Global Media and Entertainment 2012 - 2016 Industry Overview by PwC
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Industry Overview_PwC Outlook 2012

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Global Media and Entertainment 2012 - 2016 Industry Overview by PwC Global Media and Entertainment 2012 - 2016 Industry Overview by PwC Document Transcript

  • www.pwc.com/outlook Global entertainment and media outlook 2012–2016 Industry overview13th annual editionJune 2012
  • Global entertainment and media outlook 2012–2016 Industry overview13th annual edition Each year, PwC’s global team of entertainment and media experts generates unbiased, in-depth forecasts for 13 industry segments.June 2012 Incorporating data from 4 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: 2012–2016Prepared and edited by:PwC firms help organizations and individuals Use of Outlook data Permission to citecreate the value they are looking for. We are a This document is provided by PwC for general No part of this publication may be excerpted,network of firms in 158 countries with close to guidance only and does not constitute the reproduced, stored in a retrieval system, or169,000 people who are committed to delivering provision of legal advice, accounting services, distributed or transmitted in any form or byquality in assurance, tax and advisory services. investment advice, or professional consulting any means—including electronic, mechanical, of any kind. The information provided photocopying, recording, or scanning—without300 Madison Avenue herein should not be used as a substitute for the prior written permission of PwC.New York, NY 10017 consultation with professional tax, accounting,+1-646-471-4000 Requests should be submitted in writing to legal, or other competent advisers. Beforewww.pwc.com Radhika Nanda at radhika.nanda@uk.pwc.com making any decision or taking any action, you outlining the excerpts you wish to use, along should consult a professional adviser who has with a draft copy of the full report that theAuthored by: been provided with all pertinent facts relevant excerpts will appear in. Provision of this to your particular situation.Wilkofsky Gruen Associates Inc., a provider of global information is necessary for every citationresearch and analysis of the media, entertainment, The information is provided as is, with no request to enable PwC to assess the context inand telecommunications industries. assurance or guarantee of completeness, which the excerpts are being presented.www.wilkofskygruen.com accuracy, or timeliness of the information Without limiting the foregoing, and without warranty of any kind, express excerpts from the publication may or implied, including but not limited toOutlook editorial board: warranties of performance, merchantability, be used only for background market illustration, should not be the soleFor the PwC Entertainment & and fitness for a particular purpose. source of 2012-2016 information,Media Practice: Outlook content must not be excerpted, used, and must not form the majority of or presented in any portion that would render sourced information.Deborah Bothun, Principal it misleading in any manner or that fails toJames DePonte, Partner provide sufficient context.Sean DeWinter, PartnerMarcel Fenez, Global Leader, Entertainment & MediaNick George, PartnerStefanie Kane, Partner © 2012 PwC. All rights reserved. PwC refers to the PwC network and/or one or more of its memberAlexandra Maclean, Global E&M Marketing Manager firms, each of which is also a separate legal entity. Please see www.pwc.com/structure for furtherRadhika Nanda, Global E&M Marketing Executive details. AT-12-0120Pauline Orchard, Global E&M Marketing LeaderKenneth Sharkey, Partner Global entertainment and media outlook is a trademark owned by PricewaterhouseCoopers LLP.Phil Stokes, Partner ISBN 978-1-931684-27-9Many other professionals from the PwC Global entertainment and media outlook: 2012–2016, Industry overviewEntertainment & Media Practice reviewedand added local expertise to this publication. ISBN 978-1-931684-25-5 Global entertainment and media outlook: 2012–2016For Wilkofsky Gruen Associates Inc.:David Wilkofsky, PartnerArthur Gruen, PartnerNorman D. Eisenberg, Vice President2 PwC | Global entertainment and media outlook: 2012–2016
  • Contents: Industry overviewLetter from Global Leader, Entertainment & Media . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4PwC Entertainment & Media Practice—country contacts . . . . . . . . . . . . . . . . . . . . . . . . . . 5Scope and methodologyScope . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8Methodology . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9ViewpointPreface and economic context . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18The end of the digital beginning:E&M companies reshape andretool for life in the new normal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23Summaries by segment and regionGlobal industry summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48Global market by segment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57Global market by region . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63Index 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 3
  • 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 do 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 5 and 6 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 4 PwC | Global entertainment and media outlook: 2012–2016
  • PwC Entertainment & Media Practice—country contactsGlobal Marcel Fenez marcel.fenez@hk.pwc.comNorth AmericaCanada Tracey Jennings tracey.l.jennings@ca.pwc.comUnited States Kenneth Sharkey kenneth.j.sharkey@us.pwc.comEMEAWestern EuropeAustria Bernd Hoffman bernd.hoffman@at.pwc.comBelgium Eddy Dams eddy.dams@be.pwc.comDenmark John Gabriel Sørensen john.gabriel.sorensen@dk.pwc.comFinland Harri Valkonen harri.valkonen@fi.pwc.comFrance Matthieu Aubusson de Cavarlay matthieu.aubusson@fr.pwc.comGermany Werner Ballhaus werner.ballhaus@de.pwc.comGreece Dinos Michalatos dinos.michalatos@gr.pwc.comIreland Paul O’Connor paul.w.oconnor@ie.pwc.comItaly Andrea Samaja andrea.samaja@it.pwc.comNetherlands Ennel van Eeden ennel.van.eeden@nl.pwc.comNorway Eivind Nilsen eivind.nilsen@no.pwc.comPortugal José Vitorino jose.vitorino@pt.pwc.comSpain Virginia Arce virginia.arce@es.pwc.comSweden Nicklas Kullberg nicklas.kullberg@se.pwc.comSwitzerland Patrick Balkanyi patrick.balkanyi@ch.pwc.comUnited Kingdom Phil Stokes phil.stokes@uk.pwc.comCentral and Eastern EuropeCzech Republic Jiri Moser jiri.moser@cz.pwc.comHungary Manfred Krawietz manfred.h.krawietz@hu.pwc.comPoland Adam Krason adam.krason@pl.pwc.comRomania John Webster john.webster@ro.pwc.comRussia Natalia Yakovleva natalia.yakovleva@ru.pwc.comTurkey Murat Colakoglu murat.colakoglu@tr.pwc.comMiddle East/AfricaIsrael Eran Iohan eran.iohan@il.pwc.comMiddle East/North Africa † Fouad Alaeddin fouad.alaeddin@jo.pwc.comSouth Africa Vicky Myburgh vicky.myburgh@za.pwc.com†Comprises Algeria, Bahrain, Egypt, Jordan, Kuwait, Lebanon, Libya, Morocco, Oman, Qatar, Saudi Arabia, Syria, and the United Arab Emirates. Industry overview 5
  • Asia PacificAustralia David Wiadrowski david.wiadrowski@au.pwc.comChina Marcel Fenez marcel.fenez@hk.pwc.comHong Kong Marcel Fenez marcel.fenez@hk.pwc.comIndia Timmy Kandhari timmy.s.kandhari@in.pwc.comIndonesia Chrisna Wardhana chrisna.wardhana@id.pwc.comJapan Akihiko Nakamura akihiko.nakamura@jp.pwc.comKorea Hum-Seok Park hum-seok.park@kr.pwc.comMalaysia Neil Proudlove neil.proudlove@my.pwc.comNew Zealand Keren Blakey keren.blakey@nz.pwc.comPakistan Sohail Hasan sohail.hasan@pk.pwc.comPhilippines Mary Jade T. Roxas jade.roxas@ph.pwc.comSingapore Charlotte Hsu charlotte.hsu@sg.pwc.comTaiwan Han Wu han.wu@tw.pwc.comThailand Kajornkiet Aroonpirodkul kajornkiet.aroonpirodkul@th.pwc.comVietnam Ian Lydall ian.lydall@vn.pwc.comLatin AmericaArgentina Jesús Estevéz jesus.estevez@ar.pwc.comBrazil Estela Vieira estela.vieira@br.pwc.comChile Rafael Ruano rafael.ruano@cl.pwc.comColombia Diego Henao diego.henao@co.pwc.comMexico Luis Roberto Martínez del Barrio luis.roberto.martinez@mx.pwc.comVenezuela Estela Vieira estela.vieira@br.pwc.com6 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 home distribution through pay TV Categories coveredOutlook providers and also for over-the-top content accessed via the Internet. • Internet access spending:There are a number of data breakouts wired and mobile Because video-on-demand and pay-per-included in this year’s Outlook that view are major components of electronic • Internet advertising:were not provided in the past. We have home video distribution, we are now wired and mobileadded trade shows to the “Business- including those revenue streams into-Business” chapter, and concerts and • Television subscriptions “Filmed Entertainment.” And becausemusic festivals to the “Recorded Music” and license fees “Television Subscriptions and Licensechapter, which we renamed “Music.” Fees” focuses principally on distribution, • Television advertisingAlso in “Music,” we are providing data we shifted to “Filmed Entertainment”for unit sales of both physical and • Music video-on-demand and pay-per-view todigital recorded music, available in the reflect payments for content. • Filmed entertainmentonline edition. In “Consumer MagazinePublishing,” we are providing per-issue • Video gamesunit sales for print circulation andpaid unit sales for digital circulation, • Radioalso available in the online edition. • Out-of-home advertisingIn “Filmed Entertainment,” we areproviding revenue data for electronic • Consumer magazine publishing • Newspaper publishing • Consumer and educational book  publishing • Business-to-businessRegions/countries coveredNorth America EMEA Asia Pacific Latin AmericaCanada Western Europe Central and Eastern Europe Australia ArgentinaUnited States Austria Czech Republic China Brazil Belgium Hungary Hong Kong Chile Denmark Poland India Colombia Finland Romania Indonesia Mexico France Russia Japan Venezuela Germany Turkey Malaysia Greece New Zealand Ireland Middle East/Africa Pakistan Italy Israel Philippines Netherlands Middle East/North Africa (MENA)† Singapore Norway South Africa South Korea Portugal Taiwan Spain Thailand Sweden Vietnam Switzerland United Kingdom†Comprises Algeria, Bahrain, Egypt, Jordan, Kuwait, Lebanon, Libya, Morocco, Oman, Qatar, Saudi Arabia, Syria, and the United Arab Emirates.8 PwC | Global entertainment and media outlook: 2012–2016
  • MethodologyHow we derive the data Forecast information How we report the data Recent trends in industry performance in each chapterHistorical information are analyzed, and the factors underlying Segment spending consists of those trends are identified. advertising and end-user spendingHistorical information is obtained The factors considered are economic, related directly to entertainmentprincipally from confidential and demographic, technological, and media content. Each chapterproprietary sources. In instances when institutional, behavioral, and introduction begins with a definition ofthird-party sources are consulted and competitive, as well as certain other the spending streams that are includedtheir information is used directly— drivers that may affect each of the in that segment. We do not includefrom such sources as government entertainment and media markets. spending on hardware or on servicesagencies, trade associations, or related that may be needed to access content.entities that seek to have their data Models are then developed to quantifydisseminated in the public domain— the impact of each factor on industry End-user spending is counted at thethe sources of such information are spending. Next, a forecast scenario for consumer or end-user level, not at theexplicitly cited. In instances when the each causative factor is created, and wholesale level, and includes retailinformation is used indirectly, as part of the contribution of each factor on a markups when applicable.the calculus for the historical data, the prospective basis is identified. Advertising spending is measured netsources are proprietary. Those proprietary mathematical models of agency commissions in all territoriesEach year, we look not only at data for and analytic algorithms are applied in except the United States and Russia,the most recent year but also at the the process to provide an initial array where gross advertising is measured tohistorical data to determine whether of prospective values. Our professional be consistent with the way advertisingthere have been any revisions and expertise and institutional knowledge is generally reported.whether new sources have emerged are then brought to bear in a review and In addition to annual-spending figures,that provide a more complete or more adjustment of those values if required. we also present data that are measuredaccurate picture of the market. In some The entire process is then examined for at a single point in time, such as TVcases, that exercise leads us to revise internal consistency and transparency subscriptions, Internet subscriptions,historical spending levels and growth vis-à-vis prevailing industry wisdom. mobile subscriptions, and newspapertrends from one edition to the next. Forecasts for 2012–2016 are also unit circulation. In those instances, based on analysis of the dynamics of we show annual averages rather than each segment in each region and on year-end totals because annual averages factors that affect those dynamics. We more accurately connect the impact of provide compound annual growth rates these figures to annual spending. (CAGRs) that cover the 2012–2016 forecast period. In the calculation of Inflation CAGRs, 2011 is the beginning year, with five growth years during the forecast Across all chapters, figures are reported period: 2012, 2013, 2014, 2015, in nominal terms reflecting actual and 2016. The end year is 2016. The spending transactions and therefore formula is: 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
  • Exchange rates are not distorted by fluctuations in international exchange rates.All figures are presented in US dollarsby using the average 2011 exchange The exchange rates used for therate held constant for each historical individual countries in each region areyear and forecast year. This means outlined in the following tables.the figures reflect industry trends andExchange rates per US$ (2011 average) Exchange rates per US$ (2011 average)North America Currency Exchange rate EMEA Currency Exchange rateUnited States Dollar 1.0000 Western EuropeCanada Dollar 0.9888 Austria Euro 0.7188 Belgium Euro 0.7188Exchange rates per US$ (2011 average) Denmark Krone 5.3552 Finland Euro 0.7188Asia Pacific Currency Exchange rate France Euro 0.7188Australia Dollar 0.9687 Germany Euro 0.7188China Yuan (renminbi) 6.4544 Greece Euro 0.7188Hong Kong Dollar 7.7839 Ireland Euro 0.7188India Rupee 46.8466 Italy Euro 0.7188Indonesia Rupiah 8,779.0000 Netherlands Euro 0.7188Japan Yen 79.7000 Norway Kroner 5.6008Malaysia Ringgit 3.0528 Portugal Euro 0.7188New Zealand Dollar 1.2629 Spain Euro 0.7188Pakistan Rupee 85.6576 Sweden Krona 6.4873Philippines Peso 43.1844 Switzerland Franc 0.8866Singapore Dollar 1.2567 United Kingdom Pound sterling 0.6235South Korea Won 1,105.7300 Central and Eastern EuropeTaiwan Dollar 29.2632 Czech Republic Koruna 17.6870Thailand Baht 30.4944 Hungary Forint 200.6790Vietnam Dong 20,453.6000 Poland Zloty 2.9585 Romania New lei 3.0446Exchange rates per US$ (2011 average) Russia Ruble 29.3303 Turkey New lira 1.6774Latin America Currency Exchange rate Middle East/AfricaArgentina Peso 4.1213 Israel New shekel 3.5603Brazil Real 1.6698 Middle East/NorthChile Peso 481.5800 Africa (MENA)† US dollar 1.0000Colombia Peso 1,827.4900 South Africa Rand 7.2313Mexico Peso 12.4183 †Comprises Algeria, Bahrain, Egypt, Jordan, Kuwait, Lebanon, Libya, Morocco, Oman, Qatar, Saudi Arabia, Syria, and the United Arab Emirates.Venezuela Bolivar fuerte 4.2897 Figures are estimated in US dollars. 10 PwC | Global entertainment and media outlook: 2012–2016
  • Because all figures are shown as actual and media spending. The followingspending, with the effects of inflation tables show historical and projectedincluded, nominal GDP growth has an growth rates for nominal GDP for theimportant influence on entertainment individual countries in each region.Nominal GDP growth by country in North America (%) 2012–16North America 2007 2008 2009 2010 2011p 2012 2013 2014 2015 2016 CAGRUnited States 4.9 2.2 –1.7 3.8 4.5 4.0 4.4 5.1 5.2 5.1 4.8Canada 6.4 4.6 –4.7 4.9 5.0 4.1 4.3 4.7 4.5 4.4 4.4Total 5.1 2.4 –2.0 3.9 4.6 4.0 4.4 5.1 5.1 5.0 4.7 View data in your local currency. Visit the online Outlook at www.pwc.com/outlook Industry overview | Methodology 11
  • Nominal GDP growth by country in EMEA (%) 2012–16EMEA 2007 2008 2009 2010 2011p 2012 2013 2014 2015 2016 CAGRWestern EuropeAustria 5.8 4.1 –3.1 3.5 6.0 3.0 2.9 3.4 3.5 3.8 3.3Belgium 5.3 2.9 –1.6 3.9 5.4 1.7 2.7 3.0 3.2 3.5 2.8Denmark 3.9 2.7 –4.9 4.4 4.0 2.8 4.0 4.2 4.5 4.3 3.9Finland 8.5 2.8 –7.3 4.4 6.2 3.6 4.4 4.6 4.8 5.0 4.5France 4.9 2.7 –2.0 2.0 3.9 1.4 2.6 3.0 2.9 3.5 2.7Germany 4.6 2.0 –3.4 4.7 4.9 3.7 4.0 3.9 3.5 2.7 3.6Greece 7.5 4.3 –0.8 –2.0 –2.7 –3.6 –0.4 0.6 1.6 2.7 0.2Ireland 6.8 –5.0 –11.3 –3.6 2.0 1.3 2.2 2.6 3.2 3.5 2.6Italy 4.0 1.4 –3.0 2.3 3.3 –0.6 0.9 2.1 2.8 3.1 1.6Netherlands 5.3 4.8 –4.3 3.1 4.1 2.9 3.4 3.7 3.0 2.5 3.1Norway 5.2 10.8 –5.4 5.2 3.4 4.0 4.3 4.6 4.8 5.1 4.5Portugal 5.3 1.9 –2.3 2.7 1.1 –2.1 0.4 1.2 1.7 2.6 0.7Spain 7.1 3.2 –3.1 1.8 3.7 2.1 2.2 2.3 3.1 3.8 2.7Sweden 6.2 2.5 –3.6 6.9 7.2 2.9 3.5 4.4 4.2 4.3 3.8Switzerland 6.2 4.4 –1.6 2.0 2.5 0.7 2.9 3.1 2.9 3.4 2.6United Kingdom 5.8 2.9 –3.5 4.4 5.8 3.5 4.2 4.2 4.5 4.4 4.2Western Europe total 5.3 2.7 –3.3 3.2 4.3 2.1 3.0 3.3 3.4 3.5 3.1Central and Eastern EuropeCzech Republic 9.7 4.3 –1.7 1.2 4.1 3.7 4.5 4.8 5.7 5.2 4.8Hungary 6.7 5.7 –2.6 4.1 5.6 5.1 4.6 5.1 5.8 6.3 5.4Poland 11.0 8.4 5.3 5.1 8.0 5.2 5.8 5.9 6.2 6.1 5.8Romania 39.1 19.7 –20.1 –1.0 7.8 5.0 5.6 7.0 7.1 7.0 6.3Russia 22.0 27.0 –5.7 11.1 12.7 9.9 10.1 10.7 10.4 9.8 10.2Turkey 11.2 12.7 0.2 18.3 12.9 10.2 8.7 9.0 8.7 9.1 9.1Central and EasternEurope total 16.9 17.7 –3.4 10.1 11.0 8.5 8.4 8.9 8.9 8.7 8.7Middle East/AfricaIsrael 6.0 5.2 5.9 5.8 8.4 5.3 5.8 5.8 6.0 5.9 5.7Middle East/NorthAfrica (MENA)† 14.7 22.0 –11.1 10.4 11.5 9.2 9.5 9.7 10.0 9.8 9.6South Africa 14.1 13.2 6.1 8.8 8.7 11.6 9.2 9.0 9.2 9.3 9.7Middle East/Africa total 13.4 18.2 –6.1 9.5 10.5 9.2 9.0 9.1 9.4 9.3 9.2EMEA total 7.2 5.8 –3.5 4.7 5.8 3.7 4.4 4.8 5.0 5.0 4.6†Comprises Algeria, Bahrain, Egypt, Jordan, Kuwait, Lebanon, Libya, Morocco, Oman, Qatar, Saudi Arabia, Syria, and the United Arab Emirates.12 PwC | Global entertainment and media outlook: 2012–2016
  • Nominal GDP growth by country in Asia Pacific (%) 2012–16Asia Pacific 2007 2008 2009 2010 2011p 2012 2013 2014 2015 2016 CAGRAustralia 9.2 9.1 0.6 5.5 4.7 6.2 6.2 6.1 5.7 6.0 6.0China 19.6 18.1 8.6 16.7 14.9 12.3 12.5 12.8 12.6 12.7 12.6Hong Kong 9.6 3.8 –3.3 7.8 11.8 8.9 8.4 7.6 8.0 8.3 8.2India 16.1 12.0 17.3 20.3 16.4 14.2 13.8 14.0 13.8 12.7 13.7Indonesia 18.3 25.3 13.2 14.6 12.5 13.2 12.5 12.7 13.0 13.2 12.9Japan 1.6 –2.0 –6.1 3.2 –0.9 2.0 1.5 1.7 2.1 2.1 1.9Malaysia 11.8 15.4 –8.3 12.7 8.6 7.7 7.7 7.5 7.5 7.7 7.6New Zealand 7.9 1.7 1.2 4.0 6.5 6.6 5.7 5.2 5.3 5.6 5.7Pakistan 13.8 18.1 24.4 15.1 16.9 18.3 17.0 16.2 16.5 16.7 16.9Philippines 10.2 11.4 3.6 10.9 9.4 9.2 9.1 9.3 9.5 9.7 9.4Singapore 15.6 2.7 –3.1 17.7 9.2 7.3 6.7 6.5 6.7 6.8 6.8South Korea 7.3 5.3 3.6 9.3 8.0 6.7 6.6 7.1 7.2 6.8 6.9Taiwan 1.8 10.5 –2.8 11.9 7.1 6.9 7.0 7.1 7.3 7.6 7.2Thailand 8.7 6.4 –0.4 11.7 7.6 9.1 9.2 8.6 8.7 8.8 8.9Vietnam 17.4 29.8 11.7 16.6 25.7 19.2 13.2 13.1 12.9 13.2 14.3Total 9.1 7.6 2.3 10.8 8.5 8.6 8.6 9.0 9.2 9.4 9.0Nominal GDP growth by country in Latin America (%)  2012–16Latin America 2007 2008 2009 2010 2011p 2012 2013 2014 2015 2016 CAGRArgentina 24.1 27.8 10.3 25.9 17.8 15.2 14.7 15.0 12.9 12.6 14.1Brazil 12.3 13.9 5.1 15.4 9.8 9.3 9.4 9.1 8.8 8.7 9.1Chile 10.3 3.9 2.3 13.8 9.8 7.9 7.7 7.7 7.9 8.0 7.8Colombia 27.5 17.3 –4.5 24.0 8.4 7.5 7.7 7.7 7.8 7.9 7.7Mexico 9.2 7.8 –2.3 10.5 7.3 6.6 6.5 6.9 6.7 6.6 6.7Venezuela 23.5 37.3 4.8 26.3 29.3 28.7 26.5 26.0 24.9 25.1 26.2Total 13.6 14.5 2.7 16.4 11.6 11.1 11.2 11.5 11.3 11.6 11.3 Industry overview | Methodology 13
  • Global nominal GDP growth (%)  2012–16 2007 2008 2009 2010 2011p 2012 2013 2014 2015 2016 CAGRGlobal 7.5 5.8 –1.0 7.1 6.7 5.9 6.3 6.8 7.0 7.1 6.6The following tables show historical andprojected growth rates for consumerprice inflation for the individualcountries in each region.Consumer price inflation by country in North America (%) 2012–16North America 2007 2008 2009 2010 2011p 2012 2013 2014 2015 2016 CAGRUnited States 2.9 3.8 –0.4 1.6 2.9 2.0 1.9 2.2 2.3 2.3 2.1Canada 2.2 2.4 0.3 1.8 2.8 2.1 2.0 2.1 2.0 2.0 2.0Total 2.8 3.7 –0.3 1.6 2.9 2.0 1.9 2.2 2.3 2.2 2.1 View year-on-year growth for every data line. Visit the online Outlook at www.pwc.com/outlook14 PwC | Global entertainment and media outlook: 2012–2016
  • Consumer price inflation by country in EMEA (%) 2012–16EMEA 2007 2008 2009 2010 2011p 2012 2013 2014 2015 2016 CAGRWestern EuropeAustria 2.2 3.1 0.5 1.7 3.1 2.8 2.4 2.3 2.1 2.2 2.4Belgium 1.8 4.5 –0.1 2.2 3.2 2.0 2.0 2.0 2.1 2.1 2.0Denmark 1.7 3.4 1.4 2.3 2.5 1.7 2.3 2.2 2.0 1.9 2.0Finland 2.5 4.1 0.0 1.3 3.4 3.0 2.5 2.3 2.1 2.1 2.4France 1.5 2.8 0.1 1.7 2.2 1.8 1.6 1.9 1.3 1.9 1.7Germany 2.3 2.6 0.4 1.2 2.3 2.8 2.5 2.3 1.7 1.3 2.1Greece 2.9 4.1 1.2 4.7 2.8 1.3 1.2 1.1 1.3 1.4 1.3Ireland 4.9 4.0 –4.5 –1.6 1.1 2.3 2.5 2.1 2.0 2.1 2.2Italy 1.7 3.4 0.7 1.6 2.7 0.8 1.5 1.7 1.9 2.0 1.6Netherlands 1.6 2.4 1.2 0.9 2.3 2.6 2.2 2.1 1.4 0.7 1.8Norway 0.8 3.7 2.2 2.3 1.6 2.0 2.1 2.3 2.5 2.5 2.3Portugal 2.8 2.6 –0.8 1.4 3.3 1.3 1.4 1.5 1.6 1.7 1.5Spain 2.8 4.0 –0.4 2.0 3.1 2.8 2.0 1.4 1.6 1.8 1.9Sweden 2.2 3.4 –0.3 1.9 2.9 1.8 1.8 2.0 1.9 2.0 1.9Switzerland 2.6 3.3 –3.9 0.7 0.5 0.1 1.3 1.3 1.4 1.7 1.1United Kingdom 4.3 4.0 –0.5 3.3 4.8 2.5 2.1 2.0 2.1 2.1 2.2Western Europe total 2.4 3.3 0.0 1.8 2.8 2.0 2.0 2.0 1.7 1.8 1.9Central and Eastern EuropeCzech Republic 3.0 6.4 1.1 1.4 2.0 3.0 2.5 2.4 2.3 2.2 2.5Hungary 7.9 6.1 4.2 4.9 4.0 4.8 3.4 3.2 3.3 3.0 3.5Poland 2.3 4.4 3.9 2.7 4.1 2.7 2.6 2.5 2.6 2.6 2.6Romania 4.9 7.8 5.6 6.1 6.3 3.5 3.2 3.1 3.1 3.5 3.3Russia 9.0 14.1 11.7 6.9 8.3 6.5 6.4 6.6 6.2 5.7 6.3Turkey 8.7 10.4 6.3 8.6 5.9 8.3 5.5 5.2 4.6 4.9 5.7Central and EasternEurope total 6.4 9.7 7.9 6.0 6.5 6.0 5.3 5.4 5.0 4.9 5.3Middle East/Africa  Israel 0.4 4.7 3.3 2.7 3.4 1.5 1.9 2.0 2.2 2.5 2.0Middle East/NorthAfrica (MENA)† 5.7 10.0 3.6 4.6 5.6 5.7 5.5 5.5 5.7 5.9 5.7South Africa 7.2 11.5 7.1 4.3 5.0 5.5 5.4 5.3 5.4 5.7 5.5Middle East/Africa total 5.0 9.5 4.2 4.3 5.2 5.2 5.1 5.2 5.4 5.6 5.3EMEA total 2.7 4.2 1.4 2.6 3.6 3.1 3.0 3.1 2.9 3.2 3.1†Comprises Algeria, Bahrain, Egypt, Jordan, Kuwait, Lebanon, Libya, Morocco, Oman, Qatar, Saudi Arabia, Syria, and the United Arab Emirates. Industry overview | Methodology 15
  • Consumer price inflation by country in Asia Pacific (%)  2012–16Asia Pacific 2007 2008 2009 2010 2011p 2012 2013 2014 2015 2016 CAGRAustralia 2.3 4.4 1.8 2.8 3.2 2.8 3.0 2.8 2.6 2.7 2.8China 4.8 5.9 –0.7 3.3 5.6 3.9 3.9 3.7 3.6 3.8 3.8Hong Kong 1.9 4.3 0.6 2.4 5.5 4.5 3.5 3.0 2.6 2.7 3.3India 6.3 8.4 10.9 9.6 9.0 6.5 6.0 5.8 5.5 5.2 5.8Indonesia 9.1 11.0 2.8 6.9 5.7 6.5 5.4 5.3 5.2 5.0 5.5Japan 0.1 1.4 –1.4 –0.7 –0.4 –0.1 0.2 0.5 0.6 0.8 0.4Malaysia 2.0 5.5 0.6 1.7 3.2 2.5 2.4 2.4 2.3 2.2 2.4New Zealand 2.6 3.8 1.9 1.8 4.4 2.7 2.4 2.4 2.3 2.3 2.4Pakistan 7.6 20.3 13.6 13.9 13.9 14.0 12.0 10.5 10.0 10.0 11.3Philippines 2.8 9.3 3.3 4.5 4.5 4.1 4.0 4.0 4.0 4.0 4.0Singapore 2.1 6.6 0.5 2.8 3.7 2.9 2.4 2.1 2.0 2.0 2.3South Korea 2.6 4.6 2.8 3.0 4.2 3.2 3.0 2.9 2.9 3.0 3.0Taiwan 2.3 3.5 –0.9 1.0 1.8 1.8 2.0 2.0 2.1 2.1 2.0Thailand 2.2 5.4 –0.9 3.3 4.0 4.1 4.2 3.5 3.5 3.4 3.7Vietnam 8.3 23.1 7.1 8.9 18.8 12.1 6.0 5.5 5.4 5.7 6.9Total 1.9 3.9 0.2 2.6 4.0 3.4 3.5 3.7 3.6 3.9 3.6Consumer price inflation by country in Latin America (%) 2012–16Latin America 2007 2008 2009 2010 2011p 2012 2013 2014 2015 2016 CAGRArgentina 8.8 8.6 6.3 10.4 10.8 11.8 12.7 11.0 9.0 8.5 10.6Brazil 3.6 5.6 4.9 5.0 6.4 5.6 5.2 4.7 4.5 4.4 4.9Chile 4.3 8.8 1.7 1.2 3.1 3.1 3.0 3.0 3.0 3.1 3.0Colombia 5.6 6.9 4.2 2.3 3.3 2.9 3.1 3.0 3.0 3.0 3.0Mexico 4.0 5.2 5.3 4.2 3.3 3.4 3.2 3.4 3.3 3.1 3.3Venezuela 18.8 31.4 28.6 29.1 25.8 24.3 23.9 23.5 22.9 21.1 23.1Total 4.3 6.4 6.2 6.5 7.8 8.6 9.6 10.9 12.1 13.3 10.9Global consumer price inflation (%) 2012–16 2007 2008 2009 2010 2011p 2012 2013 2014 2015 2016 CAGRGlobal 2.5 4.0 0.8 2.6 3.8 3.5 3.5 4.0 4.2 4.7 4.016 PwC | Global entertainment and media outlook: 2012–2016
