www.pwc.com/outlook Global entertainment and media outlook 2012–2016 Industry overview 13th annual edition June 2012 Global entertainment and media outlook 2012–2016 Industry overview 13th annual edition June 2012 Each year, PwC’s global team of entertainment and media experts generates unbiased, in-depth forecasts for 13 industry segments Incorporating data from principal regions comprising 48 countries and areas around the world, Global entertainment and media outlook: 2012–2016 combines deep knowledge of local markets with a truly global perspective—a powerful tool for understanding critical business issues To learn more about the challenges and opportunities ahead for the entertainment and media industry, please visit pwc.com/e&m Global entertainment and media outlook: 2012–2016 Prepared and edited by: PwC firms help organizations and individuals create the value they are looking for We are a network of firms in 158 countries with close to 169,000 people who are committed to delivering quality in assurance, tax and advisory services 300 Madison Avenue New York, NY 10017 +1-646-471-4000 www.pwc.com Authored by: Wilkofsky Gruen Associates Inc., a provider of global research and analysis of the media, entertainment, and telecommunications industries www.wilkofskygruen.com Outlook editorial board: For the PwC Entertainment & Media Practice: Deborah Bothun, Principal James DePonte, Partner Sean DeWinter, Partner Marcel Fenez, Global Leader, Entertainment & Media Nick George, Partner Stefanie Kane, Partner Alexandra Maclean, Global E&M Marketing Manager Radhika Nanda, Global E&M Marketing Executive Pauline Orchard, Global E&M Marketing Leader Kenneth Sharkey, Partner Phil Stokes, Partner Many other professionals from the PwC Entertainment & Media Practice reviewed and added local expertise to this publication For Wilkofsky Gruen Associates Inc.: Use of Outlook data Permission to cite This document is provided by PwC for general guidance only and does not constitute the provision of legal advice, accounting services, investment advice, or professional consulting of any kind The information provided herein should not be used as a substitute for consultation with professional tax, accounting, legal, or other competent advisers Before making any decision or taking any action, you should consult a professional adviser who has been provided with all pertinent facts relevant to your particular situation No part of this publication may be excerpted, reproduced, stored in a retrieval system, or distributed or transmitted in any form or by any means—including electronic, mechanical, photocopying, recording, or scanning—without the prior written permission of PwC The information is provided as is, with no assurance or guarantee of completeness, accuracy, or timeliness of the information and without warranty of any kind, express or implied, including but not limited to warranties of performance, merchantability, and fitness for a particular purpose Outlook content must not be excerpted, used, or presented in any portion that would render it misleading in any manner or that fails to provide sufficient context Without limiting the foregoing, excerpts from the publication may be used only for background market illustration, should not be the sole source of 2012-2016 information, and must not form the majority of sourced information © 2012 PwC All rights reserved PwC refers to the PwC network and/or one or more of its member firms, each of which is also a separate legal entity Please see www.pwc.com/structure for further details AT-12-0120 Global entertainment and media outlook is a trademark owned by PricewaterhouseCoopers LLP ISBN 978-1-931684-27-9 Global entertainment and media outlook: 2012–2016, Industry overview ISBN 978-1-931684-25-5 Global entertainment and media outlook: 2012–2016 David Wilkofsky, Partner Arthur Gruen, Partner Norman D Eisenberg, Vice President Requests should be submitted in writing to Radhika Nanda at radhika.nanda@uk.pwc.com outlining the excerpts you wish to use, along with a draft copy of the full report that the excerpts will appear in Provision of this information is necessary for every citation request to enable PwC to assess the context in which the excerpts are being presented PwC | Global entertainment and media outlook: 2012–2016 Contents: Industry overview Letter from Global Leader, Entertainment & Media PwC Entertainment & Media Practice—country contacts Scope and methodology Scope Methodology Viewpoint Preface and economic context 18 The end of the digital beginning: E&M companies reshape and retool for life in the new normal 23 Summaries by segment and region Global industry summary 48 Global market by segment 57 Global market by region 63 Index of tables and charts 91 This Industry Overview contains a top-line summary of industry data, along with PwC’s viewpoint about industry trends It does not approach the depth or granularity of the full Outlook content, which provides more than 100,000 data points and in-depth commentary for the 13 segments and 48 countries and areas covered For access to full data sets and commentary, visit the online Outlook at www.pwc.com/outlook Industry overview Letter from Global Leader, Entertainment & Media June 2012 To our clients and friends both in and beyond the entertainment and media industry: Welcome to the 13th annual edition of PwC’s Global entertainment and media outlook, covering the forecast period 2012–2016 Our forecasts and analyses for this edition focus on 13 major entertainment and media (E&M) industry segments To reflect the ever-changing nature of the industry, as well as the continuing growth of digital revenue streams, we