT support the radio advertising market in Flanders

Radio is hugely popular in Flanders. The study shows that this unique, strong position of radio in the Flemish media landscape is due to the combination of the VRT’s strong radio brands and those of the commercial broadcasters.

That makes radio extremely popular with advertisers. The radio advertising market has seen an annual growth of 5.5 percent since 2011. This is considerably more than the growth of the gross national product or inflation. Internationally, Flanders (combined with French-speaking Belgium) is unprecedented considering the share of radio advertising within the advertising market.

However, the VRT has experienced a ceiling regarding income from radio advertising. As part of the independent study, several scenarios were simulated where the impact of the advertising ceiling was assessed. A limit of advertising broadcast time, a decrease in prices, and a combination of these two have had a detrimental influence on all broadcasters. Moreover, these limitations do not lead to a higher income for private media players.

Paul Lembrechts: “We are sticking to the advertising revenue ceiling from the radio market. Even though this study does not necessarily demonstrate a positive effect on this market. Advertisers are buying a combination of advertising time from both public and commercial broadcasters. The ceiling may limit them regarding national or regional campaigns. This may even mean the ceiling causes a disturbance of the market.”

The VRT as an accelerator for local musical talent

Almost 18,000 local numbers and 6,900 Flemish artists found their way to the Flemish public exclusively via the VRT radio stations. Because of the VRT’s diverse musical policy, each radio station has its own profile which makes for a rich diversity in artists and musical genres.

Paul Lembrechts: “Also when it comes to music, we want to be diverse and bolster artists. The fact that we succeed in doing this is evident on our playlists. They show a large variety of artists, only played by the VRT. We also promote new talent with initiatives such as ‘De nieuwe lichting’by Studio Brussel and’ Start to DJ’ by MNM but also ‘Speel het hard’ with Thomas Van der Veken online on Canvas.be. For artists such as Tamino, the VRT was able to help him launch his successful career. Artists like Buurman and Eva De Roovere are played by the VRT and not by any other Flemish stations.”

The musical profiles of the VRT’s radio stations play a crucial role in the Flemish musical industry, according to the study. The audience discovers Flemish artists through airplay on the VRT radio stations, the VRT enforces the musical sector by organizing talent shows and musical events (for instance Zomerhit, de Mia’s and the Studio Brussel Showcases). Moreover, we connect the Flemish public by recording musical events for radio, television and online. In this way we provide optimal opportunities for development for the Flemish musical sector in a small language region.

More than that, the VRT provides an economic added value to the musical sector in another way. Annually, the VRT pays copyrights and neighbouring rights to the managing companies for artists and writers. In 2017, the VRT provided a total of 30 percent of the annual income for the large companies. This too, adds to the growth of the musical sector.

Conclusion

The results of this study are obvious. The investment of the Flemish government in the VRT is profitable. Apart form the social impact of the public broadcaster, each euro yields 2.5 euros for the Flemish economy. The Flemish media- and technology sector is able to test out projects, employ people, obtain resources, and grow with the help of the VRT as a lever. The Flemish production sector is experiencing an international breakthrough in cooperation with the VRT. The fact that Flemish radio is alive and kicking is partly due to the public broadcaster. It is the VRT’s ambition to keep supporting Flemish artists.

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