  • 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
  • Preface and economic context We are pleased to present the 13th edition of PwC’s Global entertainment and media outlook. The purpose of this Industry Overview is to provide a brief overview of the data presented in the 2012–2016 Outlook and to present a thought piece on our insights related to the trends that drive the industry and the growth forecasts.2011:The recovery progressesThe global economy began to recover in2010 from its steep decline in 2009 andcontinued to advance in 2011, althoughthe hoped-for pickup in momentum didnot materialize consistently around theglobe. Global entertainment and media(E&M) spending rose 4.9 percent in2011—a bit faster than the 4.5 percentincrease in 2010 but still below gainsin prior expansion years. Advertisingincreased 3.6 percent, down fromthe 7.0 percent gain in 2010 that wasaugmented by advertising associatedwith the FIFA World Cup and WinterOlympics and by the rebound from asluggish 2009. Consumer/end-userspending rose 2.0 percent, up from the1.3 percent rise in 2010. Internet accessrecorded the largest improvement, risingby 15.1 percent from the 10.0 percentgain in 2010.18 PwC | Global entertainment and media outlook: 2012–2016
  • Projected and actual global 2011 E&M growth by category (%) Category Projected Actual Advertising 3.1 3.6 Consumer/end user 3.4 2.0 Internet access: wired and mobile 8.8 15.1 Total 4.3 4.9 Sources: PricewaterhouseCoopers LLP, Wilkofsky Gruen Associates Projected and actual global 2011 E&M growth by segment (%) Segment Projected Actual Internet access: wired and mobile 8.8 15.1 Internet advertising: wired and mobile 13.6 18.7 TV subscriptions and license fees† 7.0 7.2 TV advertising 3.3 3.1 Recorded music‡ –5.7 –2.4 Filmed entertainment †† 5.1 0.1 Video games 6.8 2.2 Consumer magazine publishing 0.6 –0.8 Newspaper publishing –0.1 –0.7 Radio 3.1 1.5 Out-of-home advertising 2.0 5.0 Consumer and educational book publishing 0.7 –1.3 Business-to-business‡‡ 0.9 0.6 Total 4.3 4.9 †Excludes 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 context 19
  • In the 2011–15 Outlook, we pre- On a segment basis, in addition to floor may exist in terms of spendingdicted a 3.1 percent increase in global Internet access, Internet advertising, on physical music. In filmed entertain-advertising, which was a bit lower recorded music, and out-of-home ment, box office spending in a numberthan the 3.6 percent actual increase. advertising substantially outperformed of countries was disappointing, reflect-Consumer/end-user spending rose our expectations in 2011, while filmed ing less-appealing movies. In home2.0 percent, a somewhat smaller gain entertainment, video games, and video, Blu-ray gains were smaller thanthan our 3.4 percent projection. We consumer and educational books grew expected, while DVDs were pretty muchexpected Internet access spending to less than we expected. TV subscrip- as anticipated, with the result thatincrease by 8.8 percent in 2011, but tions and license fees, TV advertising, overall physical spending declined. Inactual growth was nearly twice as fast, and business-to-business materially video games, growth in online gamingwith a 15.1 percent increase. A jump matched our forecasts, while consumer cut into the console market, leading toin infrastructure spending combined magazine and newspaper publishing slower growth in overall spending thanwith a surge in smart-device pene- and radio were within two percentage we expected. In consumer and educa-tration fueled large gains in mobile points of our projections. tional books, lower-priced electronicaccess and propelled the overall access books surged in 2011, cutting into print In recorded music, declines in physicalmarket. Overall global E&M growth of sales. Overall spending declined even spending moderated in a number of4.9 percent was marginally ahead of as reading picked up. countries, most notably in the Unitedthe 4.3 percent increase we projected States, leading to a smaller decline thanlast year. we expected and hinting that a naturalGlobal E&M spending and nominal GDP growth (%) 10 5 0 –5–10–15 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Global nominal GDP Global advertising Global consumer/end user Global E&M spendingSources: PricewaterhouseCoopers LLP, Wilkofsky Gruen Associates20 PwC | Global entertainment and media outlook: 2012–2016
  • Looking forward Over the longer run, we expect the E&M spending is affected by the economic climate to improve, which economy, and countries experiencingThe economic prospects in the short healthy economic growth will see will lead to faster growth in E&Mterm are mixed. Europe’s economy large gains in E&M spending. By spending during the next five yearsremains weak, North America appears contrast, weak economies will dampen compared with the 2008–11 period.to be improving, Latin America is growth in other countries. We expect Nevertheless, we expect E&M growthrelatively healthy, and the People’s gains averaging less than 3 percent to continue to lag nominal GDP growth,Republic of China (PRC) and India annually in Japan, Germany, Ireland, principally because of the ongoing shiftcontinue to record strong, if moder- Denmark, Spain, and Greece and from higher-priced physical distributionating, growth. We expect the varied gains averaging less than 3.5 percent to lower-priced digital distribution. Aseconomic prospects to be reflected in compounded annually in the UK, Italy, the experience of the book publishingE&M spending growth in 2012. We France, Austria, the Netherlands, industry in 2011 reveals, the shift inproject Europe, Middle East, Africa and Switzerland. Full data on E&M usage from traditional media to digital(EMEA) to be the slowest-growing spending by country and major media limits growth because end-userregion, with a 3.5 percent increase, category can be found in the sections prices for digital content are generallywhich will be less than the 5.2 percent on regional spending. lower than prices for physical content.advance in 2011. Latin America will During the next five years, we projectbe the fastest-growing region, with a that E&M spending will grow at a9.2 percent gain, nearly matching the 5.7 percent compound annual rate—9.5 percent gain in 2011. Asia Pacific below the projected 6.6 percent com-will increase by 6.6 percent. Excluding pound annual increase in nominal GDP.the relatively sluggish Japanese market,the remainder of Asia Pacific is expected The average growth rate masks wideto grow by 9.0 percent. North America disparities in growth, resulting fromwill grow by a projected 5.7 percent in economic disparities around the world.2012, helped by an inflow of election- A number of countries in Asia andrelated advertising in the United States Latin America along with Middle East/as well as advertising associated with North Africa (MENA), South Africa,the Summer Olympics. and Russia will average double-digit increases during the next five years. Create customized bar charts and line graphs instantly. Visit the online Outlook at www.pwc.com/outlook Industry overview | Preface and economic context 21
  • The end of the digital beginning:E&M companies reshape andretool for life in the new normal Despite ongoing economic uncertainty, the past year has seen global sales of tablets and smartphones reach record levels once again—thus underlining the growing revenue opportunities in the digital delivery of entertainment and media (E&M) content and advertising to increasingly connected and, particularly, mobile customers.However, behind the headlines, an Digital migration has two main impli- The Outlook also confirms that theeven more important milestone for the cations for E&M companies: One is parallel global shifts we’ve highlightedE&M industry is upcoming: the onset of the need to make clear and commit- in recent years will continue to playthe digital new normal. Digital is now ted choices about the role or roles out and strengthen through 2016, withembedded in business as usual. And companies should play in the digital value shifting as follows.as digital moves to the heart of many value chain. The other is that behaviors • From print to digital: For example,media companies and begins to present are changing rapidly and irreversibly electronic books’ share of total globalthe greatest opportunities for growth, within organizations and organizations’ spending on consumer and educa-what previously looked like a wide gap customer bases—and leaders need to tional books will rise from 5 percentbetween old media models and new understand and harness those behav- in 2011 to 18 percent in 2016.ones is being bridged. ioral changes to grow future revenues. • From fixed to mobile-driven con-Companies are planning out and execut- sumption: Mobile Internet accessing their strategies to cross to the new Three global shifts increased from 26 percent of totalnormal, and with that, we’re hearing Changing consumer behavior is driving Internet access spending in 2007clearer and more-consistent language both of the implications. Consumers’ to 40 percent in 2011—and willfrom industry CEOs as they articulate ongoing migration to digital modes of account for 45 percent in 2016.the new landscape. That clearer lan-guage signals that the initial uncertainty consumption got accelerated by the eco- • From West to East, North to South:triggered by digital migration is giving nomic downturn. And it is now continu- During the next five years, totalway to a sharper focus on identifying, ing to gain pace during the recovery, E&M revenue growth in the Eastchoosing, and executing the business fueled by three forces now commonly (Central and Eastern Europe/Asiamodels, organizational structures, and summarized as “social, mobile, and Pacific) will average 7.2 percentskill sets that will harness new consumer local,” to which others add, variously, compounded annually, comparedbehaviors to deliver rising future value “global” and “commercial.” Together with a 4.3 percent CAGR for thein the changed environment. those forces will help companies tap West (North America/Western into an expanding pool of value: this Europe). And growth in the South edition of Global entertainment and (Latin America/Middle East/Africa) media outlook projects that total global will average 10.0 percent com- E&M revenues will rise from $1.6 trillion pounded annually—more than twice in 2011 to $2.1 trillion by 2016. the 4.5 percent CAGR in the North (North America/Europe). Industry overview | The end of the digital beginning 23
  • Looking beyond the …to map out the industry’s • For the industry: Development ofimpact of digital… future topography the right organizational and opera- tional models to understand andIn last year’s Industry Overview, we Against this background, we believe harness new behaviors inside andnoted that those shifts—spearheaded the reshaping of the industry will take outside organizations in order toby digital migration—were driving place based on the perspectives of three grow their revenues and/or marginschange in three dimensions: the main groups: in the new normal.empowered consumer, the involved • For consumers: The creation of We’ll examine each of those perspec-advertiser, and transformation of more-compelling, more-immersive, tives in turn.the business for digital. The outcome and increasingly shared experiencesof that transformation was a new by understanding what connectedtype of organization we termed the consumers want—by finding theCollaborative Digital Enterprise (CDE), right little data amid the big data.heralding a wider shift to a collabora-tive ecosystem-based economy. • For advertisers and value chain partners: The design of newThe developments of the past year rein- business models that reinventforce that view while also underlining and expand the value proposi-the fact that talking specifically about tion of advertising and content“digital” increasingly misses the point. through innovation.Digital marketing, for example, nowmeans marketing in a digital world. Andas digital becomes the new normal, itsrising penetration ceases to be a topic fordiscussion. What matters is how compa-nies capitalize on it and operate within it.24 PwC | Global entertainment and media outlook: 2012–2016
  • 1. Understanding the connected consumerAny discussion or analysis of what’s 2011, which will rise to 55 percent content. But today’s younger gener­happening in entertainment and media in 2016. In contrast, other segments ations expect consuming media tomust begin with consumers. Why? are at the start of the journey: in the involve multifaceted, personalizedBecause change in today’s consumer consumer magazine circulation mar- experiences that they can touch andbehavior is both pervasive and acceler- ket, digital paid circulation accounted influence—meaning, they feel not justating—and E&M is in the front line of for only 0.4 percent of total circulation engaged but also immersed.that change. spending in 2011. But during the next Those ideas aren’t new for consum- five years, digital spending will surge,PwC’s 15th Annual Global CEO Survey ers who were early adopters of digital at a 76.1 percent CAGR, accounting forfinds that some 74 percent of CEOs in behaviors. But the difference today— 6.5 percent of total circulation spendingE&M are “somewhat concerned” or and the challenge for E&M companies— by 2016.“extremely concerned” about a perma- is that the expectation of an immersivenent shift in consumer spending and content experience has now extendedbehavior—the highest level of concern Demanding immersive and across the mass market, meaning thatin any sector. Other PwC research bears socialized experiences providers not only have to deliver on thisout the scale of the shifts under way: promise; they also must do so at ever-more than 80 percent of respondents So, what kinds of media experiences are greater scale.to PwC’s multichannel shopper survey1 these increasingly digital and connected consumers seeking? They’re often The drive for immersion is increasinglynow research their purchases online characterized as more demanding. In evident in the growth of such behaviorsbefore buying electronics, computers, practice, this encompasses three specific as personal marathoning and socialbooks, music, and movies. shifts. Today’s consumers want to: marathoning—consuming an entireAs the Outlook highlights, those changes series end-to-end either alone or socially.reflect an underlying and ongoing • Watch, read, or listen to what they With smart devices now enabling easiermigration in consumer behavior and want and when they want to— and fuller social interaction around suchspending toward digital consump- ranging from “now” to “in my own content as newspapers and magazines,tion and digital experiences. Growth good time.” that same sense of socialized immersionin digital spending—defined here as • Access and consume content simul- is emerging in other media and is drivingspending over Internet protocol plat- taneously via multiple devices and spending choices.forms in such segments as broadband connections: TV, smartphone, tabletand mobile Internet access, mobile TV app, social media.subscriptions, music, home video, videogames, newspapers, magazines, and • Find and engage with provocativebooks—will continue to outpace growth and relevant media experiences thatin nondigital spending during the next cross the traditional boundaries offive years. genre and immediacy—and ones they can share, shape, and control.Different segments are at differentstages of this industry-wide journey. These characteristics add up to a searchRecorded music—which already has for immersive experiences that unitea well-developed digital market—saw the personal with the social. Past gen-digital formats increase from 16 percent erations could feel engaged through theof spending in 2007 to 33 percent in passive consumption of mass-market1 “Customers take control,” PwC, December 2011; http://download.pwc.com/ie/pubs/2011_ customers_take_control.pdf. Industry overview | The end of the digital beginning 25
  • Online gaming: the connected shape of things to comeA useful historical parallel for the connected and socialized future may be the riseof online video games in Asia, where spending on online games overtook console/handheld games in 2010. Such online games—especially advanced casual gamesand massive multiplayer online games—were providing consumers with connectedsocial media experiences before people were even talking about social networks.As the chart below shows, Asian countries—which also have huge cultures of socialmedia, such as China, which leads the way—have maintained their lead in termsof growth in online/mobile gaming revenues. And outside Asia Pacific, suchmarkets as the US and Russia are also seeing healthy growth.Many reasons have been suggested for Asian populations’ eager embrace of onlineand social gaming, ranging from Asians’ relatively low participation in physicalsports to a simply game-friendly culture. But what’s clear is that online and mobilegaming acted as a precursor of the socialization of other media in Asia and couldplay the same role in other territories where online gaming takes off quickly whenthe necessary connectivity becomes available.In addition, as we’ll highlight later, online gaming has led the way in creatingflexible and sophisticated revenue models. To see the future of socialized media,online gaming is a good place to start.2007–11 growth in online/mobile video games (US$ millions) Russia 687 United States 1,286 Japan 1,376 South Korea 1,750 China 4,7070 1,000 2,000 3,000 4,000 5,00026 PwC | Global entertainment and media outlook: 2012–2016
  • The medium formerly …and turning the second analog TV in the living room put theknown as TV: toward the screen into the consumer’s family circle at the center of the sharedmedia hub… social nexus content experience, the media hub will shift the center of gravity toward a moreAmid these developments, one clear With the advent of smart devices, the geographically spread community oftrend is the continued strength of the concept of the media hub has now friends with shared interests, often ofmedium formerly known as televi- gained a so-called second screen for similar ages. This extended circle ofsion—or, more accurately today, video. sharing and enjoying these experiences friends could become the media hub’sThe consumption of professional video anywhere. And with formerly print- killer application, glued together by thecontent has never been more popular, based media such as magazines and shared content experience.partly reflecting the explosion in the newspapers launching smart-deviceways people can access it. apps, these forms of content could alsoThe growing number of ways and become part of the overall media pack- Smart devicescontexts in which people can experi- age—as part of a multisegment media spearheading change…ence video content is creating a blend bundle accessed via the media hub and The first signs of the socialized mul-of confusion, excitement, and choice for its connected screens. tiscreen future are already emerging.consumers. It’s also raising questions Some companies are already making But how is the consumer experiencingaround the value proposition and pricing the early running in this direction, such them? The answer lies in the rocketingof TV-only content bundles—especially as Technicolor, with its MediaNavi and take-up of smart devices.given the advent of a rising generation M-GO multiscreen content platform,of savvy and increasingly urbanized Since the launch of the original iPad in whereby MediaNavi serves as theconsumers who still love television but April 2010, tablets have brought home socialized and personalized hub forwant more flexibility: first, in the ways to consumers—like no other device navigating and accessing the universethey access and pay for content and has—what the future of media might of content, and the M-GO app expandssecond, what content they get. look like. For the first time, consumers that access across a range of connected became willing to watch premium videoLike previous generations, the new con- devices. With social media incorporated content on the go. And in addition tosumers are passionate about other media into the media hub concept, consum- cutting into PC sales, the tablet providesexperiences as well as television: live ers can take the logical next step from a metaphor for the feel of a future withconcerts, radio, magazines, books, and watching “everything whenever and ever-available mobile video and non-so on. But unlike previous generations, wherever I want” to having friends and video content.they demand, consume, and function family log in to share the experience inin a world of globally connected social real time. As soon as consumers held tablets, theymedia. And they’re increasingly adept could imagine a large one fixed on the liv- This could lead to an environmentat incorporating the various elements ing room wall for “big” content and fam- where all content is streamed as aof content and connectivity into their ily viewing; a handy-size one for a decent cheap, easily available, cloud-basedmedia consumption mix. All of this personal or social content experience on utility-style service, with the streamedpoints toward the multichannel, multi- the move; and a small one in the form of and shared live experience becomingcontent, multiexperience future: a con- a smartphone, for times when connec- the premium form of content. The digi-cept we’ve termed here the media hub, tivity, information, and immediacy are tal locker may also play a role, enablingwherein a mass of content is available for the priorities. Each device suits differ- consumers to store recorded contentan agreed price on all devices and where ent content and contexts. But the key is remotely and access it from anywherethe live experience—be it US basketball that portability, accessibility to content, on any device.or FIFA World Cup football or Lady Gaga on-demand capability, high resolution,in concert—comes at a premium. In such a world, the multicontent, and acceptable screen size—all of those multidevice media hub could regain the formerly conflicting goals—have finally role that TV held as the nexus of the col- been reconciled. lective social experience from the 1950s through the 1990s. However, while the Industry overview | The end of the digital beginning 27
  • …across broadcast and Consumer trends knock on …creating opportunitiesprint media into B2B business models… for curators and B2B2CSmart devices bring transformational Consumers’ behavioral changes are also providersopportunities across E&M segments. driving change in business-to-business For B2B information providers, theFor example, TV companies could give (B2B) publishing. Most consumers are most direct and most sustainable way toconsumers a customizable tablet/smart- members of the business workforce— maximize their proposition to advertis-phone app that brings up a consumer’s who are increasingly mobile as well as ers is to be a curator of information forown personal My Media on the TV, with accustomed to accessing information the target community. This informationthe consumer’s favorite shows, mov- via an ever-wider range of devices. They is often publicly available elsewhere: ifies, and apps. For instance, hotel guests expect the same immersive quality people have the time and inclination,could get their own personal channels and consistency of experience at work they can now trawl around to find aloaded straight up on the connected as in their private lives and are incor- mass of information on mergers-and-TVs in their rooms by pointing their porating social behaviors into their acquisitions deals on the Internet. Buttablets at the TV. business behaviors. subscribers to the Financial Times’ mergermarket, for example, prefer toTablets are also enabling print pub- For companies, these trends present pay mergermarket to act as their curatorlishers to present consumers with a challenges in terms of security and for such information, by providing themvalue proposition previously lacking in access, but they also open up business with tailored, convenient deal data seg-those publishers’ online products, thus opportunities. One outcome is that mented by sector on their smart devicesconvincing consumers to pay for addi- corporations are setting up social net- as they travel to work.tional and premium content. Examples works to encourage collaboration andinclude the New York Times’ paid-for innovation. Another is that formerlyfashion app called The Collection, print-based B2B information publisherswhich draws from a number of the are starting to view their businesses innewspaper’s products and repackages a different way. It’s no coincidence thatthem together stylishly. on its Web site, Wolters Kluwer of the Netherlands now calls itself “a globalMore generally, as the Outlook high- provider of information, software, andlights, tablets’ superior content experi- services” rather than a publisher.ence is enabling growing numbers ofprint publishers to harness rising digital This is a major shift. For B2B informa-revenues. E-books are claiming a ris- tion providers, the core value of theiring share of the paid-for book market. business used to lie in their originalAnd more and more newspapers are product, such as a trade magazine orboth launching apps and putting their directory, whether physical or online.content behind paywalls—often with a But today, these businesses’ real assetfree incentive so as to win over commit- is the deeply engaged specialist com-ted print consumers. When Australia’s munity with deep domain expertise forHerald Sun launched its new paywall- whom they provide information andprotected Web site and m-site alongside interaction, thereby acting as a gatewayits iPad app in early 2012, for example, for advertisers.it offered an initial two-month free trialof its Digital Pass.28 PwC | Global entertainment and media outlook: 2012–2016