continue seeking out new data sources and have again increased the depth of data across the 48 countries and areas covered in the Outlook Given those increases in the depth and breadth of our content, you will now find certain of the data sets in the online Outlook only I encourage you to get to know the online edition of the Outlook, which offers significant additional functionality and flexibility for the user of the underlying data and which includes additional territory-specific content During 2011, both advertising spending and, to a lesser extent, consumer/end-user spending grew as overall economic activity and demand for high-quality content increased Proliferation in the usage of smart mobile devices has enabled the convenience of consumption of content anywhere and anytime to become a reality In the near term, economic prospects are mixed but should improve and lead to growth in the sector However, we anticipate that overall growth in the E&M industry will lag nominal GDP growth due to an ongoing consumption shift to lower-priced digital distribution Although rates of growth in China and India show some signs of moderating, those markets—as well as other fast-growing markets in Asia and Latin America—are the engines of global growth The initial uncertainty of digital migration is giving way to a sharper focus on identifying and executing the business models, organizational structures, and skill sets that will deliver rising future value in the changed environment Put simply, digital is now established as the new normal The relative availability and affordability of fixed and mobile broadband in different markets set the pace of consumer adoption of digital And as a consequence, some markets will continue to see differing growth patterns Understanding how consumer behavior is changing and interpreting the mass of data that is being gathered about consumer preferences are becoming core skills and are providing the basis for monetization either directly or through collaboration and partnering with others This is just one example of the areas where sources of value are changing All of us at PwC continue to stay on top of trends and developments that may impact your business now and in the future, and we look forward to further sharing our thoughts with you We appreciate your feedback and ask that you in turn continue telling us what we can to make the Outlook more useful to you For additional clarification on any matters included in the Outlook or if we can be of service to your business in any way, either contact one of the PwC E&M professionals listed on pages and or visit our Web site (www.pwc.com/e&m) for details of the contact in your territory Finally, we thank you for your support and wish you an exciting and rewarding year ahead Sincerely, Marcel Fenez Global Leader Entertainment & Media PwC | Global entertainment and media outlook: 2012–2016 PwC Entertainment & Media Practice—country contacts Global Marcel Fenez marcel.fenez@hk.pwc.com Canada Tracey Jennings tracey.l.jennings@ca.pwc.com United States Kenneth Sharkey kenneth.j.sharkey@us.pwc.com Austria Bernd Hoffman bernd.hoffman@at.pwc.com Belgium Eddy Dams eddy.dams@be.pwc.com Denmark John Gabriel Sørensen john.gabriel.sorensen@dk.pwc.com Finland Harri Valkonen harri.valkonen@fi.pwc.com France Matthieu Aubusson de Cavarlay matthieu.aubusson@fr.pwc.com Germany Werner Ballhaus werner.ballhaus@de.pwc.com Greece Dinos Michalatos dinos.michalatos@gr.pwc.com Ireland Paul O’Connor paul.w.oconnor@ie.pwc.com Italy Andrea Samaja andrea.samaja@it.pwc.com Netherlands Ennel van Eeden ennel.van.eeden@nl.pwc.com Norway Eivind Nilsen eivind.nilsen@no.pwc.com Portugal José Vitorino jose.vitorino@pt.pwc.com Spain Virginia Arce virginia.arce@es.pwc.com Sweden Nicklas Kullberg nicklas.kullberg@se.pwc.com Switzerland Patrick Balkanyi patrick.balkanyi@ch.pwc.com United Kingdom Phil Stokes phil.stokes@uk.pwc.com Czech Republic Jiri Moser jiri.moser@cz.pwc.com Hungary Manfred Krawietz manfred.h.krawietz@hu.pwc.com Poland Adam Krason adam.krason@pl.pwc.com Romania John Webster john.webster@ro.pwc.com Russia Natalia Yakovleva natalia.yakovleva@ru.pwc.com Turkey Murat Colakoglu murat.colakoglu@tr.pwc.com Eran Iohan eran.iohan@il.pwc.com Middle East/North Africa Fouad Alaeddin fouad.alaeddin@jo.pwc.com South Africa Vicky Myburgh vicky.myburgh@za.pwc.com North America EMEA Western Europe Central and Eastern Europe Middle East/Africa Israel † †Comprises Algeria, Bahrain, Egypt, Jordan, Kuwait, Lebanon, Libya, Morocco, Oman, Qatar, Saudi Arabia, Syria, and the United Arab Emirates Industry overview Asia Pacific Australia David Wiadrowski david.wiadrowski@au.pwc.com China Marcel Fenez marcel.fenez@hk.pwc.com Hong Kong Marcel Fenez marcel.fenez@hk.pwc.com India Timmy Kandhari timmy.s.kandhari@in.pwc.com Indonesia Chrisna Wardhana chrisna.wardhana@id.pwc.com Japan Akihiko Nakamura akihiko.nakamura@jp.pwc.com Korea Hum-Seok Park hum-seok.park@kr.pwc.com Malaysia Neil Proudlove neil.proudlove@my.pwc.com New Zealand Keren Blakey keren.blakey@nz.pwc.com Pakistan Sohail Hasan sohail.hasan@pk.pwc.com Philippines Mary Jade T Roxas jade.roxas@ph.pwc.com Singapore Charlotte Hsu charlotte.hsu@sg.pwc.com Taiwan Han Wu han.wu@tw.pwc.com Thailand Kajornkiet Aroonpirodkul kajornkiet.aroonpirodkul@th.pwc.com Vietnam Ian Lydall ian.lydall@vn.pwc.com Argentina Jesús Estevéz jesus.estevez@ar.pwc.com Brazil Estela Vieira estela.vieira@br.pwc.com Chile Rafael Ruano rafael.ruano@cl.pwc.com Colombia Diego Henao diego.henao@co.pwc.com Mexico Luis Roberto Martínez del Barrio luis.roberto.martinez@mx.pwc.com Venezuela Estela Vieira estela.vieira@br.pwc.com Latin America PwC | Global