  • Increasingly, it is employers who pay academic papers faces the danger that the The raw material needed to build thatfor this service—a trend that reflects academic community can bypass it and understanding—consisting of big datathe emergence of a new category of publish direct to peers over the Internet. on consumers’ activities, lifestyles,media: B2B2C, or business-to-business- In contrast, differentiation through out- behaviors, and transactions—is nowto-consumer. Twenty years ago, news- standing curatorship is much harder for available at a previously inconceivablepapers like the Financial Times and the anyone else to take away. scale and depth. For example, socialWall Street Journal were mainly B2C. networks represent a potentially richSince then, the proportion of circulation source of consumer data: according torevenues coming from combined print The finger on the comScore, nearly one minute in fiveand online licenses sold to corporations consumer’s pulse… that consumers spend online is nowappears to have risen steadily. Employees In segments ranging from B2B infor- spent on social networks. By joiningwant these publications as curators and mation to consumer magazines, to consumers on those networks, by get-aggregators providing reliable news and streaming live music, smart devices ting involved in their conversations, andsharp analysis, and employers can see are helping usher in the connected by mining their activities via analytics,the value in paying for the service. multiscreen future. But to engage and companies can not only build deeper immerse consumers in that future, E&M relationships with those consumersActing as a curator protects a B2B pro- companies will need to understand but also generate valuable insights intovider from the threat of disintermediation consumers’ behaviors, motivations, and ways of serving and selling to themby the original sources of information— expectations and to be able to access more effectively, thereby benefitinga risk that particularly affects B2B models such information as location and trans- both ad-based and subscription models.based on acting as a channel for propri-etary data. For example, a publisher of action record. Industry overview | The end of the digital beginning 29
  • …by using analytics to find Privacy concerns: a major …that might be overcomethe little data in the big data global barrier… through a win-winGetting this right isn’t easy. The sheer But the data that brings consumer In our view, there’s a middle way thatvolume and noise of big data make it insight also brings risks. An ongoing companies could pursue. Consumershard to identify and apply the little data issue for E&M companies and policy are happier to provide information ifwithin them—the granular individual makers within governments across they get in return something they value,information that enables companies the world is consumers’ fear over such as filling in a questionnaire at theto personalize their communications the privacy of their personal infor- supermarket in exchange for loyaltywith consumers and engage or immerse mation, with signs of a public and points. But they’re concerned aboutconsumers more effectively. Many com- regulatory backlash against spying by companies’ going too far by monetizingpanies are feeling their ways to learn online applications. their data first and asking permissionto generate real value from data, and later. Given such worries, there’s an Consumers’ concerns have been intensi-they’re still collecting and mining only opportunity to give consumers more fied by confusion and controversiesthe most basic of information. control over how their personal data surrounding the privacy approaches gets used and to deliver higher benefitsGoing forward, E&M businesses will taken by global online giants, including in return, thereby encouraging them toraise their game in this area, because the recent coverage of Facebook’s deci- volunteer even more information.they know they have to. One sign of sion to repackage its Timeline featuretheir commitment to driving value and create ads based on users’ media Under the current model, the advertiserfrom data is the continuing rise in the consumption. Such instances may con- works on behalf of the brand, not onprominence and power of data analytics tribute to consumers’ sense of unease behalf of the consumer. What’s neededcompanies and skill sets—particularly about how their personal data might is a model that produces a win-win,those able to assess audience intelli- be used. Those concerns are creating with the medium, the advertiser, andgence at the consumer level and deliver the risk of regulatory actions that could the consumer all collaborating andwarm leads, such as a specific product- potentially threaten the growth not only benefiting transparently in a way that’spurchase intender. of the digital media industry but also ethical and legally appropriate. of the broader, digital economy. ThatA related development is the drive to Such a model demands collaboration risk underlines the need for furthercreate new measurement systems for as well as the acceptance that the only rapid progress in such areas as securemany segments of media, ranging from ones who own customers—and the digital IDs.radio to out-of-home and from maga- customers’ data—are the customerszines and newspapers to TV content themselves. This would require a shiftacross platforms—a subject we return in the industry’s mind-set, from theto later in this Industry Overview. And legacy focus on customer ownership tothe rising importance of data analytics a new approach based on putting theis further underlined by the intensifying customer in control—with all partieswar for talent in the consumer insight agreeing that personal data can be usedspace, with E&M companies compet- only in ways the customer has agreed toing head-on against other sectors with by opting in.B2C relationships—such as banks and We now look at new business modelsretailers—which often have a head start that will enable companies to turn con-in this area. sumers’ attention and engagement into revenues.30 PwC | Global entertainment and media outlook: 2012–2016
  • 2. Devising new business models to reinvent and expandthe value proposition of advertising and contentA world of difference… an overall economic growth perspec- So, far from hampering growth, a lack tive—are fundamentally different in of legacy analog connectivity and mediaIn the face of the three main shifts terms of, say, installed communications choices makes consumers in growthwe’ve highlighted—analog to digital, infrastructure. India still faces short- markets more voracious for new digitalfixed to mobile, and West and North to comings around infrastructure, with choices—partly because the novelty andEast and South—the core challenge for comparatively little fixed broadband excitement are greater and partly becauseE&M companies lies in how to remain and with mobile broadband still embry- those consumers don’t have to cope withrelevant to their consumers and busi- onic. In contrast, China has excellent a transition from old behaviors. Theseness customers in a way that differenti- mobile infrastructure following several dynamics are demonstrated by the vora-ates them from their competitors. years of heavy state-driven investment. cious take-up and usage of social mediaAt the global level, that means reach- in markets considered to be developing,ing people in different territories and such as Indonesia and Thailand. …with pockets of pent-upgiving them content experiences that The pent-up demand for connectivityfeel local and personalized. In the growth potential also helps explain why businesses inshort term, E&M companies will be What’s more, the impact on consumer growth markets are outpacing matureboosted by cyclical economic recovery behavior when such services as mobile territories in the pursuit of the com-particularly in markets in the Northern broadband burst onto a market can mercial potential of mobile broadband.Hemisphere. But that should not mask be electrifying. Even if the infrastruc- A PwC-sponsored study of 363 C-suitethe long-term structural and organiza- ture to support new media offerings is executives2 finds that businesses intional changes that are needed—and currently rudimentary or lacking, the fast-growing economies are embrac-under way—right across the industry. growth in usage and revenues in that ing mobile more readily as a driver of market can be explosive, once ignited business growth and innovation. SomeFor companies operating internation- by connectivity. We project that during 85 percent of respondents in India sayally, this reshaping of their organiza- the next five years, India’s mobile access mobility will be very important intions is made more difficult because market will expand at a 42.4 percent creating new products and services,while many of the trends are global, CAGR—the fastest in the world—and compared with 67 percent in Australia;the solutions vary locally. The reason is it will also have the fastest-growing and 93 percent of respondents in Chinathat the E&M market in each territory wireless video game market, expanding say mobile consumers will lead to busi-worldwide is developing in a different at a 22.2 percent CAGR. Similar dynam- ness model transformation, comparedway from a differing starting point. ics can be seen in the rapid take-up of with 57 percent in the US.Such diversity means the traditional mobile banking in Africa, as providersdistinction between developed markets and consumers leapfrog the stage ofand emerging markets becomes increas- physical branch infrastructure.ingly irrelevant—or even misleading. 2 The new digital economy: How it will transformFor example, India and China—two business. Oxford Economics, June 2011. A research paper produced in collaboration withcountries often bracketed together from AT&T, Cisco, Citi, PwC, and SAP. Industry overview | The end of the digital beginning 31
  • Internet subscriber growth (2012–16 CAGR)Internet subscriber growth (2012–16 CAGR) A leading indicator: online/mobile and social40 engagement This analysis points to a new basis for 30.9 benchmarking the growth potential of30 different markets. Traditionally, such 22.5 statistics as rising fixed and mobile20 Internet penetration have been used—a 17.5 16.0 15.4 measure where Latin America and Asia Pacific are now leading global growth10 9.5 (see the chart at top left). 6.8 5.1 However, even though Internet penetra- tion influences current year-on-year 0 Latin America Asia Pacific EMEA North America growth in E&M, it says less about future potential. A complementary measure Fixed broadband might be in the form of engagement Mobile with new forms of consumption, such as the average number of hours the cur- rent population of Internet users spends on online or mobile activities, espe- cially social networks. The chart at theMost-engaged markets for social networking (average monthly hours per user)Most-engaged markets for social networking (average monthly hours per user) lower left, based on comScore research, shows that not a single mature Western12 11.1 economy makes it into the world’s top 10.7 10.4 10.2 9.8 nine most-engaged markets for social10 networking. Only Canada makes it into 8.7 8.5 8.3 7.9 7.7 the top 10—in last place. 8 6 4 2 0 Israel Argentina Russian Federation Turkey Chile Philippines Colombia Peru Venezuela CanadaSource: comScore Media Metrix, October 201132 PwC | Global entertainment and media outlook: 2012–2016
  • The reinvention of behavioral factors and drivers such as Advancing socialization is feeding intoadvertising—in the image location. This is why some targeted the widely accepted concept amongof the consumer Internet advertising is now generating agencies and advertisers of bought- higher costs per thousand views (CPMs) owned-and-earned advertising—toRegardless of differences between than network television is. which we’ve added a fourth category:markets, the overriding trend across the managed. Bought media consist ofworld is that consumers’ engagement Already, audience metrics and measure- traditional above-the-line platformswith connected digital experiences is ment are changing rapidly in response such as the paid-for 30-second spot.continuing to grow. As this happens, it’s to such shifts. Customized metrics are Owned media are brands’ Web sitesincreasingly evident that people’s time valuable for retrospectively testing the that consumers are driven to by ads.and, by extension, the data generated impact of audience reach and engage- Managed media is the orchestrated usethrough the ways they spend it are cur- ment on the effectiveness of advertis- of social media, such as engagement viarencies that can be monetized. While ing campaigns, for planning future bloggers. And earned media consist ofthis has always been the case, the addi- campaigns, and for allocating market- ad content that generates massive hitstion of digitally derived insights to the ing spend across media. In the UK, for through social recommendation.mix is now redefining advertising—and example, the Financial Times and threeexpanding its value proposition. UBM titles have published new metrics More and more brands are using earned assured by PwC, designed to reflect or unpaid media in their mixes, becauseUntil recently, the natural choice for more accurately their entire audience a shared ad—if it takes off—can gener-an advertiser looking to reach, say, footprint across platforms. ate returns out of all proportion to thepotential car buyers might have been to investment, especially if integratedadvertise on the major auto Web sites. across media. In China, PepsiCo’sBut by applying analytics to individu- Socialization of advertising: Bringing Happiness Home campaign—als’ browsing behaviors, ad agencies bought, owned, managed, featuring Pepsi, Lay’s, and Tropicana—and networks can now identify specific and earned… was delivered simultaneously on TV,so-called auto-intenders who have online, in store, and at people’s homes.the highest propensity to buy a car in A further aspect of the primacy of data is socialization of advertising. Two weeks into the campaign, thethe next 12 months. So messages can campaign’s main 10-minute minimoviebe directed via other touch points to Consumers are increasingly sharing rec- ommendations and (usually humorous) had been viewed over 100 millionspecific individuals more likely to take times. And Coca-Cola’s 2012 Superaction on the desired decision. sponsored content with their friends via social media—sometimes incentiv- Bowl advertising used its iconic polarSuch developments mean premium ized by consumer-rewarded advertising bears in an animated cross-platformresults are increasingly key to getting mechanisms such as loyalty points and social media campaign, with the bearspremium rates. Using display ads is payments in virtual currencies. responding in real time to on-fieldseen as an increasingly commoditized events, consumers’ tweets, and ads dur-approach. Instead, advertisers will pay a Socialization of advertising is also being ing commercial breaks.premium only for clearly demonstrated fostered by consumers’ strengtheningpremium demographics, a proven engagement with the live shared experi-track record of engaged consumers, ence, ranging from concerts to cinema, toor solid revenues from click-throughs. exhibitions. These live formats are drivingSimilarly, the conversation has shifted growth in experiential ads, such as por-from display inventory to the value in table cardboard seats for music festivals, which act as minibillboards for brands. Industry overview | The end of the digital beginning 33
  • Advertising and marketing agencies:three key strands of changeThe move from digital marketing to marketing in a digital world is driving changefor agencies in three interconnected dimensions as follows.Convergence of agency roles: Creative agencies and media agencies are increas-ingly converging, as creative agencies seek to offer a full service including areaslike digital and sponsorship strategies and as media agencies become moredigitally savvy and creative. Niche agencies—including PR, event management,and digital specialist—are also looking to strengthen their relationships withbrands and disintermediate the bigger agencies. Clients now expect all of theiragencies to have high IQs in digital.Payment-by-results: What matters today is not where agencies have come frombut the results they deliver. Yet cost-plus models still dominate agencies’ remuner-ation, making them feel that brands are failing to fully recognize and reward thevalue they generate through their creativity and innovation. So, agencies—andsome brands—are pushing toward pay-for-performance remuneration models,wherein compensation reflects the value delivered on both sides.Driving changes in metrics: The move away from cost-plus and toward perfor-mance-based remuneration demands new metrics. So, agencies are directingclients’ attention away from input measures such as cost-plus and instead towardoutputs such as earned or unpaid media reach, recall rates, purchasing intentions,and brand awareness—all contributing to performance and return on spend.Going forward, remuneration for media campaigns will become increasinglylinked to performance metrics. Evolution of those new measures is being led bysuch bodies as the Coalition for Innovative Media Measurement*.*See http://www.cimm-us.org.34 PwC | Global entertainment and media outlook: 2012–2016
  • …driving profound consumer footprints that could compete enable and support experimentation,change for agencies more effectively for online advertising innovation, and execution. They might against the global search and social be called ideas generators.The rise of unpaid media reflects an media giants. This possibility underlinesinnovative, new fusion of advertising, As the various roles crystallize, media once again the scope for new perfor-content, and analytics—and is helping groups will conduct portfolio reviews mance metrics.drive sweeping change in the roles and to decide which they should focus on.business models of creative and media Some companies may decide to playagencies. As their clients hunt for new New roles emerge across more than one of the roles—and evenideas and approaches, agencies are the E&M value chain all of them if they have sufficient scalestepping up to act as digital advertis- and reach. But size alone will not be a More generally, the evolution of the measure of success, and some partici-ing consultants, guiding their clients value chain over the next five years will pants will thrive by specializing andvia insights into opportunities around see new roles emerge across the E&M differentiating themselves in specificthe aggregation of data, socialization, industry, reflecting growing clarity niche roles.and content. about the business models that willThat trend is being accelerated by the generate value in the new landscape. Companies that take on multiple rolesdisappearance of the historical distinc- The precise mechanics of and balance will face pressure from shareholderstion between traditional and digital between those roles will vary from seg- to justify their investments in diversemedia. Everything that agencies do ment to segment, but we believe they activities and to show how those invest-for their clients now has an embed- will come to pervade all segments in ments contribute overall value. A num-ded digital component—and brands one form or another—enabling compa- ber of media organizations may respondwill increase their spend on previously nies to (1) occupy one or more specific by narrowing their focus to a smalleruntried models if they can see reason- parts of the value chain and (2) work range of activities at which they want toable likelihood of the right return. The collaboratively with other providers be world-class while using flexible col-shifts are driving change for agencies on whose capabilities are complementary. laboration to access any wider capabili-three fronts, as further described in the ties as and when they’re needed. What will the roles look like? Weaccompanying information panel. One shift already under way is that believe one of them will involve actingThese changes raise several challenges. as the online destination or physical some content companies that haveTo stay ahead, agencies need to be auditorium that hosts the customer traditionally operated on a B2B modelflexible enough both to adapt fast to experience—a role that could be termed are starting to build direct relationshipschange and to collaborate with a wide the venue. Another will be to act as the with consumers, thereby disintermedi-array of media, technology, data, and aggregator and filter for the target con- ating their existing distribution chan-research companies. sumers’ content requirements, possibly nels. The underlying agenda here is termed the community curator (super- transformation into a consumer-focusedBut whatever alliances they form, data connected company. Examples include seding the publisher). A further roleanalytics is increasingly central to HBO with HBO GO, whereby HBO will be as provider of exclusive content,agencies’ ability to demonstrate value offers its own content for streaming perhaps called the content monopolizer.for clients. Digital measurement tools direct by consumers. Device developers will have a con-mean brands can demand far greater tinuing part to play by collaborating Ongoing disintermediation can also beaccountability and insights into ad closely with other participants to ensure seen in such segments as books, movies,effectiveness. And agencies are invest- the right experience. Some strongly and music. J. K. Rowling is bypassinging in search engine optimization and branded players will seek roles as online retailers by selling unencryptedeconometric modeling, prefiguring consumers’ trusted companions for all electronic versions of her Harry Potteran opportunity for them to act as data content across devices, perhaps termed books direct over her own Pottermoreconsolidators. For example, an agency the digital services champion. And there Web site. Paramount Pictures offeredcould aggregate customer data across will be third-party specialists that col- an online streaming option in 2011 fora community of smaller online publish- laborate with the other participants to Transformers: Dark of the Moon.ers and build a collective volume of Industry overview | The end of the digital beginning 35
  • In music, the labels—which have never revenues rose by 18.9 percent in 2011, ad-free version. Bolt-on microtransac-had strong consumer brands—are indicating that renting is gaining both tions have also proved popular. Gamesbeing disintermediated by artists’ going market share and mainstream accep- providers often offer the consumer thedirect, as well as by such entrants as tance. One factor may be that past expe- option of purchasing virtual goods forRIM, Wal-Mart, and Live Nation. rience has made consumers wary of use within a game or of performing a owning content on formats that might function with a monetizable benefit toIndeed, Live Nation’s 360-degree deals, become obsolete. get some benefit back in return, suchwhich essentially position the artist as earning virtual in-game currency byas a brand to be managed, effectively Overall, the various trends highlight signing up for a newsletter, looking atinvolve outsourcing the distribution the need for flexibility in the way that an ad, or giving feedback.chain. And the rise of the so-called pro- different types of content are priced andsumer is a further form of disintermedi- delivered. For example, some high-end Online gaming’s historical role as aation, with consumers turning producer consumer magazine publishers are find- leader in socializing the entertainmentto create and sell games, music, films, ing that 30 or 40 percent of the single experience suggests similar modelsand books over online platforms. copies they sell on tablets are back may emerge in other segments. To date, issues, which consumers then store and movie studios’ attempts to sell or rent keep digitally. This opens up opportuni- content through social media have hadPaying for content: ties to sell a “rental” subscription for mixed results. Consumers tell us theyrenting, not owning… current issues, and use an “ownership” would be more willing to pay if theThe models for monetizing content are model for selling back issues. It also payment was in a virtual form such asalso continuing to evolve. As we’ve noted underlines that the long tail of existing Facebook credits, but this raises com-in previous editions of the Outlook, content continues to offer opportunities plexities around how to get the realconsumers will pay for privileged access for additional revenue. dollars back into the right hands.to content they want, such as being able Across the whole area of pricing, theto consume it ad free or ahead of other question remains regarding how the …and using an arraypeople. But in cases when they want to future infrastructure to service rising of pricing modelssample content to find out whether they demand for bandwidth will be paidlike it, our conversations with consumers The trend toward differentiated pric- for (see information panel). As we’vesuggest they generally don’t want to ing in consumer magazines is mirrored highlighted in previous editions of thepay anything for new content the first in other segments by the emergence Outlook, this issue demands a collab-time they try it out. This tendency may of a wide array of segmented pricing orative solution involving content andin part be driven by—or reflect—the models. These include free or paid-for distribution. But the collective will tomove toward freemium business models, options, respectively with or without drive that solution may emerge onlywherein people can receive a free ads; tiered pricing, again with or with- once the bandwidth crunch comes, andad-supported taster before upgrading out ads; payments in virtual currency; consumers’ services start to degrade.to the premium paid-for variant. stored-value micropayments to buy bolt-on “packs”; and rental models Ultimately, however, solutions will beA further factor is that consumers found to the challenges around both charging cash or virtual currency overgenerally appear to be moving toward infrastructure and consumer privacy. social networks.wanting to rent content rather than As business models for the new E&Mown it outright. While people could see The interactive game sector—especially environment start to take shape, atten-some worth in building up VHS, CD, mobile—has established itself as a tion is turning to the organizational andor DVD libraries on their shelves, they leader in innovative price segmenta- operating models needed to underpindon’t perceive the same kind of value tion, creating flexible models wherein them. This is the third dimension of thein building digital content libraries. In consumers can chose an ad-supported reshaping of the industry.the US, recent data from the Recording version, a “lite” version, or a premium,Industry Association of America showsthat music streaming and subscription36 PwC | Global entertainment and media outlook: 2012–2016
  • Infrastructure: broadcast economics are not satisfying on-demand needs A frequently overlooked advantage of traditional broadcasting over the airwaves— whether digital or analog—is that traditional broadcasting is very efficient in terms of infrastructure costs and requires minimal spectrum to serve a large base of consumers. However, as consumers access more and more bandwidth-heavy content on demand—including HD video—over wired or wireless telecom net- works and as more and more machine-to-machine (M2M) devices ranging from smart meters to fridges get connected, these networks’ capacity inevitably comes under strain. Compression technologies and content distribution networks (CDNs) are helping slow down the squeeze. But as demand continues to rise, billions of dollars of investment will still be needed to build out the necessary infrastructure—and consumers are not yet paying enough for access to fund that. To try to close the gap, bandwidth providers are introducing data capacity limitations and usage caps. But consumers resent such limits, partly because of the history of “all-you-can-eat” access. From bandwidth issue to business model headache The net-neutrality viewpoint might see this as a problem for telcos to sort out, but in fact it is a shared problem demanding a collaborative solution. There is a cost associated with delivering to any device a program or a product. While distributing at current levels may be sustainable, the continuing future growth in on-demand delivery and M2M will see real macro growth in those delivery costs, and it is not clear who will pick up the bill. The hidden costs of on-demand and M2M delivery also mean that the cost struc- ture changes significantly for broadcasters whose viewers switch to online and catch-up services. To date, the emphasis has been on the benefits of online media: creation of stickiness, reduction in churn, allowing better bundling. But as volumes continue to rise, distribution costs will become a growing issue. Industry overview | The end of the digital beginning 37
  • 3. Developing organizational models to harness newbehaviors and grow revenues in the new normalReorganizing around • Better scalability, thereby gaining Repositioning digital as the engine ofdigital… greater agility to grow and flex the the business demands that businesses business—through digital work prioritize several key investmentsOver the past decade, many E&M flows; rights and royalty solu- (see information panel) and can bringbusinesses have developed their digital tions that can support millions of several additional benefits in return.business as an adjacent operating group, digital transactions; and digital It enables the business to rebalance itswith additional separate infrastructure, consolidation of physical format skills and capabilities around control,solutions, and staff. But in the new archives to reduce costs and boost data, and smart commercialization tonormal, with digital established as commercial exploitation. drive new services. And it can enablepart of business as usual, that siloed companies to tap into cloud-basedapproach has passed its sell-by date. The • More effective and continual models that might handle 95 percentdislocation it causes between digital and innovation through integration of their offerings’ functionality—mean-physical is hindering consistent customer and automation, thereby freeing ing, they’re freed to focus only on theinsight, holding back revenues, and up time for staff to collaborate and last 5 percent that interfaces withlimiting the scope for cost efficiencies generate new ideas. the customer.on both sides of the divide.The imperative is to combine theduplicate processes into a single,enterprise-class digital operating modeland capability, enabling companies tocreate once and distribute anywherethey choose. A digital model positionsthe business to reshape itself for the newnormal and to harness new behaviorsmore effectively as a source of revenues.…to boost profitability,scalability—and innovationE&M businesses across broadcast,music, print, and publishing havegrasped the need to move digital tothe center of their operations, are nowintegrating their digital divisions intothe main enterprise, and are targetingbenefits around three key areas:• Higher profitability by reducing operational costs through common platforms and integrated busi- ness processes, thereby enabling the enterprise to take advantage of identifiable unique content and consumer experience assets across multiple platforms.38 PwC | Global entertainment and media outlook: 2012–2016
  • Integrating digital across the business Some key priorities indoesn’t mean focusing just on digital integrating digital acrossend products and experiences. Content the businessthat is created and stored digitally canstill be distributed on analog platforms. While different businesses are atAnd some newspapers are demonstrat- different stages of their digital integra-ing that premium glossy print products tion and transformation, a number ofcan still boost ad revenues and sustain key steps usually emerge as priorities.circulation, supported by digital work These include:flows. Printers of the Globe and Mail • Cost optimization and processin Canada built a new printing plant, integration by bringing digitalenabling the publisher to upgrade to divisions into the main enterpriseglossy paper for its Saturday section and replatforming around digitaland capture a significant slice of the work flow for end-to-end productionavailable fashion advertising while and distribution.also maintaining print circulation ina declining market. • Rights and royalty optimization in order to sell content globally with effective rights and royalty tracking and payments. • Metadata modeling, which imple- ments unique identifiers, structures, and tags to organize all products and assets that are the keys to digital processes. • Archive consolidation and com- mercialization to reduce physical asset and facility costs, usually by about 40 percent, and to prioritize digital assets for commercial distribution. • Digital content and publishing integration to create a new, enter- prise-class production/editorial and commercial/ advertising platform— usually with a commercial partner. Industry overview | The end of the digital beginning 39
  • Barriers to address: …and piracy: still a One way to do so is by reducing the bar-rights, royalties… growing problem riers to legal availability. Movie studios are showing signs of moving in thisWhile the journey to put digital at the Piracy is a further area to address, direction by testing out new windowingheart of the organization brings clear and it remains a growing problem in strategies, such as launching films onbenefits, there are barriers along the many markets. However, the relation- the same day and date across marketsway. One of the biggest involves content ship between growth in the legitimate and platforms. But such approachesrights and royalties—an area where markets and the pirated markets is a are still rare—resulting in consum-many companies are burdened by rigid complex one. In countries where the ers’ feeling frustrated and searchingand complex legacy bespoke systems physical format market (such as music for alternatives.that can have direct impacts on their CDs) was previously dominated bybottom lines. pirates, even a small shift to legitimate In our view, a more fundamental issue digital consumption represents a huge is that consumers intrinsically do notIn the airline industry, for instance, understand why content rights matter— percentage growth in the legal market,operators know when a plane will a knowledge gap that may critically from a low base. And the global chal-take off with an empty seat and that undermine efforts to introduce new lenge of piracy is now further com-they need to act and sell that seat fast. windowing and revenue models. Closing plicated by the reach of sophisticatedSimilarly, E&M companies need to know the gap requires education. However, illegal content-sharing sites.when the rights to their content in any measures to justify and enforce rightscountry are about to expire, because if Legal moves to tackle piracy are invariably raise the question of Internetthey don’t renew the rights, the rights continuing. In recorded music, freedom versus the right of content own-will diminish in value. So they need graduated-response programs have ers and talent to be paid appropriately.a management system that removes helped reduce unauthorized file sharing, The debate will continue—as will thethat risk. with the International Federation of debate over regulation as media regula- the Phonographic Industry reporting tors struggle to switch from regulatingBut this has become more challenging reductions in piracy in 2011. A further yesterday’s world to regulating tomor-for three reasons. First, despite moves high-profile action was the US Federal row’s (see information panel).toward multiformat IP-based distribu- Bureau of Investigation’s January 2012tion, rights still often vary by platform. swoop to shut down file-sharing Web siteSecond, payment schedules vary Megaupload and arrest its founder.significantly by format. And third, thesheer number of contracts required for Irrespective of the legal position, theall of the content channels and formats widespread mind-set in many countriesis making the whole exercise ever more is still that piracy is not a crime or is atcomplex. In many cases, rights buyers worst a victimless one. However, in con-face comparable complexity and legacy trast to the handful of committed digitalchallenges in their side of the deal. pirates, most consumers are somewhere on a spectrum between complete legiti- macy and criminality. And those who undertake piracy usually do so because easy and cheap opportunities arise or because they cannot get the content any other way. Companies and regulators need to encourage people to shift toward the legitimate end of this spectrum.40 PwC | Global entertainment and media outlook: 2012–2016
  • Regulation: still no level playing field In all markets, regulation remains a huge issue for the industry—and looks set to remain so for the foreseeable future. The impact varies by region and geography, yet the overarching problem is that while E&M companies such as TV stations and newspapers are heavily regulated, online providers are not. Across the world, regula- tory frameworks are still struggling to catch up with the industry’s development and are failing to anticipate the changes being driven by the shift to a digital world. In Europe, the regulatory debate is dominated by privacy issues—with the European Commission and French regulators voicing public doubts about whether Google’s new privacy policy is legal under European law and with Google insisting its policy is compliant with the relevant legislation. In the US, the focus is on the balance between Internet freedom and content owners’ ability to monetize their rights. In 2012, opposition to the US Stop Online Piracy Act (SOPA) and the Protect IP Act (PIPA) prompted a blackout by the English version of Wikipedia and an estimated 7,000 other sites. And the multina- tional Anti-Counterfeiting Trade Agreement (ACTA) has prompted protests in Europe. Ironically, as some opponents of measures such as SOPA move toward being creators of original content, they will find themselves exposed to piracy. Events in the US will affect the industry worldwide, but in some territories specific local issues are to the fore. In the UK, the scandal over phone hacking by newspa- per journalists prompted a debate on tighter press regulation. In Australia, a government-led media Convergence Review is (1) looking at whether rules to maintain existing levels of Australian content can be extended to Internet publish- ers and (2) examining cross-media ownership. Industry overview | The end of the digital beginning 41
  • The CDE starts to emerge role for the corporate head office is The raw materials: talent to track the incidence and value of and innovation…In last year’s Outlook, we proposed the collaboration and then communicateCollaborative Digital Enterprise (CDE) The technology to deliver the CDE this value internally and externally.as the future organizational model for exists now. The main challenges involvethe industry. This is a digital-based • Externally, the choice is as wide as, marshaling and leading the talent andorganization that can collaborate Who to collaborate with? And how? the innovative culture needed to makeflexibly, openly, and effectively, both Several collaborative initiatives it a reality.internally and externally. Such a model now reflect this type of model. Theyis now starting to emerge. And our CEO include the multi-industry, 70-mem- As our 15th CEO Survey confirms, E&MSurvey shows that more CEOs in E&M ber Digital Entertainment Content CEOs are well aware of the risks aroundthan in any other sector—64 percent— Ecosystem consortium (DECE), and talent. Asked how concerned they areare planning new strategic alliances or its UltraViolet digital rights locker, generally about the availability of keyjoint ventures in the coming year. with the member companies collabo- skills, 65 percent—compared with rating around creation of the plat- 54 percent across all industries—areTransforming to a CDE involves tough “somewhat concerned” or “extremely form and then working separately tochoices and changes, both internally concerned,” second only to the technol- develop business models that wouldand externally: ogy sector. And to find and retain the make the most of it.• Internally, there are decisions to talent they need, E&M companies will Another example is Le Collective, have to meet the distinctive priorities be made around the organizational a group of large French publish- and needs of the Millennial generation model: should it be based on a ers—including Lagardère, Amaury (see information panel on page 44). holding company or an integrated Médias (publisher of L’Équipe and Le operating company? In our view, the Intrinsically linked to talent is the need Parisien), and Le Figaro—which have CDE lends itself to the integrated to develop a culture of innovation—not come together to create a supply- operating company model: major just in technological terms but also in the side advertising exchange for their media companies cannot leverage way people collaborate and approach premium digital assets. In the US, the their scale effectively if their divisions problems. Research and development no NBC reality TV show “Fashion Stars” are operating as independent longer happens only in the lab, and an involves close collaboration between fiefdoms. So some are moving toward innovative culture forms a virtual circle NBC and retailers Saks, Macy’s, and collaboration within the company— by attracting innovative talent, who in H&M, which bid for the designs and for example, around shared services turn reinforce the culture. make the clothes available the day and common data. Also, internal after each episode. Another example However, in getting the innovative collaboration is a prerequisite for had Levi’s teaming up with Facebook digital development talent they need external collaboration: if people to launch a branded online game that as channels proliferate, E&M com- cannot collaborate inside, they’ll teaches consumers how to conserve panies face fierce competition from hardly be able to do so outside. water. The game generates funds for pure-technology companies—which Embedding collaboration across Water.org, which provides safe drink- generally tend to pay higher salaries. divisions often requires a cultural ing water in developing countries. E&M companies need to overcome this mind shift and realignment of barrier by being better employers and Initiatives like these could herald the rewards. Some global groups have by leveraging nonfinancial attractions emergence of the type of win-win busi- created a shared cookie jar of cash, such as “cool” branding. ness model we highlighted earlier, with with the group acting as Mom and media, advertisers, and consumers all Dad by topping up the jar every benefiting in a mutual, ethical, and time the child (division) is good legal way. (collaborates with others). At the end of the year, the cookie jar is opened and shared among those who’ve earned it. In this case, an important42 PwC | Global entertainment and media outlook: 2012–2016
  • …marshaled by leaders whounderstand behaviorThe changing nature of the workforcereinforces the importance of a key successfactor in E&M through 2016: the need forclear-eyed leadership from people whounderstand the power and motivationsbehind the behavioral changes underway. These leaders will ask questionsrather than dictate strategy; empowertheir people rather than direct them;and embrace an innovative new culturethrough their own behavior rather thantry to impose it through rules.The key is that the changing behaviorsof employees and consumers demanda new way to foster, measure, andimprove performance and thereby pro-ductivity. Specifically, it requires aware-ness of behavioral drivers that goesbeyond the familiar world of reasonthat defines strategy, operating model,and process. And it involves asking whatmotivates people to act with passion aswell as uncovering the “moving parts”and unconscious biases that can causeirrational or damaging behavior.Identifying those moving parts requiresan understanding of behaviors acrossboth the new generation of Millennialemployees and the older workforce.In today’s organizations, a few inter-actions, and a few people—whetheremployees, customers, or partners—can drive disproportionate value—orthe loss of it—at moments of truth.Routines and habits shape most ofthe behaviors in organizations: thedata people use, the way meetings are determinants. Increasingly, they’ll need (2) the potential for going beyond rea-run, the input people seek. To change to understand and tackle those poten- son to inspire performance. The E&Membedded habits—and the resulting tially damaging behavioral norms. organization led in this way will bebehaviors at moments of truth—leaders more agile, more innovative, and more Putting behavior at the heart of perfor-often amend processes, operating pro- engaged—thereby making it better able mance will help E&M leaders addresscedures, and authorities. But rarely do to line up strategy with performance those issues—by enabling themselvesthey challenge the habitual and irratio- and to tap into the opportunities that to understand both (1) the limitationsnal behaviors that may override those will emerge over the next five years. of reason as a predictor of behavior and Industry overview | The end of the digital beginning 43
  • Eight principles for recruiting and retainingthe best Millennial talentA PwC survey* of Millennial employees worldwide shows they’re “loyalty-lite,”with only 18 percent planning to stay in their current roles long-term. But theywant more than money, regarding training and development and work/lifebalance as more important than financial rewards. Findings from the surveyconclude that businesses can attract and retain the best Millennial talent byapplying eight principles as follows.• Understand this generation. Use metrics and benchmarking to segment the workforce and to understand how Millennial employees’ motivations differ.• Get the deal right. Explain clearly what you are offering a potential employee and also what you expect in return. Think creatively about reward strategies.• Help Millennials grow. Understand their personal and professional goals, put them on special rotational assignments to gain a variety of experiences, and challenge them to exercise creativity and come up with new ways of streamlin- ing processes.• Give feedback, feedback, and more feedback. Millennials want to know much more regularly how they’re doing. Give honest feedback in real time.• Set them free. Millennials want flexibility: if you know what you want done and by when, why does it matter where and how they complete the task? Give them flexible work schedules.• Encourage learning. Millennials want as much training as possible. Build and measure the effectiveness of mentoring programs alongside other learning. Let them connect, collaborate, build their networks—and, most of all, innovate.• Allow faster advancement. Historically, career advancement was built on seniority and time of service. Millennials value results more than tenure and expect fast career advancement.• Expect Millennials to leave. Rates of churn among Millennials will be higher than among other generations, and this should be built into your plans.*Millennials at work: reshaping the workplace, PwC, 2011.44 PwC | Global entertainment and media outlook: 2012–2016