entertainment and media outlook: 2012–2016 Scope and methodology Scope 8 Methodology 9 Scope The Outlook reflects the collective wisdom of our large team of professionals who work with entertainment and media companies around the world It is a unique resource for the industry, offering a five-year outlook for global consumer spending and advertising revenues, along with insights into the technology, government, political, and business trends driving those forecasts New additions to the 2012 Outlook There are a number of data breakouts included in this year’s Outlook that were not provided in the past We have added trade shows to the “Businessto-Business” chapter, and concerts and music festivals to the “Recorded Music” chapter, which we renamed “Music.” Also in “Music,” we are providing data for unit sales of both physical and digital recorded music, available in the online edition In “Consumer Magazine Publishing,” we are providing per-issue unit sales for print circulation and paid unit sales for digital circulation, also available in the online edition In “Filmed Entertainment,” we are providing revenue data for electronic home distribution through pay TV providers and also for over-the-top content accessed via the Internet Because video-on-demand and pay-perview are major components of electronic home video distribution, we are now including those revenue streams in “Filmed Entertainment.” And because “Television Subscriptions and License Fees” focuses principally on distribution, we shifted to “Filmed Entertainment” video-on-demand and pay-per-view to reflect payments for content Categories covered • Internet access spending: wired and mobile • Internet advertising: wired and mobile • Television subscriptions and license fees • Television advertising • Music • Filmed entertainment • Video games • Radio • Out-of-home advertising • Consumer magazine publishing • Newspaper publishing • Consumer and educational book publishing • Business-to-business Regions/countries covered North America EMEA Canada United States Western Europe Austria Belgium Denmark Finland France Germany Greece Ireland Italy Netherlands Norway Portugal Spain Sweden Switzerland United Kingdom Asia Pacific Central and Eastern Europe Czech Republic Hungary Poland Romania Russia Turkey Middle East/Africa Israel Middle East/North Africa (MENA)† South Africa Latin America Australia China Hong Kong India Indonesia Japan Malaysia New Zealand Pakistan Philippines Singapore South Korea Taiwan Thailand Vietnam Argentina Brazil Chile Colombia Mexico Venezuela †Comprises Algeria, Bahrain, Egypt, Jordan, Kuwait, Lebanon, Libya, Morocco, Oman, Qatar, Saudi Arabia, Syria, and the United Arab Emirates PwC | Global entertainment and media outlook: 2012–2016 Methodology How we derive the data Forecast information Historical information Recent trends in industry performance are analyzed, and the factors underlying those trends are identified Historical information is obtained principally from confidential and proprietary sources In instances when third-party sources are consulted and their information is used directly— from such sources as government agencies, trade associations, or related entities that seek to have their data disseminated in the public domain— the sources of such information are explicitly cited In instances when the information is used indirectly, as part of the calculus for the historical data, the sources are proprietary Each year, we look not only at data for the most recent year but also at the historical data to determine whether there have been any revisions and whether new sources have emerged that provide a more complete or more accurate picture of the market In some cases, that exercise leads us to revise historical spending levels and growth trends from one edition to the next The factors considered are economic, demographic, technological, institutional, behavioral, and competitive, as well as certain other drivers that may affect each of the entertainment and media markets Models are then developed to quantify the impact of each factor on industry spending Next, a forecast scenario for each causative factor is created, and the contribution of each factor on a prospective basis is identified Those proprietary mathematical models and analytic algorithms are applied in the process to provide an initial array of prospective values Our professional expertise and institutional knowledge are then brought to bear in a review and adjustment of those values if required The entire process is then examined for internal consistency and transparency vis-à-vis prevailing industry wisdom Forecasts for 2012–2016 are also based on analysis of the dynamics of each segment in each region and on factors that affect those dynamics We provide compound annual growth rates (CAGRs) that cover the 2012–2016 forecast period In the calculation of CAGRs, 2011 is the beginning year, with five growth years during the forecast period: 2012, 2013, 2014, 2015, and 2016 The end year is 2016 The formula is: How we report the data in each chapter Segment spending consists of advertising and end-user spending related directly to entertainment and media content Each chapter introduction begins with a definition of the spending streams that are included in that segment We not include spending on hardware or on services that may be needed to access content End-user spending is counted at the consumer or end-user level, not at the wholesale level, and includes retail markups when applicable Advertising spending is measured net of agency commissions in all territories except the United States and Russia, where gross advertising is measured to be consistent with the way advertising is generally reported In addition to annual-spending figures, we also present data that are measured at a single point in time, such as TV subscriptions, Internet subscriptions, mobile subscriptions, and newspaper unit circulation In those instances, we show annual averages rather than year-end totals because annual averages more accurately connect the impact of these figures to annual spending Inflation Across all chapters, figures are reported in nominal terms reflecting actual spending transactions and therefore include the effects of inflation CAGR = 100 * [(Value in 2016/Value in 2011)1/5 – 1] Key to symbols used in the tables and charts p = preliminary NA = not available — = no spending that year Totals in tables and charts may not total arithmetically due to rounding Industry overview | Methodology 9 Internet access market: wired and mobile by country (US$ millions) Asia Pacific 2007 2008 2009 2010 2011p 2012 2013 2014 2015 2016 2012–16 CAGR Australia 4,006 5,175 5,460 5,766 6,626 7,285 8,121 8,783 9,759 10,479 9.6 11,562 13,855 16,288 20,697 24,059 27,486 31,497 35,147 38,927 42,633 12.1 Hong Kong 805 845 919 1,060 1,327 1,470 1,580 1,728 1,856 1,987 8.4 India 678 843 1,099 1,576 2,477 3,771 5,445 7,242 9,097 10,827 34.3 1,142 1,582 2,017 2,509 2,668 2,993 3,862 5,098 6,771 8,903 27.3 54,471 59,626 62,576 65,037 65,232 69,000 72,850 75,331 77,734 80,045 4.2 Malaysia 588 761 933 1,100 1,203 1,364 1,615 2,032 2,528 3,039 20.4 New Zealand 410 437 439 500 593 713 787 848 916 983 10.6 Pakistan 485 607 665 728 808 987 1,205 1,486 1,824 2,236 22.6 Philippines 383 748 929 1,075 1,231 1,492 1,860 2,248 2,663 3,413 22.6 Singapore 750 842 917 1,012 1,158 1,273 1,391 1,487 1,610 1,725 8.3 11,759 12,718 13,485 14,307 15,099 15,479 15,895 16,189 16,485 16,762 2.1 1,889 1,795 2,418 2,516 2,637 2,819 3,063 3,392 3,901 4,473 11.1 Thailand 723 958 2,022 2,643 3,143 3,587 3,964 4,338 4,715 5,088 10.1 Vietnam 284 472 808 1,674 2,574 3,064 3,501 3,801 4,077 4,337 11.0 89,935 101,264 110,975 122,200 130,835 142,783 156,636 169,150 182,863 196,930 8.5 China Indonesia Japan South Korea Taiwan Total Sources: PricewaterhouseCoopers LLP, Wilkofsky Gruen Associates Advertising Advertising increased by 6.6 percent in 2011, the secondfastest increase during the past five years We expect the market to increase by 8.1 percent compounded annually during the next five years We project an 18.9 percent compound annual increase in Internet advertising and 12.8 percent for the small, video game market Cinema advertising will increase at an 8.9 percent compound annual rate; TV advertising will grow at a projected 6.9 percent compounded annually; out-of-home will rise at a 5.4 percent compound annual rate; and radio will increase by 5.3 percent on a compound annual basis Japan at $49 billion in 2011 was the leading country, with the PRC second at $36 billion and Australia third at $13 billion, together accounting for 73 percent of total advertising in Asia Pacific Excluding Japan, advertising growth in the remaining countries during the next five years will average 10.6 percent on a compound annual basis Drill down through data across segments, components, and territories Visit the online Outlook at www.pwc.com/outlook Industry overview | Global market by region 81 Advertising by segment (US$ millions) 2007 2008 2009 2010 2011p 2012 2013 2014 2015 2016 2012–16 CAGR 12,547 15,805 17,096 21,228 25,065 30,608 37,245 44,301 51,774 59,529 33.8 26.0 8.2 24.2 18.1 22.1 21.7 18.9 16.9 15.0 18.9 41,894 42,338 40,803 45,624 48,232 48,681 52,614 57,575 62,225 67,381 % Change 3.5 1.1 –3.6 11.8 5.7 0.9 8.1 9.4 8.1 8.3 6.9 Cinema 372 381 389 436 496 542 592 642 700 759 % Change 40.9 2.4 2.1 12.1 13.8 9.3 9.2 8.4 9.0 8.4 8.9 Video games 161 217 262 318 355 420 476 538 593 649 % Change 37.6 34.8 20.7 21.4 11.6 18.3 13.3 13.0 10.2 9.4 12.8 7,532 7,378 6,165 6,287 6,222 6,458 6,678 6,926 7,248 7,641 –0.2 –2.0 –16.4 2.0 –1.0 3.8 3.4 3.7 4.6 5.4 4.2 30,635 30,422 28,364 29,716 31,344 32,712 34,137 35,591 37,163 38,842 Asia Pacific Internet advertising: wired and mobile % Change Television Consumer magazines % Change Newspapers 3.7 –0.7 –6.8 4.8 5.5 4.4 4.4 4.3 4.4 4.5 4.4 5,349 5,581 5,399 5,763 5,983 6,309 6,638 6,990 7,358 7,739 1.8 4.3 –3.3 6.7 3.8 5.4 5.2 5.3 5.3 5.2 5.3 13,431 14,106 12,770 13,379 14,166 15,106 15,859 16,669 17,505 18,424 % Change 7.8 5.0 –9.5 4.8 5.9 6.6 5.0 5.1 5.0 5.2 5.4 Directories 5,173 5,249 4,935 4,608 4,417 4,382 4,392 4,443 4,543 4,690 % Change 7.6 1.5 –6.0 –6.6 –4.1 –0.8 0.2 1.2 2.3 3.2 1.2 2,028 1,917 1,538 1,510 1,488 1,530 1,578 1,642 1,726 1,833 0.7 –5.5 –19.8 –1.8 –1.5 2.8 3.1 4.1 5.1 6.2 4.3 117,560 121,149 115,064 125,628 133,905 142,160 154,645 168,598 182,832 198,011 6.0 3.1 –5.0 9.2 6.6 6.2 8.8 9.0 8.4 8.3 8.1 % Change Radio % Change Out-of-home Trade magazines % Change Total % Change Note: Television, newspaper, consumer magazine, trade magazine, and directory Web site and mobile advertising is included in the respective segments and in the Internet advertising segment but only once in the overall total Sources: PricewaterhouseCoopers LLP, Wilkofsky Gruen Associates 82 PwC | Global entertainment and media outlook: 2012–2016 Advertising by country (US$ millions) 2007 2008 2009 2010 2011p 2012 2013 2014 2015 2016 2012–16 CAGR Australia 13,582 14,085 12,964 13,915 13,317 13,589 14,016 14,316 14,612 14,971 2.4 China 19,037 22,722 24,399 30,191 36,166 39,518 46,645 54,589 62,961 71,641 14.6 Hong Kong 2,621 2,702 2,428 2,842 3,063 3,318 3,575 3,860 4,135 4,447 7.7 India 4,218 4,778 4,793 5,392 6,128 6,925 7,833 8,909 10,111 11,360 13.1 Indonesia 3,478 4,225 4,955 5,997 7,139 8,262 9,672 