  • Conclusion: The end of the beginning arrives…In the face of sweeping change and By embracing digital as the engine As collaborative groupings emerge,uncertainty, the E&M industry has of their business and using digital to different players will adopt differentspent the past few years seeking the integrate and automate processes from and complementary roles in the valueright business models for the new, content production to rights manage- chain, and analytics-driven data insightsdigital world, through an iterative cycle ment, companies can position them- will act as the glue holding them allof constant experimentation, ongoing selves to meet consumers’ changing together. At its best, these collaborativeinnovation, and targeted analysis of demands through any channel and groupings will bring together thethe results. The cycle is far from over: format—and more effectively and more advertiser, the agency, the media owner,experimentation and innovation will profitably than ever before—whether the connectivity provider, the devicecontinue. But the analytic results are those consumer demands are for a print developer, and the consumer as willingnow sufficiently robust and compelling newspaper to read on the way into work participants for mutual benefit. Andto enable companies to press ahead into or a lifestyle magazine offering video on digital metrics will enable the valuethe new normal with confidence. their tablet. created to be distributed equitably on the basis of results achieved.…as the digital new normal …and as data-driven While the dynamics will be collabora-becomes clearer… collaboration gains tive within groupings, externally they momentum will be fiercely competitive. Over theThis is why we believe the industry is next five years, the key battleground forat the end of the beginning of its digital Two elements will underpin the capa- this competition will be the emergingjourney. There remains a lot more to be bilities needed for success in the new media hub. As companies identify anddone to adapt to the new world, but the normal. And each of those elements will target different roles in the hub, they’llfog is lifting. And digital’s move to the bring its own challenges. seek competitive differentiation in theircore of business as usual and into the target positions in the value chain. Aheart of E&M companies’ operations The first element is data, which is needed to create and apply understand- key determinant of that differentia-means execution and experimentation tion will be how well they understandare no longer sequential but will con- ing of consumers’ behaviors and moti- vations. The killer insights are there in changing behaviors among consum-tinue hand in hand. ers—including those who happen to big data—and companies are refiningSegments such as music and B2B are their ability to identify and isolate the work for them. Which comes downalready well along in their journeys of nuggets of little data that contains those partly to data and partly to the qualitydigital adaptation and implementation. insights. Here the main challenge is of their leadership.Others are at different stages. But as the the privacy agenda, wherein compa- For the E&M industry, the new normallandscape becomes clearer and firmer nies must move away from owning is here, making an unprecedented poolunderfoot, it’s increasingly evident the customer to putting the customer of value available to those who want tothat old and new media, or analog in control. compete for it. It’s time to look beyondand digital formats, are not mutually the uncertainty of recent years—andexclusive. The keys in areas from The second element is collaboration. The immersive media experience of to focus on pinpointing and executingpricing to delivery models and from strategies and models to claim acollaboration to consumer privacy are the future cannot be delivered by one single provider. A wide range of par- sustainable and rising share of theflexibility and inclusivity. resulting revenues. ties—including device manufacturers, network providers, and E&M companies (sometimes competitors)—will be criti- cal. The challenge here will be cultural and competitive: building the ability to trust collaborative partners, including competitors, while avoiding collusion. Industry overview | The end of the digital beginning 45
  • Build personalized data sets online by segment, component,and territory, and export to Excel and PDFVisit theonline Outlook Twelve-month access available for individual and corporate subscribers. www.pwc.com/outlook
  • Summaries by segment and region Global industry summary 48 Global market by segment 57 Global market by region 63
  • Global industry summaryIndustry size and expected growth advertising and will expand the market for distribution of E&M content to mobile devices. The number of mobile accessIn addition to the rebound in advertising, the ongoing shift subscribers rose 40 percent in 2011 to 1.2 billion. We expectto digital formats continued in 2011. Digital accounted for that figure to more than double during the next five years to28.0 percent of entertainment and media (E&M) spending 2.9 billion by 2016. That increase will significantly expandin 2011, up from 25.0 percent in 2010. Digital spending the potential market for mobile advertising and mobileincreased by 17.6 percent in 2011 compared with only a content. Growth in mobile access subscribers is driving0.6 percent increase in nondigital spending. We expect this demand for mobile apps. Around 30 billion mobile apps arepattern to continue, and we project digital’s share to rise to downloaded per month, most of which are free.37.5 percent by 2016. Global mobile Internet subscribers (millions)Digital share of global E&M spending (%) 3,50050 2,945 3,000 2,58140 36.1 37.5 2,500 2,217 32.6 34.2 30.3 1,879 28.0 2,00030 25.0 1,488 23.0 1,500 1,156 20.220 17.5 1,000 826 558 500 237 35110 0 0 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Sources: PricewaterhouseCoopers LLP, Wilkofsky Gruen AssociatesNote: Digital spending consists of broadband and mobile Internet access; onlineand mobile Internet advertising; mobile TV subscriptions; digital music; electronichome video; online and wireless video games; digital consumer magazine The expected regional growth rankings for 2012 will extendcirculation spending; digital newspaper circulation spending; digital trade magazine throughout the entire forecast period. Latin America willcirculation spending; electronic consumer, educational, and professional books; be the fastest-growing region, with a projected 9.7 percentand satellite radio subscriptions.Sources: PricewaterhouseCoopers LLP, Wilkofsky Gruen Associates compound annual increase to $134 billion in 2016 from $84 billion in 2011. Asia Pacific will be next, at 7.1 percent compounded annually from $462 billion in 2011 toNondigital spending will benefit from improved economic $651 billion in 2016. North America will increase at aconditions, but growth will remain modest, as most of the 5.3 percent compound annual rate to $658 billion in 2016gain in E&M spending will be generated by digital. During from $508 billion in 2011. EMEA (Europe, Middle East,the next five years, digital spending will increase at a Africa) will be the slowest-growing region, at 4.3 percentprojected 12.1 percent compound annual rate compared compounded annually and the only region where averagewith 2.8 percent compound annual growth for nondigital growth during the next five years will be less than thespending. Although accounting for 28.0 percent of the increase in 2011. Spending in EMEA, the largest region, willmarket in 2011, digital will generate 67.0 percent of total rise from $550 billion in 2011 to $678 billion in 2016. GlobalE&M spending growth during the next five years. E&M spending will increase from $1.6 trillion in 2011 toMobile Internet access growth will be an important driver $2.1 trillion in 2016, a 5.7 percent compound annual advance.of E&M digital spending. In addition to boosting mobileaccess spending, growth in mobile access will drive mobile48 PwC | Global entertainment and media outlook: 2012–2016
  • Global entertainment and media market by region (US$ millions) 2012–16Region 2007 2008 2009 2010 2011p 2012 2013 2014 2015 2016 CAGRNorth America 518,109 512,322 480,399 491,896 508,029 536,741 558,266 589,883 618,895 657,853  % Change 3.3 –1.1 –6.2 2.4 3.3 5.7 4.0 5.7 4.9 6.3 5.3EMEA 508,120 522,494 506,459 522,828 549,867 569,277 592,340 617,831 646,402 677,747  % Change 7.2 2.8 –3.1 3.2 5.2 3.5 4.1 4.3 4.6 4.8 4.3Asia Pacific 378,450 402,883 410,138 438,351 462,232 492,655 529,513 567,526 608,128 650,522  % Change 9.0 6.5 1.8 6.9 5.4 6.6 7.5 7.2 7.2 7.0 7.1Latin America 56,874 63,559 67,456 77,122 84,455 92,198 101,474 114,683 120,780 133,948  % Change 12.5 11.8 6.1 14.3 9.5 9.2 10.1 13.0 5.3 10.9 9.7Total 1,461,553 1,501,258 1,464,452 1,530,197 1,604,583 1,690,871 1,781,593 1,889,923 1,994,205 2,120,070  % Change 6.4 2.7 –2.5 4.5 4.9 5.4 5.4 6.1 5.5 6.3 5.7Sources: PricewaterhouseCoopers LLP, Wilkofsky Gruen AssociatesThere were 13 countries in 2011 with E&M spending above with projected compound annual increases of 12.0 percent$25 billion, led by the United States at $464 billion, Japan and 10.6 percent, respectively. Brazil overtook South Koreaat $193 billion, the PRC at $109 billion, and Germany at in 2011 to move into ninth place and during the next five$99 billion. The PRC passed Germany in 2011 to become years will pass Canada and Italy to become the seventh-the third-largest E&M market in the world. Of the leading largest market.countries, the PRC and Brazil will be the fastest growing,Entertainment and media market by country (US$ millions) 2012–16Country 2007 2008 2009 2010 2011p 2012 2013 2014 2015 2016 CAGRUnited States 479,710 472,278 440,895 450,095 463,863 489,873 508,416 536,667 562,199 597,279 5.2Japan 195,808 200,147 193,627 195,667 192,796 198,938 204,913 210,424 215,876 221,630 2.8China 63,667 73,845 81,194 95,702 109,059 120,948 137,458 154,940 173,449 192,516 12.0Germany 95,835 96,842 94,975 97,183 99,342 101,857 104,789 107,441 110,242 113,433 2.7United Kingdom 82,675 84,019 80,709 82,278 83,367 85,225 87,472 90,139 93,563 97,332 3.1France 68,431 71,013 70,926 73,392 77,098 79,495 82,191 84,831 87,737 91,063 3.4Italy 46,160 46,422 44,222 45,402 46,099 47,024 47,864 49,577 51,485 53,688 3.1Canada 38,399 40,044 39,504 41,801 44,166 46,868 49,850 53,216 56,696 60,574 6.5Brazil 25,055 28,032 30,125 35,379 39,168 43,307 48,255 55,519 57,781 64,823 10.6South Korea 31,050 33,088 34,265 36,289 38,562 40,191 41,926 43,644 45,497 47,455 4.2Australia 29,954 32,903 32,803 34,264 35,021 37,003 39,162 40,925 43,078 45,029 5.2Spain 32,826 32,444 29,380 28,702 29,412 29,580 30,332 31,071 32,072 33,227 2.5Middle East/North Africa (MENA)† 11,515 14,050 15,096 17,300 25,412 28,516 31,698 34,983 39,064 43,622 11.4†Comprises Algeria, Bahrain, Egypt, Jordan, Kuwait, Lebanon, Libya, Morocco, Oman, Qatar, Saudi Arabia, Syria, and the United Arab Emirates.Sources: PricewaterhouseCoopers LLP, Wilkofsky Gruen Associates Industry overview | Global industry summary 49
  • Internet access The Internet access market rose by 15.1 percent in 2011, fueled by a jump in mobile access penetration and theInternet access, whether wired or via mobile, is not an continued expansion of wired broadband. The number ofentertainment and media segment in itself but is (1) a fee mobile access subscribers will more than double during theto access content and (2) a key driver of entertainment and next five years, and the wired broadband household base willmedia spending in most segments. Figures do not include increase by more than 50 percent. Spending will rise frompurchasing E&M content such as music. Spending on E&M $317 billion in 2011 to $493 billion in 2016, a 9.3 percentcontent downloaded over the Internet or through mobile compound annual increase.devices is included in the respective entertainment andmedia segments.Global Internet access market: wired and mobile (US$ millions) 2012–16Segment 2007 2008 2009 2010 2011p 2012 2013 2014 2015 2016 CAGRInternet access:wired and mobile 203,818 228,750 250,530 275,472 316,972 351,006 386,855 419,838 456,109 493,390  % Change 16.8 12.2 9.5 10.0 15.1 10.7 10.2 8.5 8.6 8.2 9.3Sources: PricewaterhouseCoopers LLP, Wilkofsky Gruen AssociatesAsia Pacific has the largest Internet access market, at percentage increases in both wired broadband households$131 billion in 2011. The PRC has the largest wired broad- and in mobile Internet subscribers and will be the fastest-band market in the world in terms of subscribers, and Japan growing region in total Internet access spending, with aand South Korea have the largest mobile access markets. 16.1 percent compound annual increase. Long-Term-Nevertheless, penetration in the PRC and India is still Evolution (LTE) wireless network rollouts and increasedlow, and there is substantial room for growth. Asia Pacific wired broadband speeds at premium prices will contributewill expand at an 8.5 percent compound annual rate to to spending growth in each region.$197 billion in 2016. Latin America will have the largestGlobal Internet access spending by region: wired and mobile (US$ millions) 2012–16Region 2007 2008 2009 2010 2011p 2012 2013 2014 2015 2016 CAGRNorth America 38,927 42,076 45,400 49,298 58,941 66,583 72,913 79,173 85,683 92,997  % Change 14.4 8.1 7.9 8.6 19.6 13.0 9.5 8.6 8.2 8.5 9.5EMEA 67,749 76,361 83,179 90,455 111,000 122,237 133,979 144,651 156,977 169,335  % Change 16.3 12.7 8.9 8.7 22.7 10.1 9.6 8.0 8.5 7.9 8.8Asia Pacific 89,935 101,264 110,975 122,200 130,835 142,783 156,636 169,150 182,863 196,930  % Change 17.1 12.6 9.6 10.1 7.1 9.1 9.7 8.0 8.1 7.7 8.5Latin America 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 16.1Total 203,818 228,750 250,530 275,472 316,972 351,006 386,855 419,838 456,109 493,390  % Change 16.8 12.2 9.5 10.0 15.1 10.7 10.2 8.5 8.6 8.2 9.3Sources: PricewaterhouseCoopers LLP, Wilkofsky Gruen Associates50 PwC | Global entertainment and media outlook: 2012–2016
  • On the strength of its large mobile access market, Japan is with Internet access spending of more than $5 billion inthe leading country in overall Internet access spending, at 2011. Of the leading countries, Brazil will be the fastest$65 billion, well ahead of the United States at $52 billion. growing, with a projected 16.4 percent compound annualThe PRC, which had the largest number of broadband increase, followed by Middle East/North Africa (MENA)households and mobile Internet subscribers in absolute at 14.5 percent, the PRC at 12.1 percent, and Canada atterms, was next, at $24 billion. There were 13 countries 11.8 percent.Leading Internet access markets (US$ millions) 2012–16Country 2007 2008 2009 2010 2011p 2012 2013 2014 2015 2016 CAGRJapan 54,471 59,626 62,576 65,037 65,232 69,000 72,850 75,331 77,734 80,045 4.2United States 35,167 37,845 40,577 43,706 52,369 59,123 64,567 69,855 75,330 81,527 9.3China 11,562 13,855 16,288 20,697 24,059 27,486 31,497 35,147 38,927 42,633 12.1Middle East/North Africa (MENA)† 3,111 4,508 6,421 8,309 16,901 19,765 22,619 25,498 29,119 33,189 14.5South Korea 11,759 12,718 13,485 14,307 15,099 15,479 15,895 16,189 16,485 16,762 2.1France 9,651 11,502 12,405 13,233 14,142 15,202 16,348 17,317 18,447 19,472 6.6Germany 11,660 12,187 12,654 13,135 14,059 14,961 15,999 16,559 17,200 17,916 5.0United Kingdom 8,957 10,432 10,921 11,216 11,916 12,856 13,907 14,640 15,530 16,250 6.4Italy 7,144 7,584 8,135 8,802 10,084 10,924 11,340 12,130 13,137 14,178 7.1Brazil 3,503 4,229 5,060 6,205 7,608 9,346 11,576 13,255 14,810 16,228 16.4Spain 4,668 5,342 5,570 5,736 7,362 8,077 8,862 9,216 9,745 10,242 6.8Australia 4,006 5,175 5,460 5,766 6,626 7,285 8,121 8,783 9,759 10,479 9.6Canada 3,760 4,231 4,823 5,592 6,572 7,460 8,346 9,318 10,353 11,470 11.8†Comprises Algeria, Bahrain, Egypt, Jordan, Kuwait, Lebanon, Libya, Morocco, Oman, Qatar, Saudi Arabia, Syria, and the United Arab Emirates.Sources: PricewaterhouseCoopers LLP, Wilkofsky Gruen AssociatesAdvertising 6.6 percent compounded annually through 2016; out- of-home advertising will grow at a projected 5.0 percentAdvertising expanded during the past two years but in 2011 compound annual rate; and radio will grow at a rate ofstill remained lower than in 2007. Spending rose 3.6 percent in 3.8 percent compounded annually. Other than video games2011, led by an 18.7 percent increase in Internet advertising. and cinema advertising (the two smallest segments),A small video game advertising market rose 14.8 percent. increases in the print segments—newspapers, consumerNewspaper and directory advertising declined in 2011, and magazines, trade magazines, and directories—will averageconsumer magazine advertising edged up only 0.3 percent less than 3.5 percent compounded annually. The print mediaon the strength of a growing digital market that offset declines are experiencing declines in usage that are cutting into printin print. Trade magazine advertising rebounded with a advertising. While each of these segments has an expanding3.1 percent increase in 2011 after falling by a cumulative digital component, digital gains are only beginning to offset25.1 percent from 2007 to 2010. print declines. Overall global advertising will increase at aInternet advertising will be the fastest-growing category 6.4 percent compound annual rate from $486 billion in 2011during the next five years, with a 15.9 percent compound to $661 billion in 2016.annual increase. Television advertising will average Industry overview | Global industry summary 51
  • Global advertising by segment (US$ millions) 2012–16Segment 2007 2008 2009 2010 2011p 2012 2013 2014 2015 2016 CAGRInternet: wiredand mobile 52,119 61,661 63,901 75,594 89,766 105,411 123,511 143,285 164,908 188,069  % Change 32.5 18.3 3.6 18.3 18.7 17.4 17.2 16.0 15.1 14.0 15.9Television 171,271 173,158 160,561 179,479 185,005 196,507 203,833 224,710 231,555 254,745  % Change 3.2 1.1 –7.3 11.8 3.1 6.2 3.7 10.2 3.0 10.0 6.6Cinema 1,932 1,911 1,860 2,052 2,160 2,258 2,380 2,509 2,651 2,799  % Change 9.8 –1.1 –2.7 10.3 5.3 4.5 5.4 5.4 5.7 5.6 5.3Video games 1,066 1,403 1,628 1,902 2,183 2,492 2,800 3,103 3,414 3,715  % Change 55.2 31.6 16.0 16.8 14.8 14.2 12.4 10.8 10.0 8.8 11.2Consumer magazines 37,836 37,075 29,926 30,751 30,856 31,526 32,381 33,488 34,836 36,444  % Change 4.0 –2.0 –19.3 2.8 0.3 2.2 2.7 3.4 4.0 4.6 3.4Newspapers 119,756 110,562 91,653 92,211 91,098 91,012 92,108 93,658 95,927 98,765  % Change –0.8 –7.7 –17.1 0.6 –1.2 –0.1 1.2 1.7 2.4 3.0 1.6Radio 35,774 34,118 29,640 31,568 32,038 33,537 34,751 36,047 37,358 38,687  % Change 0.6 –4.6 –13.1 6.5 1.5 4.7 3.6 3.7 3.6 3.6 3.8Out-of-home 32,598 33,220 28,910 30,406 31,940 33,809 35,452 37,188 38,941 40,830  % Change 7.6 1.9 –13.0 5.2 5.0 5.9 4.9 4.9 4.7 4.9 5.0Directories 34,163 33,271 30,149 28,105 27,040 26,434 25,991 26,103 26,634 27,604  % Change 3.7 –2.6 –9.4 –6.8 –3.8 –2.2 –1.7 0.4 2.0 3.6 0.4Trade magazines 20,616 19,419 15,510 15,439 15,924 16,364 16,888 17,479 18,130 18,850  % Change 2.4 –5.8 –20.1 –0.5 3.1 2.8 3.2 3.5 3.7 4.0 3.4Total 495,358 491,050 438,251 468,744 485,697 512,920 538,999 581,012 611,723 660,879  % Change 4.2 –0.9 –10.8 7.0 3.6 5.6 5.1 7.8 5.3 8.0 6.4Note: Television, radio, newspaper, consumer magazine, trade magazine, and directory Web site and mobile advertising is included in the respective segments and in theInternet advertising segment but only once in the overall total.Sources: PricewaterhouseCoopers LLP, Wilkofsky Gruen AssociatesThere were 13 countries with advertising above $7 billion the fastest growing. The PRC will expand at a 14.6 percentin 2011. With the exception of Russia and Indonesia, the top compound annual rate, and Russia and Indonesia will each13 advertising markets were also the top 13 E&M markets. average 13.1 percent compounded annually, followed byAmong the top 13, the PRC, Russia, and Indonesia will be Brazil at 9.0 percent. Build personalized data sets by segment, component, and territory. Visit the online Outlook at www.pwc.com/outlook52 PwC | Global entertainment and media outlook: 2012–2016
  • Leading advertising markets (US$ millions) 2012–16Country 2007 2008 2009 2010 2011p 2012 2013 2014 2015 2016 CAGRUnited States 198,957 187,878 160,749 168,630 172,025 184,264 189,324 202,130 211,078 228,816 5.9Japan 57,962 55,923 49,489 49,439 48,751 50,293 51,505 53,342 55,024 56,961 3.2China 19,037 22,722 24,399 30,191 36,166 39,518 46,645 54,589 62,961 71,641 14.6Germany 23,858 23,803 21,604 22,569 23,258 23,853 24,434 25,054 25,631 26,314 2.5United Kingdom 23,715 23,020 20,329 21,720 22,119 22,808 23,485 24,616 26,056 27,776 4.7France 15,304 15,285 13,740 14,543 14,921 15,244 15,614 16,303 16,915 17,775 3.6Brazil 9,949 11,263 11,722 13,834 14,637 15,535 16,516 20,290 18,981 22,503 9.0Australia 13,582 14,085 12,964 13,915 13,317 13,589 14,016 14,316 14,612 14,971 2.4Italy 14,145 13,938 12,173 12,609 12,382 12,485 12,710 13,239 13,631 14,162 2.7Canada 11,208 11,686 10,718 11,667 12,248 12,978 13,700 14,589 15,374 16,290 5.9Russia 8,094 8,609 6,247 7,391 9,036 10,174 11,488 13,205 14,952 16,755 13.1Spain 11,381 10,255 8,187 8,191 7,826 7,641 7,797 8,198 8,566 9,020 2.9Indonesia 3,478 4,225 4,955 5,997 7,139 8,262 9,672 10,853 12,037 13,223 13.1Sources: PricewaterhouseCoopers LLP, Wilkofsky Gruen AssociatesLatin America and Asia Pacific will be the fastest-growing North America will expand at a 5.9 percent compoundregions during the next five years, with compound annual annual rate, and EMEA will average 4.6 percent com-gains of 9.0 percent and 8.1 percent, respectively. pounded annually.Global advertising by region (US$ millions) 2012–16Region 2007 2008 2009 2010 2011p 2012 2013 2014 2015 2016 CAGRNorth America 210,165 199,564 171,467 180,297 184,273 197,242 203,024 216,719 226,452 245,106  % Change 0.1 –5.0 –14.1 5.1 2.2 7.0 2.9 6.7 4.5 8.2 5.9EMEA 147,577 148,171 129,294 136,466 139,437 143,556 149,167 157,171 165,147 174,596  % Change 7.8 0.4 –12.7 5.5 2.2 3.0 3.9 5.4 5.1 5.7 4.6Asia Pacific 117,560 121,149 115,064 125,628 133,905 142,160 154,645 168,598 182,832 198,011  % Change 6.0 3.1 –5.0 9.2 6.6 6.2 8.8 9.0 8.4 8.3 8.1Latin America 20,056 22,166 22,426 26,353 28,082 29,962 32,163 38,524 37,292 43,166  % Change 12.2 10.5 1.2 17.5 6.6 6.7 7.3 19.8 –3.2 15.8 9.0Total 495,358 491,050 438,251 468,744 485,697 512,920 538,999 581,012 611,723 660,879  % Change 4.2 –0.9 –10.8 7.0 3.6 5.6 5.1 7.8 5.3 8.0 6.4Sources: PricewaterhouseCoopers LLP, Wilkofsky Gruen Associates Industry overview | Global industry summary 53
  • Advertising represents only a portion of overall spending on can more directly drive sales when economic conditions aremarketing. In addition to the media advertising segments tight. In the United States, advertising constituted 16.5 percentcovered in the Outlook, marketing consists of direct mail, of total marketing spending in 2011, down from 18.4 percentpoint-of-purchase displays, event marketing, games, contests, in 2007. As economic conditions improve, companies will putsweepstakes, coupons, incentives, sponsorships, in-store more resources into brand advertising, and advertising’s shareservices, tie-ins, sampling, licensing, and research. of the total marketing pie will begin to trend up. Advertising will constitute an estimated 17.1 percent of total marketingDuring downturns, companies often cut back on brand spending in 2016, a figure that will be enhanced by theadvertising more so than on promotion and coupons, which Summer Olympic Games and US-election-related advertising.Advertising and marketing in the United States (US$ billions) 2012–16United States 2007 2008 2009 2010 2011p 2012 2013 2014 2015 2016 CAGRTotal marketing 1,080 1,065 975 1,015 1,040 1,100 1,130 1,200 1,250 1,340  % Change   –1.4 –8.5 4.1 2.5 5.8 2.7 6.2 4.2 7.2 5.2Advertising 199 188 161 169 172 184 189 202 211 229  % Change   –5.5 –14.4 5.0 1.8 7.0 2.7 6.9 4.5 8.5 5.9Advertising as a % oftotal marketing 18.4 17.7 16.5 16.7 16.5 16.7 16.7 16.8 16.9 17.1  Sources: PricewaterhouseCoopers LLP, Wilkofsky Gruen AssociatesConsumer/end-user spending We look for video games to rebound and become the fastest-growing segment during the next five years, withConsumer/end-user spending was the slowest-growing a 7.0 percent compound annual increase, followed by TVcategory in 2011, with a 2.0 percent increase. This category subscriptions and license fees at 6.2 percent compoundedis less sensitive to the economy than is advertising. It was annually. The remaining segments will grow at rates ofonly modestly affected during the recession in 2009, falling 4 percent or less, and consumer magazines will be lower injust 0.7 percent compared with the 10.8 percent decline 2016 than in 2011. The print segments will continue to bein advertising, and it benefited less from the economic weak, and the continued migration in filmed entertainmentimprovement than did advertising during the past two and music from higher-priced, physical to lower-priced,years. The slow-growing print segments account for a larger digital will limit growth. Overall spending will rise fromcomponent of consumer/end-user spending—47.6 percent $802 billion in 2011 to $966 billion in 2016, a 3.8 percentin 2011—than they do in advertising, where they constituted compound annual increase.34.0 percent of 2011 spending, which dampens growth.TV subscriptions and license fees was the fastest-growingcategory, with a 7.2 percent increase. No other segment grewas much as 2 percent in 2011, and consumer magazines andconsumer and educational books declined.54 PwC | Global entertainment and media outlook: 2012–2016