10,853 12,037 13,223 13.1 57,962 55,923 49,489 49,439 48,751 50,293 51,505 53,342 55,024 56,961 3.2 Malaysia 1,467 1,617 1,698 1,940 2,160 2,342 2,496 2,662 2,817 2,985 6.7 New Zealand 1,993 1,973 1,759 1,780 1,823 1,900 1,981 2,039 2,111 2,164 3.5 Asia Pacific Japan 199 241 277 303 310 314 320 327 344 358 2.9 Philippines 1,062 1,139 1,214 1,387 1,499 1,588 1,697 1,824 1,944 2,074 6.7 Singapore 1,041 1,075 1,086 1,209 1,268 1,323 1,398 1,471 1,546 1,628 5.1 South Korea 5,115 4,987 4,592 5,035 5,608 5,958 6,377 6,837 7,297 7,828 6.9 Taiwan 2,488 2,428 2,317 2,713 2,876 2,777 2,825 2,960 3,025 3,162 1.9 Thailand 3,038 2,957 2,759 3,132 3,415 3,644 3,866 4,136 4,361 4,671 6.5 Vietnam 259 297 334 353 382 409 439 473 507 538 7.1 117,560 121,149 115,064 125,628 133,905 142,160 154,645 168,598 182,832 198,011 8.1 Pakistan Total Sources: PricewaterhouseCoopers LLP, Wilkofsky Gruen Associates Consumer/end-user spending Consumer/end-user spending rose by 3.7 percent in 2011, comparable to the 3.5 percent increase in 2010 We expect a 5.2 percent advance in 2012, with growth of percent or more continuing through 2016 For the forecast period as a whole, growth will average 5.3 percent compounded annually from $197 billion in 2011 to $256 billion in 2016 We project video games to expand at a 10.3 percent compound annual rate, TV subscriptions and license fees by 8.4 percent compounded annually, filmed entertainment by 6.3 percent, and business-to-business by 5.8 percent Growth in the remaining segments will average less than percent compounded annually Japan at $79 billion and the PRC at $49 billion were the dominant territories, followed by South Korea at $18 billion, Australia at $15 billion, and India at $13 billion Industry overview | Global market by region 83 Consumer/end-user spending by segment (US$ millions) Music % Change Filmed entertainment % Change Video games % Change Consumer magazines % Change Newspapers % Change Radio % Change Consumer and educational books % Change Business-to-business % Change Total % Change 2009 2010 2011p 2012 2013 2014 2015 2016 2012–16 CAGR 25,745 28,244 31,654 34,544 38,894 42,545 46,236 50,092 54,265 58,324 11.0 9.7 12.1 9.1 12.6 9.4 8.7 8.3 8.3 7.5 8.4 11,972 11,605 11,096 11,037 11,138 11,303 11,563 11,911 12,316 1.0 –1.4 –3.1 –4.4 –0.5 0.9 1.5 2.3 3.0 3.4 2.2 18,674 19,100 19,575 20,665 21,495 23,022 24,560 26,057 27,587 29,111 4.8 2.3 2.5 5.6 4.0 7.1 6.7 6.1 5.9 5.5 6.3 15,054 18,407 20,680 22,741 23,958 26,562 29,188 32,213 35,506 39,090 28.0 22.3 12.3 10.0 5.4 10.9 9.9 10.4 10.2 10.1 10.3 12,861 12,784 12,079 11,880 11,698 11,718 11,692 11,771 12,002 12,291 –0.2 –0.6 –5.5 –1.6 –1.5 0.2 –0.2 0.7 2.0 2.4 1.0 29,718 31,000 30,664 31,219 31,749 32,522 33,381 34,362 35,420 36,518 2.5 4.3 –1.1 1.8 1.7 2.4 2.6 2.9 3.1 3.1 2.8 3,015 3,057 3,098 3,120 3,169 3,223 3,280 3,337 3,395 1.6 1.6 1.4 1.3 0.7 1.6 1.7 1.8 1.7 1.7 1.7 30,085 31,592 31,340 31,160 31,240 31,752 32,004 32,178 32,236 32,283 8.2 5.0 –0.8 –0.6 0.3 1.6 0.8 0.5 0.2 0.1 0.7 23,715 24,356 23,445 24,120 24,301 25,284 26,645 28,262 30,169 32,253 6.7 2.7 –3.7 2.9 0.8 4.0 5.4 6.1 6.7 6.9 5.8 170,955 % Change 2008 2,967 TV subscriptions and license fees 2007 12,136 Asia Pacific 180,470 184,099 190,523 197,492 207,712 218,232 229,778 242,433 255,581 7.1 5.6 2.0 3.5 3.7 5.2 5.1 5.3 5.5 5.4 5.3 Sources: PricewaterhouseCoopers LLP, Wilkofsky Gruen Associates View year-on-year growth for every data line Visit the online Outlook at www.pwc.com/outlook 84 PwC | Global entertainment and media outlook: 2012–2016 Consumer/end-user spending (excluding Internet access) by country (US$ millions) 2007 2008 2009 2010 2011p 2012 2013 2014 2015 2016 2012–16 CAGR Australia 12,366 13,643 14,379 14,583 15,078 16,129 17,025 17,826 18,707 19,579 5.4 China 33,068 37,268 40,507 44,814 48,834 53,944 59,316 65,204 71,561 78,242 9.9 Hong Kong 2,302 2,422 2,430 2,550 2,623 2,712 2,810 2,916 3,044 3,173 3.9 India 8,584 9,326 9,598 10,296 13,023 14,082 15,393 16,797 18,434 20,039 9.0 Indonesia 1,739 1,930 2,038 2,149 2,255 2,391 2,525 2,685 2,875 3,102 6.6 83,375 84,598 81,562 81,191 78,813 79,645 80,558 81,751 83,118 84,624 1.4 Malaysia 2,154 2,298 2,450 2,572 2,676 2,838 2,941 3,062 3,189 3,321 4.4 New Zealand 2,110 2,176 2,203 2,248 2,278 2,362 2,434 2,553 2,635 2,712 3.5 585 619 814 900 942 999 1,052 1,107 1,166 1,223 5.4 Philippines 1,153 1,217 1,231 1,321 1,420 1,537 1,659 1,790 1,922 2,060 7.7 Singapore 1,524 1,571 1,581 1,639 1,612 1,684 1,753 1,832 1,914 1,994 4.3 14,176 15,383 16,188 16,947 17,855 18,754 19,654 20,618 21,715 22,865 5.1 Taiwan 4,647 4,737 4,717 4,777 4,941 5,071 5,198 5,348 5,521 5,699 2.9 Thailand 2,958 3,035 4,044 4,152 4,715 5,084 5,365 5,661 5,919 6,142 5.4 Vietnam 214 247 357 384 427 480 549 628 713 806 13.5 170,955 180,470 184,099 190,523 197,492 207,712 218,232 229,778 242,433 255,581 5.3 Asia Pacific Japan Pakistan South Korea Total Sources: PricewaterhouseCoopers LLP, Wilkofsky Gruen Associates Latin America Latin America was the fast-growing region in 2011, with a 9.5 percent increase We expect Latin America to continue to be the fastest-growing region, with a projected 9.7 percent compound annual increase to $134 billion in 2016 from $84 billion in 2011 We expect double-digit compound annual growth in Internet access spending and Internet advertising TV advertising will grow at a 9.8 percent compound annual rate followed by TV subscriptions and license fees at 9.2 percent compounded annually Radio will grow at an 8.4 percent compound annual rate, and gains in excess of percent compounded annually are projected for out-ofhome advertising and video games Filmed entertainment will grow at a 6.4 percent compound