  • Global consumer/end-user spending by segment (US$ millions) 2012–16Segment 2007 2008 2009 2010 2011p 2012 2013 2014 2015 2016 CAGRTV subscriptionsand license fees 167,529 179,555 190,565 201,016 215,536 229,092 243,368 258,148 274,151 290,596  % Change 8.2 7.2 6.1 5.5 7.2 6.3 6.2 6.1 6.2 6.0 6.2Music 56,793 54,221 53,154 49,270 49,886 51,124 52,771 54,810 57,141 59,741  % Change –2.9 –4.5 –2.0 –7.3 1.3 2.5 3.2 3.9 4.3 4.6 3.7Filmed entertainment 80,326 80,108 81,499 82,845 83,273 85,619 88,344 91,142 94,063 96,858  % Change 1.9 –0.3 1.7 1.7 0.5 2.8 3.2 3.2 3.2 3.0 3.1Video games 43,383 52,619 53,573 55,557 56,540 59,857 63,406 68,140 73,464 79,261  % Change 25.5 21.3 1.8 3.7 1.8 5.9 5.9 7.5 7.8 7.9 7.0Consumer magazines 49,258 48,475 46,022 45,104 44,365 43,811 43,306 43,163 43,375 43,740  % Change 1.0 –1.6 –5.1 –2.0 –1.6 –1.2 –1.2 –0.3 0.5 0.8 –0.3Newspapers 76,161 77,436 76,675 76,880 76,870 77,541 78,445 79,606 80,979 82,459  % Change 3.5 1.7 –1.0 0.3 0.0 0.9 1.2 1.5 1.7 1.8 1.4Radio 13,770 14,379 14,671 14,974 15,217 16,064 16,533 16,864 17,200 17,557  % Change 7.0 4.4 2.0 2.1 1.6 5.6 2.9 2.0 2.0 2.1 2.9Consumer andeducational books 114,329 114,944 113,599 113,530 112,066 112,173 112,706 113,623 114,634 115,719  % Change 5.3 0.5 –1.2 –0.1 –1.3 0.1 0.5 0.8 0.9 0.9 0.6Business-to-business 160,828 159,721 145,913 146,805 148,161 151,664 156,860 163,577 171,366 179,870  % Change 5.4 –0.7 –8.6 0.6 0.9 2.4 3.4 4.3 4.8 5.0 4.0Total 762,377 781,458 775,671 785,981 801,914 826,945 855,739 889,073 926,373 965,801  % Change 5.4 2.5 –0.7 1.3 2.0 3.1 3.5 3.9 4.2 4.3 3.8Sources: PricewaterhouseCoopers LLP, Wilkofsky Gruen AssociatesLatin America and Asia Pacific will be the fastest-growing There were 15 countries with consumer/end-user spendingregions with respect to consumer/end-user spending, with above $10 billion in 2011. The United States was the leadingcompound annual increases of 7.1 percent and 5.3 percent, country, at $239 billion, with Japan next, at $79 billion,respectively. EMEA, which has the largest consumer/end- and Germany at $62 billion, followed by the UK and theuser market, at $299 billion in 2011, will be the slowest PRC, each at $49 billion, and France at $48 billion. Of thegrowing, averaging 2.2 percent compounded annually. North top countries, the PRC will be the fastest growing, with aAmerica will expand at a 3.8 percent compound annual rate. projected 9.9 percent compound annual increase, with India and Brazil next, each at 9.0 percent compounded annually. Industry overview | Global industry summary 55
  • Global consumer/end-user spending by region (US$ millions) 2012–16Region 2007 2008 2009 2010 2011p 2012 2013 2014 2015 2016 CAGRNorth America 269,017 270,682 263,532 262,301 264,815 272,916 282,329 293,991 306,760 319,750  % Change 4.4 0.6 –2.6 –0.5 1.0 3.1 3.4 4.1 4.3 4.2 3.8EMEA 292,794 297,962 293,986 295,907 299,430 303,484 309,194 316,009 324,278 333,816  % Change 5.1 1.8 –1.3 0.7 1.2 1.4 1.9 2.2 2.6 2.9 2.2Asia Pacific 170,955 180,470 184,099 190,523 197,492 207,712 218,232 229,778 242,433 255,581  % Change 7.1 5.6 2.0 3.5 3.7 5.2 5.1 5.3 5.5 5.4 5.3Latin America 29,611 32,344 34,054 37,250 40,177 42,833 45,984 49,295 52,902 56,654  % Change 8.6 9.2 5.3 9.4 7.9 6.6 7.4 7.2 7.3 7.1 7.1Total 762,377 781,458 775,671 785,981 801,914 826,945 855,739 889,073 926,373 965,801  % Change 5.4 2.5 –0.7 1.3 2.0 3.1 3.5 3.9 4.2 4.3 3.8Sources: PricewaterhouseCoopers LLP, Wilkofsky Gruen AssociatesLeading consumer/end-user markets (US$ millions) 2012–16Country 2007 2008 2009 2010 2011p 2012 2013 2014 2015 2016 CAGRUnited States 245,586 246,555 239,569 237,759 239,469 246,486 254,525 264,682 275,791 286,936 3.7Japan 83,375 84,598 81,562 81,191 78,813 79,645 80,558 81,751 83,118 84,624 1.4Germany 60,317 60,852 60,717 61,479 62,025 63,043 64,356 65,828 67,411 69,203 2.2United Kingdom 50,003 50,567 49,459 49,342 49,332 49,561 50,080 50,883 51,977 53,306 1.6China 33,068 37,268 40,507 44,814 48,834 53,944 59,316 65,204 71,561 78,242 9.9France 43,476 44,226 44,781 45,616 48,035 49,049 50,229 51,211 52,375 53,816 2.3Canada 23,431 24,127 23,963 24,542 25,346 26,430 27,804 29,309 30,969 32,814 5.3Italy 24,871 24,900 23,914 23,991 23,633 23,615 23,814 24,208 24,717 25,348 1.4South Korea 14,176 15,383 16,188 16,947 17,855 18,754 19,654 20,618 21,715 22,865 5.1Brazil 11,603 12,540 13,343 15,340 16,923 18,426 20,163 21,974 23,990 26,092 9.0Australia 12,366 13,643 14,379 14,583 15,078 16,129 17,025 17,826 18,707 19,579 5.4Spain 16,777 16,847 15,623 14,775 14,224 13,862 13,673 13,657 13,761 13,965 –0.4India 8,584 9,326 9,598 10,296 13,023 14,082 15,393 16,797 18,434 20,039 9.0Netherlands 11,568 11,807 11,681 11,789 12,046 12,221 12,501 12,837 13,252 13,743 2.7Russia 9,994 10,664 10,297 10,797 11,295 11,876 12,543 13,314 14,150 15,032 5.9Sources: PricewaterhouseCoopers LLP, Wilkofsky Gruen Associates56 PwC | Global entertainment and media outlook: 2012–2016
  • Global market by segment This section provides a snapshot of trends and forecasts for the 13 industry segments covered in the full Outlook along with selected data breakouts that highlight underlying trends and drivers. For each category and subcategory, as well as for supplemental categories not shown here, data on a country-by-country basis as well as a discussion of the key drivers can be found in the full Outlook.Global entertainment and media market by segment (US$ millions) 2012–16Segment 2007 2008 2009 2010 2011p 2012 2013 2014 2015 2016 CAGRInternet access:wired and mobile 203,818 228,750 250,530 275,472 316,972 351,006 386,855 419,838 456,109 493,390  % Change 16.8 12.2 9.5 10.0 15.1 10.7 10.2 8.5 8.6 8.2 9.3Internet advertising:wired and mobile 52,119 61,661 63,901 75,594 89,766 105,411 123,511 143,285 164,908 188,069  % Change 32.5 18.3 3.6 18.3 18.7 17.4 17.2 16.0 15.1 14.0 15.9TV subscriptionsand license fees 167,529 179,555 190,565 201,016 215,536 229,092 243,368 258,148 274,151 290,596  % Change 8.2 7.2 6.1 5.5 7.2 6.3 6.2 6.1 6.2 6.0 6.2TV advertising 171,271 173,158 160,561 179,479 185,005 196,507 203,833 224,710 231,555 254,745  % Change 3.2 1.1 –7.3 11.8 3.1 6.2 3.7 10.2 3.0 10.0 6.6Music 56,793 54,221 53,154 49,270 49,886 51,124 52,771 54,810 57,141 59,741  % Change –2.9 –4.5 –2.0 –7.3 1.3 2.5 3.2 3.9 4.3 4.6 3.7Filmed entertainment 82,258 82,019 83,359 84,897 85,433 87,877 90,724 93,651 96,714 99,657  % Change 2.0 –0.3 1.6 1.8 0.6 2.9 3.2 3.2 3.3 3.0 3.1Video games 44,449 54,022 55,201 57,459 58,723 62,349 66,206 71,243 76,878 82,976  % Change 26.1 21.5 2.2 4.1 2.2 6.2 6.2 7.6 7.9 7.9 7.2Consumer magazinepublishing 87,094 85,550 75,948 75,855 75,221 75,337 75,687 76,651 78,211 80,184  % Change 2.2 –1.8 –11.2 –0.1 –0.8 0.2 0.5 1.3 2.0 2.5 1.3Newspaper publishing 195,917 187,998 168,328 169,091 167,968 168,553 170,553 173,264 176,906 181,224  % Change 0.8 –4.0 –10.5 0.5 –0.7 0.3 1.2 1.6 2.1 2.4 1.5Radio 49,544 48,497 44,311 46,542 47,255 49,601 51,284 52,911 54,558 56,244  % Change 2.3 –2.1 –8.6 5.0 1.5 5.0 3.4 3.2 3.1 3.1 3.5Out-of-home 32,598 33,220 28,910 30,406 31,940 33,809 35,452 37,188 38,941 40,830  % Change 7.6 1.9 –13.0 5.2 5.0 5.9 4.9 4.9 4.7 4.9 5.0Consumer andeducational bookpublishing 114,329 114,944 113,599 113,530 112,066 112,173 112,706 113,623 114,634 115,719  % Change 5.3 0.5 –1.2 –0.1 –1.3 0.1 0.5 0.8 0.9 0.9 0.6Business-to-business 215,607 212,411 191,572 190,349 191,125 194,462 199,739 207,159 216,130 226,324  % Change 4.8 –1.5 –9.8 –0.6 0.4 1.7 2.7 3.7 4.3 4.7 3.4Total 1,461,553 1,501,258 1,464,452 1,530,197 1,604,583 1,690,871 1,781,593 1,889,923 1,994,205 2,120,070  % Change 6.4 2.7 –2.5 4.5 4.9 5.4 5.4 6.1 5.5 6.3 5.7Note: Television, radio, newspaper, consumer magazine, trade magazine, and directory Web site and mobile advertising is included in the respective segments and in theInternet advertising segment but only once in the overall total.Sources: PricewaterhouseCoopers LLP, Wilkofsky Gruen Associates Industry overview | Global market by segment 57
  • Internet access Internet advertisingFiber network rollouts and the extension of the broadband Broadband household growth will be the principal driverinfrastructure into underserved areas will drive broadband of wired Internet advertising. Paid search, a format notsubscriptions and fuel broadband spending, which we available in other media, will continue to attract spendingexpect will expand at an 8.2 percent compound annual to the Internet. Growing traffic on social networking sitesrate. Rising prices for premium services will further boost and increased time spent online are attracting advertisingaverage monthly spending in many countries. In the mobile and are fueling growth in banner/display and interactivemarket, the enormous popularity of smart devices is driving advertising. Online classified advertising will gain share frompenetration. Carriers are rolling out third-generation and the print media and will benefit from improving economicfourth-generation wireless networks to provide faster speeds conditions in certain countries. Faster broadband speedsand to accommodate surging data traffic. Wireless network and increased TV streaming from broadcasters and over-the-upgrades, enabled by improved wireless technologies and top providers will drive online video advertising. Growinghigh-bandwidth cell site backhaul, will sustain mobile access tablet and smartphone penetration and growth in the mobilegrowth. We project mobile access to increase at a 12.2 percent Internet access subscriber base will boost mobile advertising.compound annual rate. Factoring in steep declines in dial- Overall wired advertising will average 14.1 percent growthup, the overall access market will increase at a 9.3 percent compounded annually during the next five years. Mobilecompound annual rate to $493 billion in 2016. advertising delivered to mobile devices such as smartphones and tablets via formats designed for those devices willMobile is the dominant access technology in Asia Pacific, the increase at a 36.5 percent compound annual rate from aonly region where that is the case. India is relying on mobile small base. Total Internet advertising will reach $188 billionfor its broadband growth and will generate a 50.8 percent in 2016 from $90 billion in 2011, a 15.9 percent compoundcompound annual increase in mobile subscribers, leading to annual increase.a 34.3 percent compound annual increase in total Internetaccess spending and making India the fastest-growing country The PRC and South Africa will be the fastest-growingin the world. Latin America will have the fastest-growing countries during the next five years, with compound annualmobile access market of any region, with a 20.9 percent increases of 32.1 percent and 30.4 percent, respectively. Thecompounded annual increase, fueled by a 30.9 percent PRC will overtake Japan in 2013 to become the largest onlinecompound annual gain in mobile access subscribers. Globally, market in Asia Pacific and the second largest in the world,mobile access will nearly reach wired access spending during behind the United States.the next five years. Television subscriptions and license feesAsia Pacific Internet access spending (US$ millions) Double-digit gains in Asia Pacific and Latin America boosted overall spending by 7.2 percent in 2011. Continued expansion120,000 in the subscription household universe in those regions will110,000 drive subscription spending, which we project will grow by100,000 9.2 percent compounded annually in Latin America and 90,000 8.4 percent in Asia Pacific. Brazil will be the fastest-growing 80,000 country in Latin America, fueled principally by a large increase 70,000 in satellite households and the launch of Internet Protocol 60,000 television (IPTV). Growth in Asia Pacific will be driven by 50,000 large increases in satellite penetration in the PRC, India, 40,000 and Indonesia. In North America, by contrast, approaching 30,000 saturation and competition for over-the-top services will 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 limit growth, while TV subscription providers in EMEA face Wired competition from free digital terrestrial television (DTT). MobileSources: PricewaterhouseCoopers LLP, Wilkofsky Gruen Associates58 PwC | Global entertainment and media outlook: 2012–2016
  • The market in EMEA jumped 7.0 percent in 2011, the largest Musicincrease since 2007, boosted by a 23.3 percent increase inFrance, reflecting a 76 percent rise in the number of IPTV The overall music market—covering spending on live musichouseholds that contributed to an overall 31 percent increase and recorded music—rose 1.3 percent, the first gain in manyin the number of subscription households. France passed the years. While growth in the concert and music festival marketUK and Germany to become the largest market in EMEA in contributed to the increase, a critical factor was the slower2011 and the second-largest market in the world, behind the decline in recorded music.United States. There was a dramatic turnaround in recorded music spending in the United States in 2011. After falling at double-digit andTelevision advertising high-single-digit rates during the prior four years, spending on recorded music in the US dipped by only 0.6 percent in 2011.TV advertising rose 3.1 percent in 2011, a relatively healthy Spending on physical music had been falling at rates averagingincrease given the loss of advertising associated with the FIFA more than 20 percent annually from 2006 to 2010. In 2011,World Cup and Winter Olympics that had boosted spending the decrease dropped to only 7.7 percent. We believe there isin 2010. The overall television audience is growing, which a core market that prefers physical music and that that levelis helping television attract advertising. TV is benefiting is being approached. We expect other countries to experiencefrom share gains from the print media, whose readership slower declines in physical music.is declining. Catch-up services and over-the-top launchesare boosting online viewing of television content, which is Meanwhile, the digital market is benefiting from the adoptiondriving online TV advertising. Growing penetration by Web- of graduated-response programs that threaten infringersconnected TV sets in North America and EMEA is facilitating with loss of broadband access. Those programs have beenonline viewing on TV devices. Tablets are becoming popular effective in countries where they have been introduced. Newplatforms for television, and growing tablet penetration streaming services and smartphone and tablet penetrationwill expand mobile television usage and advertising. TV growth will help expand the digital market. Digital spendingviewership and hence advertising are also benefiting from will overtake physical spending in 2015 and will be 23.5 per-the trend to embrace social media through the second screen cent larger in 2016. Global spending on recorded music willexperience, which expands advertising potential. Global TV begin to increase in 2013. Ongoing growth in the concert andadvertising will rise from $185 billion in 2011 to $255 billion music festival market will boost overall music spending byin 2016, a 6.6 percent compound annual increase. 3.7 percent compounded annually to $60 billion in 2016 from $50 billion in 2011.TV advertising in Russia is booming, with a 20.2 percentincrease in 2011. Russia’s expanding economy will continue tofuel broadcast television advertising, although the elimination Global recorded music spending (US$ millions)of beer advertising on television in mid-2012 will be one ofthe factors leading to a slowdown in growth in 2012–13. 30,000Nevertheless, Russia will overtake the UK, Germany, Italy, andFrance to become the leading advertising market in EMEA 25,000in 2016. 20,000 15,000 10,000 5,000 0 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Physical Digital Sources: PricewaterhouseCoopers LLP, Wilkofsky Gruen Associates Industry overview | Global market by segment 59
  • Filmed entertainment Video gamesIn filmed entertainment, home video is shifting from physical We expect spending on online and wireless games to overtaketo digital. Digital spending will nearly double during the console and PC games in 2013, and by 2016 to be 36 percentnext five years, while physical spending will fall by nearly larger. Overall growth will average 7.2 percent compounded20 percent. At the box office, 3-D penetration is increasing, annually to $83 billion in 2016 from $59 billion in 2011.but 3-D by itself is not enough to attract customers to a poor Asia Pacific, with three of the top four video game marketsfeature. New multiplexes are driving admissions. In the PRC, in the world, is the largest region, at $24 billion in 2011, andit is expected that there will be 60,000 screens by 2016, more is projected to be the fastest-growing region during the nextthan six times the 2011 total, which will drive box office five years, increasing 10.3 percent on a compound annualspending in the PRC by more than 20 percent compounded basis to $40 billion in 2016. Online and wireless gamesannually during the next five years. Global box office constitute a larger share of total spending in Asia Pacific thanspending is projected to grow at a 6.3 percent compound in other regions and consequently have a greater influenceannual rate, while home video will be relatively flat, on growth. The PRC overtook South Korea in 2009 to becomeaveraging only 0.5 percent growth compounded annually. the second-largest market in that region and will pass JapanOverall spending will rise at a 3.1 percent compound annual in 2012 to become the leader in Asia Pacific and the secondrate to $100 billion by 2016 from $85 billion in 2011. largest in the world, behind the United States.Global home video spending (US$ millions) Video game spending (US$ millions)60,000 50,00050,000 40,00040,000 30,00030,000 20,00020,00010,000 10,000 0 0 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Physical Console/PC games Digital Online/wireless gamesSources: PricewaterhouseCoopers LLP, Wilkofsky Gruen Associates Sources: PricewaterhouseCoopers LLP, Wilkofsky Gruen Associates Create customized bar charts and line graphs instantly. Visit the online Outlook at www.pwc.com/outlook60 PwC | Global entertainment and media outlook: 2012–2016
  • Consumer magazine publishing On a regional basis, Latin America and Asia Pacific have the lowest broadband penetration rates and will experience theThe consumer magazine market declined during the past largest increases during the next five years, with compoundfour years, although annual decreases in 2010–11 were less annual increases averaging 5.5 percent and 3.6 percent,than 1 percent. We expect the market to begin to increase respectively. In North America, by contrast, we project ain 2012, but growth will be modest, averaging 1.3 percent 1.4 percent compound annual decline, while in EMEA, whichcompounded annually to $80 billion in 2016 from $75 billion has a stronger newspaper market than the United Statesin 2011. The market is particularly sensitive to the economy, has, growth will average 0.3 percent compounded annually.and EMEA’s weak near-term economic outlook will lead to Argentina, Indonesia, and India will have the fastest-growingongoing declines during the next two years and a flat market newspaper markets in the world during the next five years,overall for the forecast period. In Latin America, by contrast, with compound annual increases of 11.9 percent, 11.2 percent,an expanding economy will lead to a 5.3 percent compound and 9.6 percent, respectively.annual increase during the next five years. A digital circula-tion spending market began to develop in 2010 as tablets The global market as a whole will expand at a 1.5 percentemerge as platforms for magazines. We expect digital compound annual rate to $181 billion in 2016 from $168 bil-circulation spending to generate $2.9 billion by 2016; digital lion in 2011. The United States, Japan, the PRC, and Germanyadvertising will increase to $5.5 billion by 2016. The digital account for half of the global newspaper market.component will account for 10.4 percent of spending in 2016compared with 3.1 percent in 2011. Radio Radio advertising rose 1.5 percent in 2011, down from aDigital consumer magazine spending (US$ millions) 6.5 percent increase in 2010. We expect a steadier pattern going forward, with increases averaging 3.8 percent9,000 compounded annually. Satellite radio will boost spending in8,000 North America, while modest increases in public radio license7,000 fees will help maintain the radio markets in EMEA and Asia6,000 Pacific. The market as a whole will total $56 billion in 2016,5,000 growing at a 3.5 percent compound annual rate from4,000 $47 billion in 2011.3,000 We expect India to have the fastest-growing radio market2,000 in the world during the next five years, with a projected1,000 17.3 percent compound annual increase, the result of an 0 increase in the number of FM stations. The government is 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 expected to issue 800 new licenses across 300 towns. Digital circulation spending Digital advertising Out-of-home advertisingSources: PricewaterhouseCoopers LLP, Wilkofsky Gruen Associates Out-of-home advertising was one of the stronger categories in 2011, with a 5.0 percent increase. The industry is migrating from traditional to digital billboards, which expands the out-Newspaper publishing of-home inventory because multiple images can be projected on the same display. Improved measurement techniquesThe newspaper market is experiencing countervailing trends. that provide reach and frequency data comparable to theIn countries where a majority of households have broadband data of other media are helping the market, as is integrationconnections, newspapers face erosion in print unit circulation with mobile through location-based services. Out-of-homeas readers shift from print to online for information. That is beginning to be developed in several Latin Americanshift is cutting into both circulation spending and print countries as transit ads, street furniture, and digital networksadvertising. In countries where broadband penetration is are increasingly being used. We expect Latin America to havelow, there is less competition from the Internet, and unit the fastest-growing out-of-home market during the nextcirculation is rising, benefiting both circulation spending and five years, with a 7.6 percent compound annual increase.print advertising. Industry overview | Global market by segment 61