annual rate; newspapers will grow at 5.5 percent compounded annually; and consumer magazines will increase at 5.3 percent compounded annually The remaining segments will average less than percent compounded annually Brazil and Mexico are the dominant countries, at $39 billion and $19 billion, respectively, in 2011, followed by Colombia at $13 billion Industry overview | Global market by region 85 Entertainment and media market by segment (US$ millions) Latin America 2007 2008 2009 2010 2011p 2012 2013 2014 2015 2016 2012–16 CAGR Internet access: wired and mobile 7,207 9,049 10,976 13,519 16,196 19,403 23,327 26,864 30,586 34,128 % Change 32.7 25.6 21.3 23.2 19.8 19.8 20.2 15.2 13.9 11.6 16.1 Internet advertising: wired and mobile 561 798 992 1,302 1,577 1,846 2,167 2,526 2,900 3,292 % Change 57.6 42.2 24.3 31.3 21.1 17.1 17.4 16.6 14.8 13.5 15.9 11,938 13,965 15,574 17,857 19,993 21,735 23,883 26,112 28,581 31,101 12.2 17.0 11.5 14.7 12.0 8.7 9.9 9.3 9.5 8.8 9.2 11,466 12,848 13,358 16,174 17,102 18,148 19,443 24,793 22,484 27,295 11.9 12.1 4.0 21.1 5.7 6.1 7.1 27.5 –9.3 21.4 9.8 1,336 1,260 1,263 1,240 1,259 1,298 1,347 1,412 1,462 1,543 TV subscriptions and license fees % Change TV advertising % Change Music –7.5 –5.7 0.2 –1.8 1.5 3.1 3.8 4.8 3.5 5.5 4.2 2,582 2,675 2,926 3,331 3,597 3,855 4,131 4,392 4,646 4,899 % Change 4.0 3.6 9.4 13.8 8.0 7.2 7.2 6.3 5.8 5.4 6.4 Video games 966 1,198 1,230 1,282 1,345 1,432 1,527 1,641 1,768 1,908 % Change 29.8 24.0 2.7 4.2 4.9 6.5 6.6 7.5 7.7 7.9 7.2 3,370 3,497 3,401 3,726 3,919 4,132 4,319 4,554 4,794 5,068 7.3 3.8 –2.7 9.6 5.2 5.4 4.5 5.4 5.3 5.7 5.3 7,138 7,498 7,239 7,653 7,995 8,403 8,865 9,369 9,905 10,470 9.7 5.0 –3.5 5.7 4.5 5.1 5.5 5.7 5.7 5.7 5.5 1,213 1,276 1,300 1,475 1,573 1,697 1,828 1,989 2,168 2,349 % Change 15.3 5.2 1.9 13.5 6.6 7.9 7.7 8.8 9.0 8.3 8.4 Out-of-home 864 942 911 1,008 1,090 1,178 1,264 1,356 1,458 1,570 % Change 4.7 9.0 –3.3 10.6 8.1 8.1 7.3 7.3 7.5 7.7 7.6 3,183 3,378 3,338 3,495 3,598 3,714 3,841 3,992 4,147 4,322 3.1 6.1 –1.2 4.7 2.9 3.2 3.4 3.9 3.9 4.2 3.7 5,126 5,331 5,143 5,346 5,577 5,837 6,131 6,464 6,814 7,200 11.2 4.0 –3.5 3.9 4.3 4.7 5.0 5.4 5.4 5.7 5.2 56,874 63,559 67,456 77,122 84,455 92,198 101,474 114,683 120,780 133,948 12.5 11.8 6.1 14.3 9.5 9.2 10.1 13.0 5.3 10.9 9.7 % Change Filmed entertainment Consumer magazine publishing % Change Newspaper publishing % Change Radio Consumer and educational book publishing % Change Business-to-business % Change Total % Change Note: Television, newspaper, consumer magazine, trade magazine, and directory Web site and mobile advertising is included in the respective segments and in the Internet advertising segment but only once in the overall total Sources: PricewaterhouseCoopers LLP, Wilkofsky Gruen Associates 86 PwC | Global entertainment and media outlook: 2012–2016 Entertainment and media market by country (US$ millions) Latin America 2007 2008 2009 2010 2011p 2012 2013 2014 2015 2016 2012–16 CAGR Argentina 5,545 6,265 6,831 7,857 8,649 9,361 10,360 11,548 12,459 13,669 9.6 Brazil 25,055 28,032 30,125 35,379 39,168 43,307 48,255 55,519 57,781 64,823 10.6 Chile 2,783 2,947 3,034 3,357 3,660 3,953 4,289 4,724 5,024 5,458 8.3 Colombia 9,020 10,464 11,213 12,305 13,043 13,910 15,020 16,410 17,674 19,343 8.2 13,672 14,941 15,277 17,180 18,777 20,385 22,119 24,858 26,082 28,693 8.9 799 910 976 1,044 1,158 1,282 1,431 1,624 1,760 1,962 11.1 56,874 63,559 67,456 77,122 84,455 92,198 101,474 114,683 120,780 133,948 9.7 Mexico Venezuela Total Sources: PricewaterhouseCoopers LLP, Wilkofsky Gruen Associates Brazil is the leader, at $8 billion in 2011, with Mexico and Argentina at $3 billion each and Colombia at $2 billion Internet access Internet access spending will rise from $16 billion in 2011 to $34 billion in 2016, a 16.1 percent compound annual increase Internet access market: wired and mobile (US$ millions) Latin America 2007 2008 2009 2010 2011p 2012 2013 2014 2015 2016 2012–16 CAGR Internet access: wired and mobile 7,207 9,049 10,976 13,519 16,196 19,403 23,327 26,864 30,586 34,128 32.7 25.6 21.3 23.2 19.8 19.8 20.2 15.2 13.9 11.6 16.1 % Change Sources: PricewaterhouseCoopers LLP, Wilkofsky Gruen Associates Internet access market: wired and mobile by country (US$ millions) Latin America 2007 2008 2009 2010 2011p 2012 2013 2014 2015 2016 2012–16 CAGR Argentina 1,182 1,436 1,680 2,241 2,573 2,835 3,234 3,616 3,963 4,271 10.7 Brazil 3,503 4,229 5,060 6,205 7,608 9,346 11,576 13,255 14,810 16,228 16.4 Chile 325 361 405 457 515 593 698 823 945 1,064 15.6 Colombia 767 1,114 1,451 1,818 2,214 2,641 3,197 3,776 4,680 5,566 20.2 1,350 1,795 2,242 2,645 3,104 3,772 4,361 5,084 5,830 6,593 16.3 80 114 138 153 182 216 261 310 358 406 17.4 7,207 9,049 10,976 13,519 16,196 19,403 23,327 26,864 30,586 34,128 16.1 Mexico Venezuela Total Sources: PricewaterhouseCoopers LLP, Wilkofsky Gruen Associates Industry overview | Global market by region 87 to a 15.8 percent increase Internet advertising will expand at a projected 15.9 percent compound annual rate, and a tiny video game advertising market will increase by 12.3 percent on a compound annual basis Television, the largest advertising segment, will expand at a projected 9.8 percent compound annual rate Advertising Advertising rose 6.6 percent in 2011, down from the 17.5 percent increase in 2010 that was enhanced by advertising associated with the FIFA World Cup Growth for the five-year forecast period will average 9.0 percent compounded annually to $43 billion in 2016 from $28 billion in 2011 Advertising associated with the 2014 FIFA World Cup in Brazil will lead to a 19.8 percent increase that year followed by a 3.2 percent decline in 2015 as funds leave the market Then, in 2016, the Olympics in Brazil will contribute Brazil was the leader in 2011, at $15 billion, with Mexico next at $6 billion, together constituting 75 percent of the market in Latin America Advertising by segment (US$ millions) Latin America Internet advertising: wired and mobile 2007 2008 2009 2010 2011p 2012 2013 2014 2015 2016 2012–16 CAGR 561 798 992 1,302 1,577 1,846 2,167 2,526 2,900 3,292 57.6 42.2 24.3 31.3 21.1 17.1 17.4 16.6 14.8 13.5 15.9 11,466 12,848 13,358 16,174 17,102 18,148 19,443 24,793 22,484 27,295 11.9 12.1 4.0 21.1 5.7 6.1 7.1 27.5 –9.3 21.4 9.8 69 87 90 97 103 110 119 128 136 146 21.1 26.1 3.4 7.8 6.2 6.8 8.2 7.6 6.3 7.4 7.2 15 23 27 30 38 43 51 57 63 68 25.0 53.3 17.4 11.1 26.7 13.2 18.6 11.8 10.5 7.9 12.3 1,359 1,502 1,395 1,596 1,690 1,788 1,867 2,013 2,139 2,297 8.2 10.5 –7.1 14.4 5.9 5.8 4.4 7.8 6.3 7.4 6.3 3,290 3,495 3,285 3,629 3,883 4,196 4,548 4,926 5,316 5,715 11.8 6.2 –6.0 10.5 7.0 8.1 8.4 8.3 7.9 7.5 8.0 1,213 1,276 1,300 1,475 1,573 1,697 1,828 1,989 2,168 2,349 % Change 15.3 5.2 1.9 13.5 6.6 7.9 7.7 8.8 9.0 8.3 8.4 Out-of-home 864 942 911 1,008 1,090 1,178 1,264 1,356 1,458 1,570 % Change Television % Change Cinema % Change Video games % Change Consumer magazines % Change Newspapers % Change Radio % Change 4.7 9.0 –3.3 10.6 8.1 8.1 7.3 7.3 7.5 7.7 7.6 Directories 990 1,020 968 994 1,033 1,052 1,058 1,059 1,061 1,085 % Change 16.5 3.0 –5.1 2.7 3.9 1.8 0.6 0.1 0.2 2.3 1.0 Trade magazines 305 331 295 334 359 384 417 458 500 546 % Change 8.5 8.5 –10.9 13.2 7.5 7.0 8.6 9.8 9.2 9.2 8.7 20,056 22,166 22,426 26,353 28,082 29,962 32,163 38,524 37,292 43,166 12.2 10.5 1.2 17.5 6.6 6.7 7.3 19.8 –3.2 15.8 9.0 Total % Change Note: Television, newspaper, consumer magazine, trade magazine, and directory Web site and mobile advertising is included in the respective segments and in the Internet advertising segment but only once in the overall total Sources: PricewaterhouseCoopers LLP, Wilkofsky Gruen Associates 88 PwC | Global entertainment and media outlook: 2012–2016 Advertising by country (US$ millions) Latin America 2007 2008 2009 2010 2011p 2012 2013 2014 2015 2016 2012–16 CAGR Argentina 1,455 1,747 2,032 2,188 2,409 2,686 3,071 3,636 3,946 4,584 13.7 Brazil 9,949 11,263 11,722 13,834 14,637 15,535 16,516 20,290 18,981 22,503 9.0 Chile 1,149 1,113 1,063 1,159 1,257 1,336 1,417 1,570 1,585 1,733 6.6 Colombia 2,355 2,415 2,172 2,719 2,915 3,129 3,384 3,886 3,935 4,394 8.6 Mexico 4,892 5,322 5,099 6,077 6,439 6,801 7,241 8,510 8,174 9,177 7.3 256 306 338 376 425 475 534 632 671 775 12.8 20,056 22,166 22,426 26,353 28,082 29,962 32,163 38,524 37,292 43,166 9.0 Venezuela Total Sources: PricewaterhouseCoopers LLP, Wilkofsky Gruen Associates Consumer/end-user spending Consumer/end-user spending rose by 7.9 percent in 2011, down from a 9.4 percent increase in 2010 We expect spending to grow by 7.1 percent compounded annually to $57 billion in 2016 from $40 billion in 2011 TV subscriptions and license fees at 9.2 percent compounded annually will be the fastestgrowing segment, followed by video games at 7.1 percent, filmed entertainment at 6.3 percent, and business-to-business at 5.9 percent The remaining segments will grow by less than percent compounded annually Brazil at $17 billion, Mexico at $9 billion, and Colombia at $8 billion were the leading countries in 2011, accounting for 85 percent of the total Download a PDF version of each segment Visit the online Outlook at www.pwc.com/outlook Industry overview | Global market by region 89 Consumer/end-user spending by segment (US$ millions) 2007 2008 2009 2010 2011p 2012 2013 2014 2015 2016 2012–16 CAGR 11,938 13,965 15,574 17,857 19,993 21,735 23,883 26,112 28,581 31,101 12.2 17.0 11.5 14.7 12.0 8.7 9.9 9.3 9.5 8.8 9.2 1,336 1,260 1,263 1,240 1,259 1,298 1,347 1,412 1,462 1,543 –7.5 –5.7 0.2 –1.8 1.5 3.1 3.8 4.8 3.5 5.5 4.2 2,513 2,588 2,836 3,234 3,494 3,745 4,012 4,264 4,510 4,753 % Change 3.6 3.0 9.6 14.0 8.0 7.2 7.1 6.3 5.8 5.4 6.3 Video games 951 1,175 1,203 1,252 1,307 1,389 1,476 1,584 1,705 1,840 % Change 29.9 23.6 2.4 4.1 4.4 6.3 6.3 7.3 7.6 7.9 7.1 2,011 1,995 2,006 2,130 2,229 2,344 2,452 2,541 2,655 2,771 6.6 –0.8 0.6 6.2 4.6 5.2 4.6 3.6 4.5 4.4 4.4 3,848 4,003 3,954 4,024 4,112 4,207 4,317 4,443 4,589 4,755 8.1 4.0 –1.2 1.8 2.2 2.3 2.6 2.9 3.3 3.6 2.9 3,183 3,378 3,338 3,495 3,598 3,714 3,841 3,992 4,147 4,322 3.1 6.1 –1.2 4.7 2.9 3.2 3.4 3.9 3.9 4.2 3.7 3,831 3,980 3,880 4,018 4,185 4,401 4,656 4,947 5,253 5,569 10.1 3.9 –2.5 3.6 4.2 5.2 5.8 6.3 6.2 6.0 5.9 29,611 32,344 34,054 37,250 40,177 42,833 45,984 49,295 52,902 56,654 8.6 9.2 5.3 9.4 7.9 6.6 7.4 7.2 7.3 7.1 7.1 Latin America TV subscriptions and license fees % Change Music % Change Filmed entertainment Consumer magazines % Change Newspapers % Change Consumer and educational books % Change Business-to-business % Change Total % Change Sources: PricewaterhouseCoopers LLP, Wilkofsky Gruen Associates Consumer/end-user spending (excluding Internet access) by country (US$ millions) Latin America 2007 2008 2009 2010 2011p 2012 2013 2014 2015 2016 2012–16 CAGR Argentina 2,908 3,082 3,119 3,428 3,667 3,840 4,055 4,296 4,550 4,814 5.6 Brazil 11,603 12,540 13,343 15,340 16,923 18,426 20,163 21,974 23,990 26,092 9.0 Chile 1,309 1,473 1,566 1,741 1,888 2,024 2,174 2,331 2,494 2,661 7.1 Colombia 5,898 6,935 7,590 7,768 7,914 8,140 8,439 8,748 9,059 9,383 3.5 Mexico 7,430 7,824 7,936 8,458 9,234 9,812 10,517 11,264 12,078 12,923 7.0 463 490 500 515 551 591 636 682 731 781 7.2 29,611 32,344 34,054 37,250 40,177 42,833 45,984 49,295 52,902 56,654 7.1 Venezuela Total Sources: PricewaterhouseCoopers LLP, Wilkofsky Gruen Associates 90 