  • Indonesia, Russia, and India will have the fastest-growing out- Business-to-businessof-home markets during the next five years, with compoundannual increases averaging 11.2 percent, 11.0 percent, and Business-to-business includes business information, trade10.9 percent, respectively. We expect overall out-of-home magazines, trade shows, professional books, and directoryadvertising to expand at a 5.0 percent compound annual advertising. Spending rose by 0.4 percent in 2011 as gainsrate during the next five years to $41 billion in 2016 from in business information, trade magazines, and professional$32 billion in 2011. books offset declines in directories and trade shows. As in other segments, we expect the market to shift from physical platforms to digital platforms. The various digitalConsumer and educational book publishing components of the market will generate 10.7 percent of totalThe electronic consumer and educational book publishing spending in 2016 from 4.8 percent in 2011. Within the digitalmarket is surging, with a 64.9 percent increase in 2011. market, mobile usage is the main driver of spending. OverallGrowth in electronic books began to cut into print spending, spending will increase at a 3.4 percent compound annual ratewhich fell by 3.3 percent. We expect that trend to continue, to $226 billion in 2016 from $191 billion in 2011. Germanywith the electronic market nearly quadrupling during the next has the second-largest market in the world, at $19 billion,five years and print spending falling by nearly 11 percent. with the UK, Japan, and the PRC each at $11 billion, followedThe shift from higher-priced, print books to lower-priced, by France at $9 billion. The PRC will have the fastest-growingelectronic books will have an adverse impact on spending and market in the world during the next five years, with awill dampen overall spending growth in each region except projected 9.3 percent compound annual increase.Latin America, where electronic books do not yet constitutea significant factor. Electronic books will account for 17.9 per- Digital business-to-business spending (US$ millions)cent of spending in 2016 from 4.9 percent in 2011. We projecttotal spending to increase at a 0.6 percent compound annualrate to $116 billion in 2016 from $112 billion in 2011. The 30,000United States dominates the electronic book market, accoun- 25,000ting for 61 percent of global spending in 2011. 20,000Global electronic book sales (US$ millions) 15,000 10,00025,000 5,00020,000 0 2007 2008 2009 2010 2011 2012 2013 2014 2015 201615,000 Electronic professional books Digital trade magazine circulation10,000 Digital trade magazine advertising Digital directory advertising 5,000 0 Sources: PricewaterhouseCoopers LLP, Wilkofsky Gruen Associates 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Education ConsumerSources: PricewaterhouseCoopers LLP, Wilkofsky Gruen Associates62 PwC | Global entertainment and media outlook: 2012–2016
  • Global market by region In this section, we provide data on total entertainment and media spending by segment, total advertising spending, total consumer/ end-user spending, and total Internet access spending for each region. We also provide totals by country for each of those categories.North America compounded annually for Internet access, TV advertising, TV subscriptions and license fees, and out-of-home advertising.Spending rose by 3.3 percent in 2011, the largest increase Newspaper publishing will be lower in 2016 than in 2011.since 2007. With economic conditions improving, we lookfor faster growth during the next five years, averaging Canada will be the faster-growing country, with a projected5.3 percent compounded annually to $658 billion in 2016 6.5 percent compound annual increase compared withfrom $508 billion in 2011. We expect double-digit growth in 5.2 percent compound annual growth for the United States.Internet advertising and increases of 5 percent or more Industry overview | Global market by region 63
  • Entertainment and media market by segment (US$ millions) 2012–16North America 2007 2008 2009 2010 2011p 2012 2013 2014 2015 2016 CAGRInternet access:wired and mobile 38,927 42,076 45,400 49,298 58,941 66,583 72,913 79,173 85,683 92,997  % Change 14.4 8.1 7.9 8.6 19.6 13.0 9.5 8.6 8.2 8.5 9.5Internet advertising:wired and mobile 22,462 25,079 24,521 28,330 34,548 40,653 47,501 54,876 63,246 72,592  % Change 26.3 11.7 –2.2 15.5 21.9 17.7 16.8 15.5 15.3 14.8 16.0TV subscriptionsand license fees 68,785 72,466 75,080 77,234 80,249 84,571 89,144 94,566 100,414 106,359  % Change 6.2 5.4 3.6 2.9 3.9 5.4 5.4 6.1 6.2 5.9 5.8TV advertising 73,062 73,227 66,863 74,109 74,856 83,420 83,880 91,176 93,317 103,283  % Change –0.3 0.2 –8.7 10.8 1.0 11.4 0.6 8.7 2.3 10.7 6.6Music 19,777 18,291 17,879 16,009 16,528 17,247 18,103 19,101 20,241 21,473  % Change –3.8 –7.5 –2.3 –10.5 3.2 4.4 5.0 5.5 6.0 6.1 5.4Filmed entertainment 35,159 34,643 35,034 34,440 33,850 34,304 34,752 35,058 35,296 35,345  % Change 1.2 –1.5 1.1 –1.7 –1.7 1.3 1.3 0.9 0.7 0.1 0.9Video games 13,181 16,404 15,584 15,382 15,057 15,349 15,754 16,576 17,551 18,569  % Change 26.6 24.5 –5.0 –1.3 –2.1 1.9 2.6 5.2 5.9 5.8 4.3Consumer magazinepublishing 25,484 24,646 21,135 20,910 20,767 20,810 20,956 21,310 21,879 22,543  % Change 3.8 –3.3 –14.2 –1.1 –0.7 0.2 0.7 1.7 2.7 3.0 1.7Newspaper publishing 59,266 51,442 40,673 38,751 36,658 35,259 34,434 34,137 34,026 34,142  % Change –6.6 –13.2 –20.9 –4.7 –5.4 –3.8 –2.3 –0.9 –0.3 0.3 –1.4Radio 23,451 22,070 18,610 19,892 20,185 21,807 22,564 23,319 24,038 24,759  % Change 1.1 –5.9 –15.7 6.9 1.5 8.0 3.5 3.3 3.1 3.0 4.2Out-of-home 7,727 7,458 6,321 6,600 6,940 7,321 7,701 8,087 8,472 8,857  % Change 7.6 –3.5 –15.2 4.4 5.2 5.5 5.2 5.0 4.8 4.5 5.0Consumer andeducational bookpublishing 33,906 32,722 32,841 33,611 32,458 32,253 32,494 33,018 33,657 34,304  % Change 6.7 –3.5 0.4 2.3 –3.4 –0.6 0.7 1.6 1.9 1.9 1.1Business-to-business 104,166 100,385 88,987 87,344 88,801 91,101 94,352 98,463 102,994 107,955  % Change 3.1 –3.6 –11.4 –1.8 1.7 2.6 3.6 4.4 4.6 4.8 4.0Total 518,109 512,322 480,399 491,896 508,029 536,741 558,266 589,883 618,895 657,853  % Change 3.3 –1.1 –6.2 2.4 3.3 5.7 4.0 5.7 4.9 6.3 5.3Note: Television, radio, newspaper, consumer magazine, trade magazine, and directory Web site and mobile advertising is included in the respective segments and in theInternet advertising segment but only once in the overall total.Sources: PricewaterhouseCoopers LLP, Wilkofsky Gruen Associates64 PwC | Global entertainment and media outlook: 2012–2016
  • Entertainment and media market by country (US$ millions) 2012–16North America 2007 2008 2009 2010 2011p 2012 2013 2014 2015 2016 CAGRUnited States 479,710 472,278 440,895 450,095 463,863 489,873 508,416 536,667 562,199 597,279 5.2Canada 38,399 40,044 39,504 41,801 44,166 46,868 49,850 53,216 56,696 60,574 6.5Total 518,109 512,322 480,399 491,896 508,029 536,741 558,266 589,883 618,895 657,853 5.3Sources: PricewaterhouseCoopers LLP, Wilkofsky Gruen AssociatesInternet access Canada will increase at an 11.8 percent compound annual rate during the next five years compared with 9.3 percentInternet access spending rose by 19.6 percent in 2011. We compound annual growth for the United States.expect a 13.0 percent increase in 2012 followed by high-single-digit gains as the broadband market matures. For theforecast period as a whole, spending will rise from $59 billionin 2011 to $93 billion in 2016, a 9.5 percent compoundannual increase.Internet access market: wired and mobile (US$ millions) 2012–16North America 2007 2008 2009 2010 2011p 2012 2013 2014 2015 2016 CAGRInternet access:wired and mobile 38,927 42,076 45,400 49,298 58,941 66,583 72,913 79,173 85,683 92,997  % Change 14.4 8.1 7.9 8.6 19.6 13.0 9.5 8.6 8.2 8.5 9.5Sources: PricewaterhouseCoopers LLP, Wilkofsky Gruen AssociatesInternet access market: wired and mobile by country (US$ millions) 2012–16North America 2007 2008 2009 2010 2011p 2012 2013 2014 2015 2016 CAGRUnited States 35,167 37,845 40,577 43,706 52,369 59,123 64,567 69,855 75,330 81,527 9.3Canada 3,760 4,231 4,823 5,592 6,572 7,460 8,346 9,318 10,353 11,470 11.8Total 38,927 42,076 45,400 49,298 58,941 66,583 72,913 79,173 85,683 92,997 9.5Sources: PricewaterhouseCoopers LLP, Wilkofsky Gruen Associates Export your own data selections to Excel and PDF. Visit the online Outlook at www.pwc.com/outlook Industry overview | Global market by region 65
  • Advertising Advertising in the United States increased 2.0 percent in 2011 compared with 5.0 percent growth in Canada. During theAdvertising rose by 2.2 percent in 2011, the second consecu- next five years, we expect advertising in the United States totive increase following an 18.4 percent decrease from 2007 increase at a 5.9 percent compound annual rate, enhanced byto 2009. During the next five years, Internet advertising Olympic Games advertising and political advertising in 2016.will average 16.0 percent growth compounded annually. We also project a 5.9 percent compound annual increase inThe small, video game segment will grow at an 11.2 percent Canada through 2016.compound annual rate. Television will increase by 6.6 percentcompounded annually, and out-of-home will expand at a5.0 percent compound annual rate. The remaining segmentswill grow at compound annual rates of less than 5 percent,and newspaper advertising will decline. Overall advertisingwill increase at a 5.9 percent compound annual rate from$184 billion in 2011 to $245 billion in 2016.Advertising by segment (US$ millions) 2012–16North America 2007 2008 2009 2010 2011p 2012 2013 2014 2015 2016 CAGRInternet: wiredand mobile 22,462 25,079 24,521 28,330 34,548 40,653 47,501 54,876 63,246 72,592  % Change 26.3 11.7 –2.2 15.5 21.9 17.7 16.8 15.5 15.3 14.8 16.0Television 73,062 73,227 66,863 74,109 74,856 83,420 83,880 91,176 93,317 103,283  % Change –0.3 0.2 –8.7 10.8 1.0 11.4 0.6 8.7 2.3 10.7 6.6Cinema 540 571 584 658 675 710 750 780 810 840  % Change 18.4 5.7 2.3 12.7 2.6 5.2 5.6 4.0 3.8 3.7 4.5Video games 592 774 897 1,035 1,177 1,328 1,493 1,653 1,828 2,004  % Change 67.2 30.7 15.9 15.4 13.7 12.8 12.4 10.7 10.6 9.6 11.2Consumer magazines 14,942 14,294 11,543 11,940 12,094 12,355 12,694 13,113 13,625 14,232  % Change 6.3 –4.3 –19.2 3.4 1.3 2.2 2.7 3.3 3.9 4.5 3.3Newspapers 48,132 40,565 29,832 28,211 26,272 24,975 24,185 23,902 23,771 23,855  % Change –7.5 –15.7 –26.5 –5.4 –6.9 –4.9 –3.2 –1.2 –0.5 0.4 –1.9Radio 21,435 19,630 16,131 17,275 17,351 18,210 18,734 19,256 19,771 20,288  % Change –1.8 –8.4 –17.8 7.1 0.4 5.0 2.9 2.8 2.7 2.6 3.2Out-of-home 7,727 7,458 6,321 6,600 6,940 7,321 7,701 8,087 8,472 8,857  % Change 7.6 –3.5 –15.2 4.4 5.2 5.5 5.2 5.0 4.8 4.5 5.0Directories 16,476 15,559 14,484 13,293 12,779 12,452 12,231 12,325 12,636 13,211  % Change 1.7 –5.6 –6.9 –8.2 –3.9 –2.6 –1.8 0.8 2.5 4.6 0.7Trade magazines 12,041 10,994 8,820 8,860 9,390 9,755 10,137 10,528 10,895 11,269  % Change 1.7 –8.7 –19.8 0.5 6.0 3.9 3.9 3.9 3.5 3.4 3.7Total 210,165 199,564 171,467 180,297 184,273 197,242 203,024 216,719 226,452 245,106  % Change 0.1 –5.0 –14.1 5.1 2.2 7.0 2.9 6.7 4.5 8.2 5.9Note: Television, radio, newspaper, consumer magazine, trade magazine, and directory Web site and mobile advertising is included in the respective segments and in theInternet advertising segment but only once in the overall total.Sources: PricewaterhouseCoopers LLP, Wilkofsky Gruen Associates66 PwC | Global entertainment and media outlook: 2012–2016
  • Advertising by country (US$ millions)  2012–16North America 2007 2008 2009 2010 2011p 2012 2013 2014 2015 2016 CAGRUnited States 198,957 187,878 160,749 168,630 172,025 184,264 189,324 202,130 211,078 228,816 5.9Canada 11,208 11,686 10,718 11,667 12,248 12,978 13,700 14,589 15,374 16,290 5.9Total 210,165 199,564 171,467 180,297 184,273 197,242 203,024 216,719 226,452 245,106 5.9Sources: PricewaterhouseCoopers LLP, Wilkofsky Gruen AssociatesConsumer/end-user spending expanding satellite radio market. TV subscriptions will grow at a 5.8 percent compound annual rate, with music next, atConsumer/end-user spending edged up 1.0 percent in 2011 5.4 percent compounded annually, followed by business-after falling 3.1 percent from 2008 to 2010. Gains in radio, to-business at 4.6 percent compounded annually and videomusic, TV subscriptions and license fees, and business- games at 3.6 percent compounded annually. Consumer andto-business offset declines in filmed entertainment, video educational books will grow by 1.1 percent on a compoundgames, and the three publishing segments. We expect annual basis, with filmed entertainment edging up 0.8 per-growth in excess of 3 percent annually in 2012–13 followed cent compounded annually. Consumer magazines andby gains in excess of 4 percent annually during 2014–16. newspapers will be lower in 2016 than in 2011.Total spending will rise at a 3.8 percent compound annualrate from $265 billion in 2011 to $320 billion in 2016. Radio The United States will increase at a 3.7 percent compoundwill be the fastest-growing component, with a 9.5 per- annual rate, and Canada will grow by 5.3 percentcent compound annual advance, boosted by a small but compounded annually. Industry overview | Global market by region 67
  • Consumer/end-user spending by segment (US$ millions) 2012–16North America 2007 2008 2009 2010 2011p 2012 2013 2014 2015 2016 CAGRTV subscriptionsand license fees 68,785 72,466 75,080 77,234 80,249 84,571 89,144 94,566 100,414 106,359  % Change 6.2 5.4 3.6 2.9 3.9 5.4 5.4 6.1 6.2 5.9 5.8Music 19,777 18,291 17,879 16,009 16,528 17,247 18,103 19,101 20,241 21,473  % Change –3.8 –7.5 –2.3 –10.5 3.2 4.4 5.0 5.5 6.0 6.1 5.4Filmed entertainment 34,619 34,072 34,450 33,782 33,175 33,594 34,002 34,278 34,486 34,505  % Change 0.9 –1.6 1.1 –1.9 –1.8 1.3 1.2 0.8 0.6 0.1 0.8Video games 12,589 15,630 14,687 14,347 13,880 14,021 14,261 14,923 15,723 16,565  % Change 25.1 24.2 –6.0 –2.3 –3.3 1.0 1.7 4.6 5.4 5.4 3.6Consumer magazines 10,542 10,352 9,592 8,970 8,673 8,455 8,262 8,197 8,254 8,311  % Change 0.5 –1.8 –7.3 –6.5 –3.3 –2.5 –2.3 –0.8 0.7 0.7 –0.8Newspapers 11,134 10,877 10,841 10,540 10,386 10,284 10,249 10,235 10,255 10,287  % Change –2.4 –2.3 –0.3 –2.8 –1.5 –1.0 –0.3 –0.1 0.2 0.3 –0.2Radio 2,016 2,440 2,479 2,617 2,834 3,597 3,830 4,063 4,267 4,471  % Change 48.2 21.0 1.6 5.6 8.3 26.9 6.5 6.1 5.0 4.8 9.5Consumer andeducational books 33,906 32,722 32,841 33,611 32,458 32,253 32,494 33,018 33,657 34,304  % Change 6.7 –3.5 0.4 2.3 –3.4 –0.6 0.7 1.6 1.9 1.9 1.1Business-to-business 75,649 73,832 65,683 65,191 66,632 68,894 71,984 75,610 79,463 83,475  % Change 3.7 –2.4 –11.0 –0.7 2.2 3.4 4.5 5.0 5.1 5.0 4.6Total 269,017 270,682 263,532 262,301 264,815 272,916 282,329 293,991 306,760 319,750  % Change 4.4 0.6 –2.6 –0.5 1.0 3.1 3.4 4.1 4.3 4.2 3.8Sources: PricewaterhouseCoopers LLP, Wilkofsky Gruen AssociatesConsumer/end-user spending (excluding Internet access) by country (US$ millions) 2012–16North America 2007 2008 2009 2010 2011p 2012 2013 2014 2015 2016 CAGRUnited States 245,586 246,555 239,569 237,759 239,469 246,486 254,525 264,682 275,791 286,936 3.7Canada 23,431 24,127 23,963 24,542 25,346 26,430 27,804 29,309 30,969 32,814 5.3Total 269,017 270,682 263,532 262,301 264,815 272,916 282,329 293,991 306,760 319,750 3.8Sources: PricewaterhouseCoopers LLP, Wilkofsky Gruen Associates 68 PwC | Global entertainment and media outlook: 2012–2016
  • Europe, Middle East, Africa (EMEA) Germany has the largest E&M market in EMEA, at $99 billion in 2011, with the UK next at $83 billion. France at $77 billionEntertainment and media spending rose by 5.2 percent in was the only other country above $50 billion in 2011. Led by2011, the largest increase since 2007. Spending will rise to Middle East/North Africa (MENA) and South Africa, Middle$678 billion in 2016, a 4.3 percent compound annual increase East/Africa will be the fastest-growing area in EMEA, with afrom $550 billion in 2011. Internet advertising and Internet 10.6 percent compound annual increase. Central and Easternaccess spending will be the fastest-growing segments, with Europe will expand at an 8.1 percent compound annualcompound annual increases of 13.0 percent and 8.8 percent, rate, and Western Europe will average 3.1 percent growthrespectively. TV advertising, video games, TV subscriptions compounded annually.and license fees, and out-of-home advertising will each growat rates averaging more than 4 percent on a compoundannual basis, with music and filmed entertainment next, at3.0 percent and 2.6 percent, respectively. The remaining seg-ments will grow at annual rates averaging less than 2 percent. Industry overview | Global market by region 69
  • Entertainment and media market by segment (US$ millions) 2012–16EMEA 2007 2008 2009 2010 2011p 2012 2013 2014 2015 2016 CAGRInternet access:wired and mobile 67,749 76,361 83,179 90,455 111,000 122,237 133,979 144,651 156,977 169,335  % Change 16.3 12.7 8.9 8.7 22.7 10.1 9.6 8.0 8.5 7.9 8.8Internet advertising:wired and mobile 16,549 19,979 21,292 24,734 28,576 32,304 36,598 41,582 46,988 52,656  % Change 40.2 20.7 6.6 16.2 15.5 13.0 13.3 13.6 13.0 12.1 13.0TV subscriptionsand license fees 61,061 64,880 68,257 71,381 76,400 80,241 84,105 87,378 90,891 94,812  % Change 8.6 6.3 5.2 4.6 7.0 5.0 4.8 3.9 4.0 4.3 4.4TV advertising 44,849 44,745 39,537 43,572 44,815 46,258 47,896 51,166 53,529 56,786  % Change 6.9 –0.2 –11.6 10.2 2.9 3.2 3.5 6.8 4.6 6.1 4.8Music 23,544 22,698 22,407 20,925 21,062 21,441 22,018 22,734 23,527 24,409  % Change –3.8 –3.6 –1.3 –6.6 0.7 1.8 2.7 3.3 3.5 3.7 3.0Filmed entertainment 25,471 25,220 25,435 26,025 25,995 26,154 26,689 27,502 28,485 29,543  % Change 0.7 –1.0 0.9 2.3 –0.1 0.6 2.0 3.0 3.6 3.7 2.6Video games 15,087 17,796 17,445 17,736 18,008 18,586 19,261 20,275 21,460 22,760  % Change 23.5 18.0 –2.0 1.7 1.5 3.2 3.6 5.3 5.8 6.1 4.8Consumer magazinepublishing 37,847 37,245 33,168 33,052 32,615 32,219 32,042 32,090 32,288 32,641  % Change 2.1 –1.6 –10.9 –0.3 –1.3 –1.2 –0.5 0.1 0.6 1.1 0.0Newspaper publishing 69,160 67,636 61,388 61,752 60,222 59,657 59,736 59,805 60,392 61,252  % Change 5.1 –2.2 –9.2 0.6 –2.5 –0.9 0.1 0.1 1.0 1.4 0.3Radio 16,564 16,555 15,945 16,314 16,394 16,619 17,031 17,333 17,657 18,002  % Change 3.6 –0.1 –3.7 2.3 0.5 1.4 2.5 1.8 1.9 2.0 1.9Out-of-home 10,576 10,714 8,908 9,419 9,744 10,204 10,628 11,076 11,506 11,979  % Change 7.5 1.3 –16.9 5.7 3.5 4.7 4.2 4.2 3.9 4.1 4.2Consumer andeducational bookpublishing 47,155 47,252 46,080 45,264 44,770 44,454 44,367 44,435 44,594 44,810  % Change 2.6 0.2 –2.5 –1.8 –1.1 –0.7 –0.2 0.2 0.4 0.5 0.0Business-to-business 75,399 75,173 67,524 67,421 66,541 66,328 66,641 67,885 69,884 72,393  % Change 6.2 –0.3 –10.2 –0.2 –1.3 –0.3 0.5 1.9 2.9 3.6 1.7Total 508,120 522,494 506,459 522,828 549,867 569,277 592,340 617,831 646,402 677,747  % Change 7.2 2.8 –3.1 3.2 5.2 3.5 4.1 4.3 4.6 4.8 4.3Note: Television, newspaper, consumer magazine, trade magazine, and directory Web site and mobile advertising is included in the respective segments and in the Internetadvertising segment but only once in the overall total.Sources: PricewaterhouseCoopers LLP, Wilkofsky Gruen Associates70 PwC | Global entertainment and media outlook: 2012–2016
  • Entertainment and media market by country (US$ millions) 2012–16EMEA 2007 2008 2009 2010 2011p 2012 2013 2014 2015 2016 CAGRWestern Europe                      Austria 11,201 11,538 11,374 11,621 11,941 12,299 12,683 13,107 13,571 14,113 3.4Belgium 11,437 11,815 11,429 11,808 12,109 12,407 12,856 13,431 13,945 14,498 3.7Denmark 9,785 9,893 9,663 9,801 9,945 10,169 10,428 10,705 10,989 11,272 2.5Finland 6,599 6,729 6,448 6,604 6,864 7,084 7,345 7,653 7,998 8,379 4.1France 68,431 71,013 70,926 73,392 77,098 79,495 82,191 84,831 87,737 91,063 3.4Germany 95,835 96,842 94,975 97,183 99,342 101,857 104,789 107,441 110,242 113,433 2.7Greece 6,511 6,712 6,409 6,083 5,610 5,466 5,517 5,649 5,856 6,087 1.6Ireland 5,272 5,206 5,056 4,944 4,863 4,874 5,016 5,179 5,367 5,568 2.7Italy 46,160 46,422 44,222 45,402 46,099 47,024 47,864 49,577 51,485 53,688 3.1Netherlands 19,893 20,283 19,433 19,858 20,766 21,287 21,843 22,598 23,417 24,456 3.3Norway 10,534 10,784 10,420 10,628 10,961 11,270 11,643 12,096 12,596 13,160 3.7Portugal 5,240 5,340 5,423 5,702 5,970 6,199 6,491 6,828 7,170 7,503 4.7Spain 32,826 32,444 29,380 28,702 29,412 29,580 30,332 31,071 32,072 33,227 2.5Sweden 13,496 13,785 13,236 13,678 14,032 14,488 14,955 15,558 16,298 17,028 3.9Switzerland 15,232 15,473 14,808 15,286 15,480 15,807 16,255 16,789 17,333 17,954 3.0United Kingdom 82,675 84,019 80,709 82,278 83,367 85,225 87,472 90,139 93,563 97,332 3.1Western Europe total 441,127 448,298 433,911 442,970 453,859 464,531 477,680 492,652 509,639 528,761 3.1Central and Eastern Europe                     Czech Republic 5,372 5,879 5,774 6,103 6,247 6,444 6,935 7,116 7,479 7,891 4.8Hungary 3,221 3,375 3,210 3,268 3,316 3,444 3,635 3,845 4,043 4,256 5.1Poland 8,660 9,524 9,213 9,609 9,950 10,332 10,825 11,395 11,993 12,668 4.9Romania 2,164 2,603 2,753 2,598 2,642 2,758 2,914 3,076 3,242 3,419 5.3Russia 19,766 21,508 19,282 21,523 24,140 26,437 29,087 32,284 35,591 38,996 10.1Turkey 5,179 5,564 5,367 6,249 10,131 11,242 12,473 13,774 15,048 16,159 9.8Central and EasternEurope total 44,362 48,453 45,599 49,350 56,426 60,657 65,869 71,490 77,396 83,389 8.1Middle East/Africa                    Israel 3,778 3,874 3,822 3,868 3,900 4,010 4,181 4,359 4,550 4,748 4.0Middle East/NorthAfrica (MENA)† 11,515 14,050 15,096 17,300 25,412 28,516 31,698 34,983 39,064 43,622 11.4South Africa 7,338 7,819 8,031 9,340 10,270 11,563 12,912 14,347 15,753 17,227 10.9Middle East/Africa total 22,631 25,743 26,949 30,508 39,582 44,089 48,791 53,689 59,367 65,597 10.6EMEA total 508,120 522,494 506,459 522,828 549,867 569,277 592,340 617,831 646,402 677,747 4.3†Comprises Algeria, Bahrain, Egypt, Jordan, Kuwait, Lebanon, Libya, Morocco, Oman, Qatar, Saudi Arabia, Syria, and the United Arab Emirates.Sources: PricewaterhouseCoopers LLP, Wilkofsky Gruen Associates Industry overview | Global market by region 71
  • Internet access MENA’s Internet access market more than doubled in 2011 to $16.9 billion, propelling it to the leading territory in EMEA.Internet access spending rose by 22.7 percent in 2011, and we France and Germany were next, at $14.1 billion each, followedproject an 8.8 percent compound annual increase during the by the UK at $11.9 billion and Italy at $10.1 billion. Spain atnext five years. Overall spending will rise from $111 billion in $7.4 billion was the only other country above $5 billion in2011 to $169 billion in 2016. 2011. Western Europe will expand at a 6.4 percent compound annual rate during the next five years. Central and Eastern Europe will grow by 11.1 percent compounded annually, and Middle East/Africa will increase at a 15.2 percent compound annual rate.Internet access market: wired and mobile (US$ millions) 2012–16EMEA 2007 2008 2009 2010 2011p 2012 2013 2014 2015 2016 CAGRInternet access:wired and mobile 67,749 76,361 83,179 90,455 111,000 122,237 133,979 144,651 156,977 169,335  % Change 16.3 12.7 8.9 8.7 22.7 10.1 9.6 8.0 8.5 7.9 8.8Sources: PricewaterhouseCoopers LLP, Wilkofsky Gruen Associates Filter digital and nondigital spending data. Visit the online Outlook at www.pwc.com/outlook72 PwC | Global entertainment and media outlook: 2012–2016
  • Internet access market: wired and mobile by country (US$ millions) 2012–16EMEA 2007 2008 2009 2010 2011p 2012 2013 2014 2015 2016 CAGRWestern Europe                    Austria 1,857 1,846 1,767 1,842 1,950 2,058 2,208 2,319 2,461 2,604 6.0Belgium 1,712 1,882 1,967 2,059 2,213 2,357 2,538 2,689 2,829 2,957 6.0Denmark 1,445 1,524 1,652 1,803 1,894 2,006 2,128 2,214 2,299 2,348 4.4Finland 962 1,047 1,025 1,068 1,153 1,239 1,344 1,450 1,570 1,692 8.0France 9,651 11,502 12,405 13,233 14,142 15,202 16,348 17,317 18,447 19,472 6.6Germany 11,660 12,187 12,654 13,135 14,059 14,961 15,999 16,559 17,200 17,916 5.0Greece 423 626 810 974 1,137 1,228 1,385 1,541 1,698 1,836 10.1Ireland 375 476 527 555 604 665 761 827 882 932 9.1Italy 7,144 7,584 8,135 8,802 10,084 10,924 11,340 12,130 13,137 14,178 7.1Netherlands 2,610 2,752 2,806 2,955 3,498 3,709 3,833 3,982 4,138 4,338 4.4Norway 1,305 1,358 1,408 1,436 1,532 1,672 1,814 1,967 2,139 2,333 8.8Portugal 789 692 975 1,240 1,572 1,745 1,933 2,121 2,311 2,506 9.8Spain 4,668 5,342 5,570 5,736 7,362 8,077 8,862 9,216 9,745 10,242 6.8Sweden 2,071 2,091 2,076 2,082 2,108 2,219 2,409 2,641 2,912 3,186 8.6Switzerland 2,103 2,111 2,134 2,224 2,371 2,544 2,748 2,915 3,066 3,216 6.3United Kingdom 8,957 10,432 10,921 11,216 11,916 12,856 13,907 14,640 15,530 16,250 6.4Western Europe total 57,732 63,452 66,832 70,360 77,595 83,462 89,557 94,528 100,364 106,006 6.4Central and Eastern Europe                     Czech Republic 816 1,004 1,212 1,380 1,463 1,585 1,778 1,958 2,135 2,310 9.6Hungary 467 526 573 639 711 828 971 1,118 1,256 1,388 14.3Poland 1,241 1,345 1,407 1,638 1,759 1,914 2,124 2,311 2,495 2,672 8.7Romania 492 698 897 842 991 1,109 1,220 1,332 1,442 1,545 9.3Russia 1,678 2,235 2,738 3,335 3,809 4,387 5,056 5,765 6,489 7,209 13.6Turkey 706 963 1,105 1,337 4,635 5,239 5,852 6,461 7,045 7,499 10.1Central and EasternEurope total 5,400 6,771 7,932 9,171 13,368 15,062 17,001 18,945 20,862 22,623 11.1Middle East/Africa                    Israel 759 811 850 878 908 986 1,096 1,197 1,301 1,392 8.9Middle East/NorthAfrica (MENA)† 3,111 4,508 6,421 8,309 16,901 19,765 22,619 25,498 29,119 33,189 14.5South Africa 747 819 1,144 1,737 2,228 2,962 3,706 4,483 5,331 6,125 22.4Middle East/Africa total 4,617 6,138 8,415 10,924 20,037 23,713 27,421 31,178 35,751 40,706 15.2EMEA total 67,749 76,361 83,179 90,455 111,000 122,237 133,979 144,651 156,977 169,335 8.8†Comprises Algeria, Bahrain, Egypt, Jordan, Kuwait, Lebanon, Libya, Morocco, Oman, Qatar, Saudi Arabia, Syria, and the United Arab Emirates.Sources: PricewaterhouseCoopers LLP, Wilkofsky Gruen Associates Industry overview | Global market by region 73