PwC | Global entertainment and media outlook: 2012–2016 Index of tables and charts Scope and methodology 92 Viewpoint 92 Summaries by segment and region Industry overview | Index of tables and charts 92 91 Index of tables and charts† Scope and methodology Summaries by segment and region Scope Global industry summary Regions/countries covered Digital share of global E&M spending (%) 48 Methodology Global mobile Internet subscribers 48 Global entertainment and media market by region 49 Exchange rates per US$ (2011 average) 10 Entertainment and media market by country 49 Nominal GDP growth by country in North America (%) 11 Global Internet access market: wired and mobile 50 Nominal GDP growth by country in EMEA (%) 12 Global Internet access spending by region: wired and mobile 50 Nominal GDP growth by country in Asia Pacific (%) 13 Leading Internet access markets 51 Nominal GDP growth by country in Latin America (%) 13 Global advertising by segment 52 Global nominal GDP growth (%) 14 Leading advertising markets 53 Consumer price inflation by country in North America (%) 14 Global advertising by region 53 Consumer price inflation by country in EMEA (%) 15 Advertising and marketing in the United States 54 Consumer price inflation by country in Asia Pacific (%) 16 Global consumer/end-user spending by segment 55 Consumer price inflation by country in Latin America (%) 16 Global consumer/end-user spending by region 56 Global consumer price inflation (%) 16 Leading consumer/end-user markets 56 Viewpoint Preface and economic context Projected and actual global 2011 E&M growth by category (%) 19 Projected and actual global 2011 E&M growth by segment (%) 19 Global E&M spending and nominal GDP growth (%) 20 The end of the digital beginning: E&M companies reshape and retool for life in the new normal 2007–11 growth in online/mobile video games 26 Global market by segment Global entertainment and media market by segment 57 Asia Pacific Internet access spending 58 Global recorded music spending 59 Global home video spending 60 Video game spending 60 Digital consumer magazine spending 61 Global electronic book sales 62 Digital business-to-business spending 62 Global market by region Internet subscriber growth (2012–16 CAGR) 32 Entertainment and media market by segment 64 Most-engaged markets for social networking (average monthly hours per user) 32 Entertainment and media market by country 65 92 PwC | Global entertainment and media outlook: 2012–2016 Internet access market: wired and mobile 65 Internet access market: wired and mobile by country 65 Internet access market: wired and mobile 80 Advertising by segment 66 Internet access market: wired and mobile by country 81 Advertising by country 67 Advertising by segment 82 Consumer/end-user spending by segment 68 Advertising by country 83 Consumer/end-user spending (excluding Internet access) by country 68 Consumer/end-user spending by segment 84 Entertainment and media market by segment 70 Consumer/end-user spending (excluding Internet access) by country 85 Entertainment and media market by country 71 Entertainment and media market by segment 86 Internet access market: wired and mobile 72 Entertainment and media market by country 87 Internet access market: wired and mobile by country 73 Internet access market: wired and mobile 87 Advertising by segment 74 Internet access market: wired and mobile by country 87 Advertising by country 75 Advertising by segment 88 Consumer/end-user spending by segment 76 Advertising by country 89 Consumer/end-user spending (excluding Internet access) by country 77 Consumer/end-user spending by segment 90 Entertainment and media market by segment 79 Consumer/end-user spending (excluding Internet access) by country 90 Entertainment and media market by country 80 †Key to symbols used in the tables and charts p = preliminary NA = not available — = no spending that year Totals in tables and charts may not total arithmetically due to rounding Industry overview | Index of tables and charts 93 This Industry Overview contains a top-line summary of industry data, along with PwC's viewpoint about industry trends It does not approach the depth or granularity of the full Outlook content, which provides more than 100,000 data points and in-depth commentary for the 13 segments and 48 countries and areas covered For access to the full forecasts and economic analyses for 13 industry segments, visit the online Outlook at www.pwc.com/outlook www.pwc.com/outlook Our commitment to the environment The paper and printer used in the production of the Global entertainment and media outlook: 2012–2016 are all certified to Forest Stewardship Council (FSC) standards, which promote environmentally appropriate, socially beneficial, and economically viable management of the world’s forests The text of the publication was printed on paper containing 30% post-consumer waste material, using soy based inks, resulting in nearly zero volatile organic compound (VOC) emissions The materials used in the production of this book were created using 100% renewable energy ... further details AT-1 2-0 120 Global entertainment and media outlook is a trademark owned by PricewaterhouseCoopers LLP ISBN 97 8-1 -9 3168 4-2 7-9 Global entertainment and media outlook: 2012? ? ?2016, Industry... video-on-demand, pay-per-view, and over-the-top ‡Excludes concerts and music festivals ††Excludes video-on-demand and pay-per-view ‡‡Excludes trade shows Industry overview | Preface and economic... support and wish you an exciting and rewarding year ahead Sincerely, Marcel Fenez Global Leader Entertainment & Media PwC | Global entertainment and media outlook: 2012? ? ?2016 PwC Entertainment & Media