  • Advertising Germany and the UK have the largest advertising markets in EMEA, at $23 billion and $22 billion, respectively, in 2011.Although advertising increased 2.2 percent 2011 following a France and Italy were next, at $15 billion and $12 billion,5.5 percent gain in 2010, spending remained nearly $10 billion respectively, followed by Russia at $9 billion and Spain atless than in 2008. During the next five years, advertising will $8 billion. Advertising in Western Europe will rise at aincrease at a 4.6 percent compound annual rate to $175 bil- 3.4 percent compound annual rate during the next five years.lion in 2016 from $139 billion in 2011. Internet advertising Central and Eastern Europe will average 10.6 percent on aand a small video game segment will be the fastest-growing compound annual basis, and Middle East/Africa will increasecategories, at 13.0 percent and 10.2 percent, respectively, each at a 6.3 percent compound annual rate.on a compound annual basis. TV and out-of-home advertisingwill each average more than 4 percent compounded annually,with cinema and radio each growing by more than 3 percenton a compound annual basis. The remaining segments willeach grow by 2.5 percent or less, and directory advertisingwill decline.Advertising by segment (US$ millions) 2012–16EMEA 2007 2008 2009 2010 2011p 2012 2013 2014 2015 2016 CAGRInternet advertising:wired and mobile 16,549 19,979 21,292 24,734 28,576 32,304 36,598 41,582 46,988 52,656  % Change 40.2 20.7 6.6 16.2 15.5 13.0 13.3 13.6 13.0 12.1 13.0Television 44,849 44,745 39,537 43,572 44,815 46,258 47,896 51,166 53,529 56,786  % Change 6.9 –0.2 –11.6 10.2 2.9 3.2 3.5 6.8 4.6 6.1 4.8Cinema 951 872 797 861 886 896 919 959 1,005 1,054  % Change –3.2 –8.3 –8.6 8.0 2.9 1.1 2.6 4.4 4.8 4.9 3.5Video games 298 389 442 519 613 701 780 855 930 994  % Change 46.1 30.5 13.6 17.4 18.1 14.4 11.3 9.6 8.8 6.9 10.2Consumer magazines 14,003 13,901 10,823 10,928 10,850 10,925 11,142 11,436 11,824 12,274  % Change 3.5 –0.7 –22.1 1.0 –0.7 0.7 2.0 2.6 3.4 3.8 2.5Newspapers 37,699 36,080 30,172 30,655 29,599 29,129 29,238 29,239 29,677 30,353  % Change 4.3 –4.3 –16.4 1.6 –3.4 –1.6 0.4 0.0 1.5 2.3 0.5Radio 7,777 7,631 6,810 7,055 7,131 7,321 7,551 7,812 8,061 8,311  % Change 5.0 –1.9 –10.8 3.6 1.1 2.7 3.1 3.5 3.2 3.1 3.1Out-of-home 10,576 10,714 8,908 9,419 9,744 10,204 10,628 11,076 11,506 11,979  % Change 7.5 1.3 –16.9 5.7 3.5 4.7 4.2 4.2 3.9 4.1 4.2Directories 11,524 11,443 9,762 9,210 8,811 8,548 8,310 8,276 8,394 8,618  % Change 4.0 –0.7 –14.7 –5.7 –4.3 –3.0 –2.8 –0.4 1.4 2.7 –0.4Trade magazines 6,242 6,177 4,857 4,735 4,687 4,695 4,756 4,851 5,009 5,202  % Change 3.9 –1.0 –21.4 –2.5 –1.0 0.2 1.3 2.0 3.3 3.9 2.1Total 147,577 148,171 129,294 136,466 139,437 143,556 149,167 157,171 165,147 174,596  % Change 7.8 0.4 –12.7 5.5 2.2 3.0 3.9 5.4 5.1 5.7 4.6Note: Television, newspaper, consumer magazine, trade magazine, and directory Web site and mobile advertising is included in the respective segments and in the Internetadvertising segment but only once in the overall total.Sources: PricewaterhouseCoopers LLP, Wilkofsky Gruen Associates74 PwC | Global entertainment and media outlook: 2012–2016
  • Advertising by country (US$ millions) 2012–16EMEA 2007 2008 2009 2010 2011p 2012 2013 2014 2015 2016 CAGRWestern Europe                      Austria 2,199 2,386 2,351 2,558 2,701 2,839 2,979 3,174 3,348 3,540 5.6Belgium 3,950 3,994 3,971 4,233 4,322 4,390 4,542 4,817 5,031 5,271 4.0Denmark 2,648 2,586 2,214 2,255 2,261 2,287 2,333 2,404 2,466 2,547 2.4Finland 1,925 1,955 1,679 1,768 1,879 1,983 2,065 2,175 2,273 2,395 5.0France 15,304 15,285 13,740 14,543 14,921 15,244 15,614 16,303 16,915 17,775 3.6Germany 23,858 23,803 21,604 22,569 23,258 23,853 24,434 25,054 25,631 26,314 2.5Greece 3,481 3,433 2,995 2,648 2,130 1,987 1,932 1,928 1,949 1,999 –1.3Ireland 1,465 1,379 1,283 1,202 1,143 1,116 1,145 1,199 1,258 1,334 3.1Italy 14,145 13,938 12,173 12,609 12,382 12,485 12,710 13,239 13,631 14,162 2.7Netherlands 5,715 5,724 4,946 5,114 5,222 5,357 5,509 5,779 6,027 6,375 4.1Norway 2,806 2,815 2,389 2,490 2,614 2,673 2,754 2,866 2,976 3,089 3.4Portugal 1,580 1,548 1,350 1,339 1,237 1,215 1,218 1,255 1,284 1,333 1.5Spain 11,381 10,255 8,187 8,191 7,826 7,641 7,797 8,198 8,566 9,020 2.9Sweden 3,486 3,648 3,124 3,495 3,690 3,816 3,913 4,064 4,204 4,381 3.5Switzerland 5,345 5,387 4,719 5,047 5,300 5,374 5,499 5,710 5,905 6,149 3.0United Kingdom 23,715 23,020 20,329 21,720 22,119 22,808 23,485 24,616 26,056 27,776 4.7Western Europe total 123,003 121,156 107,054 111,781 113,005 115,068 117,929 122,781 127,520 133,460 3.4Central and Eastern Europe                    Czech Republic 2,130 2,295 1,994 1,991 1,969 1,984 2,211 2,126 2,208 2,329 3.4Hungary 1,002 1,082 922 927 909 915 939 977 1,004 1,047 2.9Poland 2,504 2,829 2,558 2,600 2,698 2,799 2,928 3,159 3,386 3,669 6.3Romania 558 685 503 455 429 428 448 480 505 542 4.8Russia 8,094 8,609 6,247 7,391 9,036 10,174 11,488 13,205 14,952 16,755 13.1Turkey 2,173 2,152 1,826 2,365 2,837 3,230 3,696 4,224 4,727 5,197 12.9Central and EasternEurope total 16,461 17,652 14,050 15,729 17,878 19,530 21,710 24,171 26,782 29,539 10.6Middle East/Africa                    Israel 1,016 1,017 952 986 975 983 1,003 1,029 1,054 1,091 2.3Middle East/NorthAfrica (MENA)† 4,013 5,020 4,197 4,472 3,917 4,044 4,232 4,475 4,749 5,032 5.1South Africa 3,084 3,326 3,041 3,498 3,662 3,931 4,293 4,715 5,042 5,474 8.4Middle East/Africa total 8,113 9,363 8,190 8,956 8,554 8,958 9,528 10,219 10,845 11,597 6.3EMEA total 147,577 148,171 129,294 136,466 139,437 143,556 149,167 157,171 165,147 174,596 4.6†Comprises Algeria, Bahrain, Egypt, Jordan, Kuwait, Lebanon, Libya, Morocco, Oman, Qatar, Saudi Arabia, Syria, and the United Arab Emirates.Sources: PricewaterhouseCoopers LLP, Wilkofsky Gruen Associates Industry overview | Global market by region 75
  • Consumer/end-user spending Germany was the largest market in 2011, at $62 billion, with the UK and France next, at $49 billion and $48 billion,Consumer/end-user spending rose by 1.2 percent in 2011. respectively. Italy was a distant fourth at $24 billion. WeGrowth will remain modest, at less than 2 percent annually expect Western Europe to increase at a 1.9 percent compoundduring the next two years and less than 3 percent annually annual rate during the next five years; Central and Easternduring 2014–16. Spending will rise from $299 billion in 2011 Europe will expand by 4.4 percent compounded annually;to $334 billion in 2016, a 2.2 percent compound annual and Middle East/Africa will average 3.9 percent on aincrease. Video games will be the fastest-growing category, compound annual basis.with a projected 4.6 percent compound annual increase.TV subscriptions will expand by 4.4 percent compoundedannually, and music will grow at a 3.0 percent compoundannual rate. The remaining segments will grow by 2.6 percentor less; consumer and educational books will be flat; andconsumer magazines will decline.Consumer/end-user spending by segment (US$ millions) 2012–16EMEA 2007 2008 2009 2010 2011p 2012 2013 2014 2015 2016 CAGRTV subscriptionsand license fees 61,061 64,880 68,257 71,381 76,400 80,241 84,105 87,378 90,891 94,812  % Change 8.6 6.3 5.2 4.6 7.0 5.0 4.8 3.9 4.0 4.3 4.4Music 23,544 22,698 22,407 20,925 21,062 21,441 22,018 22,734 23,527 24,409  % Change –3.8 –3.6 –1.3 –6.6 0.7 1.8 2.7 3.3 3.5 3.7 3.0Filmed entertainment 24,520 24,348 24,638 25,164 25,109 25,258 25,770 26,543 27,480 28,489  % Change 0.8 –0.7 1.2 2.1 –0.2 0.6 2.0 3.0 3.5 3.7 2.6Video games 14,789 17,407 17,003 17,217 17,395 17,885 18,481 19,420 20,530 21,766  % Change 23.1 17.7 –2.3 1.3 1.0 2.8 3.3 5.1 5.7 6.0 4.6Consumer magazines 23,844 23,344 22,345 22,124 21,765 21,294 20,900 20,654 20,464 20,367  % Change 1.3 –2.1 –4.3 –1.0 –1.6 –2.2 –1.9 –1.2 –0.9 –0.5 –1.3Newspapers 31,461 31,556 31,216 31,097 30,623 30,528 30,498 30,566 30,715 30,899  % Change 6.0 0.3 –1.1 –0.4 –1.5 –0.3 –0.1 0.2 0.5 0.6 0.2Radio 8,787 8,924 9,135 9,259 9,263 9,298 9,480 9,521 9,596 9,691  % Change 2.4 1.6 2.4 1.4 0.0 0.4 2.0 0.4 0.8 1.0 0.9Consumer andeducational books 47,155 47,252 46,080 45,264 44,770 44,454 44,367 44,435 44,594 44,810  % Change 2.6 0.2 –2.5 –1.8 –1.1 –0.7 –0.2 0.2 0.4 0.5 0.0Business-to-business 57,633 57,553 52,905 53,476 53,043 53,085 53,575 54,758 56,481 58,573  % Change 6.9 –0.1 –8.1 1.1 –0.8 0.1 0.9 2.2 3.1 3.7 2.0Total 292,794 297,962 293,986 295,907 299,430 303,484 309,194 316,009 324,278 333,816  % Change 5.1 1.8 –1.3 0.7 1.2 1.4 1.9 2.2 2.6 2.9 2.2Sources: PricewaterhouseCoopers LLP, Wilkofsky Gruen Associates76 PwC | Global entertainment and media outlook: 2012–2016
  • Consumer/end-user spending (excluding Internet access) by country (US$ millions) 2012–16EMEA 2007 2008 2009 2010 2011p 2012 2013 2014 2015 2016 CAGRWestern Europe                      Austria 7,145 7,306 7,256 7,221 7,290 7,402 7,496 7,614 7,762 7,969 1.8Belgium 5,775 5,939 5,491 5,516 5,574 5,660 5,776 5,925 6,085 6,270 2.4Denmark 5,692 5,783 5,797 5,743 5,790 5,876 5,967 6,087 6,224 6,377 2.0Finland 3,712 3,727 3,744 3,768 3,832 3,862 3,936 4,028 4,155 4,292 2.3France 43,476 44,226 44,781 45,616 48,035 49,049 50,229 51,211 52,375 53,816 2.3Germany 60,317 60,852 60,717 61,479 62,025 63,043 64,356 65,828 67,411 69,203 2.2Greece 2,607 2,653 2,604 2,461 2,343 2,251 2,200 2,180 2,209 2,252 –0.8Ireland 3,432 3,351 3,246 3,187 3,116 3,093 3,110 3,153 3,227 3,302 1.2Italy 24,871 24,900 23,914 23,991 23,633 23,615 23,814 24,208 24,717 25,348 1.4Netherlands 11,568 11,807 11,681 11,789 12,046 12,221 12,501 12,837 13,252 13,743 2.7Norway 6,423 6,611 6,623 6,702 6,815 6,925 7,075 7,263 7,481 7,738 2.6Portugal 2,871 3,100 3,098 3,123 3,161 3,239 3,340 3,452 3,575 3,664 3.0Spain 16,777 16,847 15,623 14,775 14,224 13,862 13,673 13,657 13,761 13,965 –0.4Sweden 7,939 8,046 8,036 8,101 8,234 8,453 8,633 8,853 9,182 9,461 2.8Switzerland 7,784 7,975 7,955 8,015 7,809 7,889 8,008 8,164 8,362 8,589 1.9United Kingdom 50,003 50,567 49,459 49,342 49,332 49,561 50,080 50,883 51,977 53,306 1.6Western Europe total 260,392 263,690 260,025 260,829 263,259 266,001 270,194 275,343 281,755 289,295 1.9Central and Eastern Europe                     Czech Republic 2,426 2,580 2,568 2,732 2,815 2,875 2,946 3,032 3,136 3,252 2.9Hungary 1,752 1,767 1,715 1,702 1,696 1,701 1,725 1,750 1,783 1,821 1.4Poland 4,915 5,350 5,248 5,371 5,493 5,619 5,773 5,925 6,112 6,327 2.9Romania 1,114 1,220 1,353 1,301 1,222 1,221 1,246 1,264 1,295 1,332 1.7Russia 9,994 10,664 10,297 10,797 11,295 11,876 12,543 13,314 14,150 15,032 5.9Turkey 2,300 2,449 2,436 2,547 2,659 2,773 2,925 3,089 3,276 3,463 5.4Central and EasternEurope total 22,501 24,030 23,617 24,450 25,180 26,065 27,158 28,374 29,752 31,227 4.4Middle East/Africa                    Israel 2,003 2,046 2,020 2,004 2,017 2,041 2,082 2,133 2,195 2,265 2.3Middle East/NorthAfrica (MENA)† 4,391 4,522 4,478 4,519 4,594 4,707 4,847 5,010 5,196 5,401 3.3South Africa 3,507 3,674 3,846 4,105 4,380 4,670 4,913 5,149 5,380 5,628 5.1Middle East/Africa total 9,901 10,242 10,344 10,628 10,991 11,418 11,842 12,292 12,771 13,294 3.9EMEA total 292,794 297,962 293,986 295,907 299,430 303,484 309,194 316,009 324,278 333,816 2.2†Comprises Algeria, Bahrain, Egypt, Jordan, Kuwait, Lebanon, Libya, Morocco, Oman, Qatar, Saudi Arabia, Syria, and the United Arab Emirates.Sources: PricewaterhouseCoopers LLP, Wilkofsky Gruen Associates Industry overview | Global market by region 77
  • Asia Pacific Japan at $193 billion is the dominant country, accounting for 42 percent of total spending in Asia Pacific in 2011 andEntertainment and media spending in Asia Pacific rose by the second-largest country in the world, behind the United5.4 percent in 2011, down from a 6.9 percent advance in States. The People’s Republic of China is second in Asia Pacific2010. We expect spending during the next five years to in- and third globally, at $109 billion. South Korea at $39 billion,crease at a 7.1 percent compound annual rate to $651 billion Australia at $35 billion, and India at $22 billion were the otherin 2016 from $462 billion in 2011. Double-digit compound countries in Asia Pacific above $20 billion in 2011.annual increases are projected for Internet advertising andvideo games. Internet access will expand at an 8.5 percentcompound annual rate; TV subscriptions will grow by8.4 percent compounded annually; and we expect increasesin excess of 5 percent compounded annually for TVadvertising, filmed entertainment, out-of-home advertising,and business-to-business.78 PwC | Global entertainment and media outlook: 2012–2016
  • Entertainment and media market by segment (US$ millions) 2012–16Asia Pacific 2007 2008 2009 2010 2011p 2012 2013 2014 2015 2016 CAGRInternet access:wired and mobile 89,935 101,264 110,975 122,200 130,835 142,783 156,636 169,150 182,863 196,930  % Change 17.1 12.6 9.6 10.1 7.1 9.1 9.7 8.0 8.1 7.7 8.5Internet advertising:wired and mobile 12,547 15,805 17,096 21,228 25,065 30,608 37,245 44,301 51,774 59,529  % Change 33.8 26.0 8.2 24.2 18.1 22.1 21.7 18.9 16.9 15.0 18.9TV subscriptionsand license fees 25,745 28,244 31,654 34,544 38,894 42,545 46,236 50,092 54,265 58,324  % Change 11.0 9.7 12.1 9.1 12.6 9.4 8.7 8.3 8.3 7.5 8.4TV advertising 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 6.9Music 12,136 11,972 11,605 11,096 11,037 11,138 11,303 11,563 11,911 12,316  % Change 1.0 –1.4 –3.1 –4.4 –0.5 0.9 1.5 2.3 3.0 3.4 2.2Filmed entertainment 19,046 19,481 19,964 21,101 21,991 23,564 25,152 26,699 28,287 29,870  % Change 5.3 2.3 2.5 5.7 4.2 7.2 6.7 6.2 5.9 5.6 6.3Video games 15,215 18,624 20,942 23,059 24,313 26,982 29,664 32,751 36,099 39,739  % Change 28.1 22.4 12.4 10.1 5.4 11.0 9.9 10.4 10.2 10.1 10.3Consumer magazinepublishing 20,393 20,162 18,244 18,167 17,920 18,176 18,370 18,697 19,250 19,932  % Change –0.2 –1.1 –9.5 –0.4 –1.4 1.4 1.1 1.8 3.0 3.5 2.2Newspaper publishing 60,353 61,422 59,028 60,935 63,093 65,234 67,518 69,953 72,583 75,360  % Change 3.1 1.8 –3.9 3.2 3.5 3.4 3.5 3.6 3.8 3.8 3.6Radio 8,316 8,596 8,456 8,861 9,103 9,478 9,861 10,270 10,695 11,134  % Change 1.7 3.4 –1.6 4.8 2.7 4.1 4.0 4.1 4.1 4.1 4.1Out-of-home 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 5.4Consumer andeducational bookpublishing 30,085 31,592 31,340 31,160 31,240 31,752 32,004 32,178 32,236 32,283  % Change 8.2 5.0 –0.8 –0.6 0.3 1.6 0.8 0.5 0.2 0.1 0.7Business-to-business 30,916 31,522 29,918 30,238 30,206 31,196 32,615 34,347 36,438 38,776  % Change 6.4 2.0 –5.1 1.1 –0.1 3.3 4.5 5.3 6.1 6.4 5.1Total 378,450 402,883 410,138 438,351 462,232 492,655 529,513 567,526 608,128 650,522  % Change 9.0 6.5 1.8 6.9 5.4 6.6 7.5 7.2 7.2 7.0 7.1Note: Television, newspaper, consumer magazine, trade magazine, and directory Web site and mobile advertising is included in the respective segments and in the Internetadvertising segment but only once in the overall total.Sources: PricewaterhouseCoopers LLP, Wilkofsky Gruen Associates Industry overview | Global market by region 79
  • Entertainment and media market by country (US$ millions) 2012–16Asia Pacific 2007 2008 2009 2010 2011p 2012 2013 2014 2015 2016 CAGRAustralia 29,954 32,903 32,803 34,264 35,021 37,003 39,162 40,925 43,078 45,029 5.2China 63,667 73,845 81,194 95,702 109,059 120,948 137,458 154,940 173,449 192,516 12.0Hong Kong 5,728 5,969 5,777 6,452 7,013 7,500 7,965 8,504 9,035 9,607 6.5India 13,480 14,947 15,490 17,264 21,628 24,778 28,671 32,948 37,642 42,226 14.3Indonesia 6,359 7,737 9,010 10,655 12,062 13,646 16,059 18,636 21,683 25,228 15.9Japan 195,808 200,147 193,627 195,667 192,796 198,938 204,913 210,424 215,876 221,630 2.8Malaysia 4,209 4,676 5,081 5,612 6,039 6,544 7,052 7,756 8,534 9,345 9.1New Zealand 4,513 4,586 4,401 4,528 4,694 4,975 5,202 5,440 5,662 5,859 4.5Pakistan 1,269 1,467 1,756 1,931 2,060 2,300 2,577 2,920 3,334 3,817 13.1Philippines 2,598 3,104 3,374 3,783 4,150 4,617 5,216 5,862 6,529 7,547 12.7Singapore 3,315 3,488 3,584 3,860 4,038 4,280 4,542 4,790 5,070 5,347 5.8South Korea 31,050 33,088 34,265 36,289 38,562 40,191 41,926 43,644 45,497 47,455 4.2Taiwan 9,024 8,960 9,452 10,006 10,454 10,667 11,086 11,700 12,447 13,334 5.0Thailand 6,719 6,950 8,825 9,927 11,273 12,315 13,195 14,135 14,995 15,901 7.1Vietnam 757 1,016 1,499 2,411 3,383 3,953 4,489 4,902 5,297 5,681 10.9Total 378,450 402,883 410,138 438,351 462,232 492,655 529,513 567,526 608,128 650,522 7.1Sources: PricewaterhouseCoopers LLP, Wilkofsky Gruen AssociatesInternet access Japan, the PRC, and South Korea are the dominant countries, with spending at $65 billion, $24 billion, and $15 billion,Internet access rose 7.1 percent in 2011. We expect faster respectively, in 2011. Australia at $7 billion was the onlyincreases during the next five years, averaging 8.5 percent other country above $4 billion. The top four countries incompounded annually to $197 billion from $131 billion 2011 accounted for 85 percent of total access spending inin 2011. Asia Pacific.Internet access market: wired and mobile (US$ millions) 2012–16Asia Pacific 2007 2008 2009 2010 2011p 2012 2013 2014 2015 2016 CAGRInternet access:wired and mobile 89,935 101,264 110,975 122,200 130,835 142,783 156,636 169,150 182,863 196,930  % Change 17.1 12.6 9.6 10.1 7.1 9.1 9.7 8.0 8.1 7.7 8.5Sources: PricewaterhouseCoopers LLP, Wilkofsky Gruen Associates80 PwC | Global entertainment and media outlook: 2012–2016
  • Internet access market: wired and mobile by country (US$ millions) 2012–16Asia Pacific 2007 2008 2009 2010 2011p 2012 2013 2014 2015 2016 CAGRAustralia 4,006 5,175 5,460 5,766 6,626 7,285 8,121 8,783 9,759 10,479 9.6China 11,562 13,855 16,288 20,697 24,059 27,486 31,497 35,147 38,927 42,633 12.1Hong Kong 805 845 919 1,060 1,327 1,470 1,580 1,728 1,856 1,987 8.4India 678 843 1,099 1,576 2,477 3,771 5,445 7,242 9,097 10,827 34.3Indonesia 1,142 1,582 2,017 2,509 2,668 2,993 3,862 5,098 6,771 8,903 27.3Japan 54,471 59,626 62,576 65,037 65,232 69,000 72,850 75,331 77,734 80,045 4.2Malaysia 588 761 933 1,100 1,203 1,364 1,615 2,032 2,528 3,039 20.4New Zealand 410 437 439 500 593 713 787 848 916 983 10.6Pakistan 485 607 665 728 808 987 1,205 1,486 1,824 2,236 22.6Philippines 383 748 929 1,075 1,231 1,492 1,860 2,248 2,663 3,413 22.6Singapore 750 842 917 1,012 1,158 1,273 1,391 1,487 1,610 1,725 8.3South Korea 11,759 12,718 13,485 14,307 15,099 15,479 15,895 16,189 16,485 16,762 2.1Taiwan 1,889 1,795 2,418 2,516 2,637 2,819 3,063 3,392 3,901 4,473 11.1Thailand 723 958 2,022 2,643 3,143 3,587 3,964 4,338 4,715 5,088 10.1Vietnam 284 472 808 1,674 2,574 3,064 3,501 3,801 4,077 4,337 11.0Total 89,935 101,264 110,975 122,200 130,835 142,783 156,636 169,150 182,863 196,930 8.5Sources: PricewaterhouseCoopers LLP, Wilkofsky Gruen AssociatesAdvertising Japan at $49 billion in 2011 was the leading country, with the PRC second at $36 billion and Australia third at $13 billion,Advertising increased by 6.6 percent in 2011, the second- together accounting for 73 percent of total advertising in Asiafastest increase during the past five years. We expect the Pacific. Excluding Japan, advertising growth in the remainingmarket to increase by 8.1 percent compounded annually countries during the next five years will average 10.6 percentduring the next five years. We project an 18.9 percent on a compound annual basis.compound annual increase in Internet advertising and12.8 percent for the small, video game market. Cinemaadvertising will increase at an 8.9 percent compound annualrate; TV advertising will grow at a projected 6.9 percentcompounded annually; out-of-home will rise at a 5.4 percentcompound annual rate; and radio will increase by 5.3 percenton a compound annual basis. Drill down through data across segments, components, and territories. Visit the online Outlook at www.pwc.com/outlook Industry overview | Global market by region 81
  • Advertising by segment (US$ millions) 2012–16Asia Pacific 2007 2008 2009 2010 2011p 2012 2013 2014 2015 2016 CAGRInternet advertising:wired and mobile 12,547 15,805 17,096 21,228 25,065 30,608 37,245 44,301 51,774 59,529  % Change 33.8 26.0 8.2 24.2 18.1 22.1 21.7 18.9 16.9 15.0 18.9Television 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 6.9Cinema 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 8.9Video 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 12.8Consumer magazines 7,532 7,378 6,165 6,287 6,222 6,458 6,678 6,926 7,248 7,641  % Change –0.2 –2.0 –16.4 2.0 –1.0 3.8 3.4 3.7 4.6 5.4 4.2Newspapers 30,635 30,422 28,364 29,716 31,344 32,712 34,137 35,591 37,163 38,842  % Change 3.7 –0.7 –6.8 4.8 5.5 4.4 4.4 4.3 4.4 4.5 4.4Radio 5,349 5,581 5,399 5,763 5,983 6,309 6,638 6,990 7,358 7,739  % Change 1.8 4.3 –3.3 6.7 3.8 5.4 5.2 5.3 5.3 5.2 5.3Out-of-home 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 5.4Directories 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 1.2Trade magazines 2,028 1,917 1,538 1,510 1,488 1,530 1,578 1,642 1,726 1,833  % Change 0.7 –5.5 –19.8 –1.8 –1.5 2.8 3.1 4.1 5.1 6.2 4.3Total 117,560 121,149 115,064 125,628 133,905 142,160 154,645 168,598 182,832 198,011  % Change 6.0 3.1 –5.0 9.2 6.6 6.2 8.8 9.0 8.4 8.3 8.1Note: Television, newspaper, consumer magazine, trade magazine, and directory Web site and mobile advertising is included in the respective segments and in the Internetadvertising segment but only once in the overall total.Sources: PricewaterhouseCoopers LLP, Wilkofsky Gruen Associates82 PwC | Global entertainment and media outlook: 2012–2016
  • Advertising by country (US$ millions) 2012–16Asia Pacific 2007 2008 2009 2010 2011p 2012 2013 2014 2015 2016 CAGRAustralia 13,582 14,085 12,964 13,915 13,317 13,589 14,016 14,316 14,612 14,971 2.4China 19,037 22,722 24,399 30,191 36,166 39,518 46,645 54,589 62,961 71,641 14.6Hong Kong 2,621 2,702 2,428 2,842 3,063 3,318 3,575 3,860 4,135 4,447 7.7India 4,218 4,778 4,793 5,392 6,128 6,925 7,833 8,909 10,111 11,360 13.1Indonesia 3,478 4,225 4,955 5,997 7,139 8,262 9,672 10,853 12,037 13,223 13.1Japan 57,962 55,923 49,489 49,439 48,751 50,293 51,505 53,342 55,024 56,961 3.2Malaysia 1,467 1,617 1,698 1,940 2,160 2,342 2,496 2,662 2,817 2,985 6.7New Zealand 1,993 1,973 1,759 1,780 1,823 1,900 1,981 2,039 2,111 2,164 3.5Pakistan 199 241 277 303 310 314 320 327 344 358 2.9Philippines 1,062 1,139 1,214 1,387 1,499 1,588 1,697 1,824 1,944 2,074 6.7Singapore 1,041 1,075 1,086 1,209 1,268 1,323 1,398 1,471 1,546 1,628 5.1South Korea 5,115 4,987 4,592 5,035 5,608 5,958 6,377 6,837 7,297 7,828 6.9Taiwan 2,488 2,428 2,317 2,713 2,876 2,777 2,825 2,960 3,025 3,162 1.9Thailand 3,038 2,957 2,759 3,132 3,415 3,644 3,866 4,136 4,361 4,671 6.5Vietnam 259 297 334 353 382 409 439 473 507 538 7.1Total 117,560 121,149 115,064 125,628 133,905 142,160 154,645 168,598 182,832 198,011 8.1Sources: PricewaterhouseCoopers LLP, Wilkofsky Gruen Associates Consumer/end-user spending compound annual rate, TV subscriptions and license fees by 8.4 percent compounded annually, filmed entertainment byConsumer/end-user spending rose by 3.7 percent in 2011, 6.3 percent, and business-to-business by 5.8 percent. Growthcomparable to the 3.5 percent increase in 2010. We expect in the remaining segments will average less than 3 percenta 5.2 percent advance in 2012, with growth of 5 percent compounded annually.or more continuing through 2016. For the forecast periodas a whole, growth will average 5.3 percent compounded Japan at $79 billion and the PRC at $49 billion were theannually from $197 billion in 2011 to $256 billion in dominant territories, followed by South Korea at $18 billion,2016. We project video games to expand at a 10.3 percent Australia at $15 billion, and India at $13 billion. Industry overview | Global market by region 83
  • Consumer/end-user spending by segment (US$ millions) 2012–16Asia Pacific 2007 2008 2009 2010 2011p 2012 2013 2014 2015 2016 CAGRTV subscriptionsand license fees 25,745 28,244 31,654 34,544 38,894 42,545 46,236 50,092 54,265 58,324  % Change 11.0 9.7 12.1 9.1 12.6 9.4 8.7 8.3 8.3 7.5 8.4Music 12,136 11,972 11,605 11,096 11,037 11,138 11,303 11,563 11,911 12,316  % Change 1.0 –1.4 –3.1 –4.4 –0.5 0.9 1.5 2.3 3.0 3.4 2.2Filmed entertainment 18,674 19,100 19,575 20,665 21,495 23,022 24,560 26,057 27,587 29,111  % Change 4.8 2.3 2.5 5.6 4.0 7.1 6.7 6.1 5.9 5.5 6.3Video games 15,054 18,407 20,680 22,741 23,958 26,562 29,188 32,213 35,506 39,090  % Change 28.0 22.3 12.3 10.0 5.4 10.9 9.9 10.4 10.2 10.1 10.3Consumer magazines 12,861 12,784 12,079 11,880 11,698 11,718 11,692 11,771 12,002 12,291  % Change –0.2 –0.6 –5.5 –1.6 –1.5 0.2 –0.2 0.7 2.0 2.4 1.0Newspapers 29,718 31,000 30,664 31,219 31,749 32,522 33,381 34,362 35,420 36,518  % Change 2.5 4.3 –1.1 1.8 1.7 2.4 2.6 2.9 3.1 3.1 2.8Radio 2,967 3,015 3,057 3,098 3,120 3,169 3,223 3,280 3,337 3,395  % Change 1.6 1.6 1.4 1.3 0.7 1.6 1.7 1.8 1.7 1.7 1.7Consumer andeducational books 30,085 31,592 31,340 31,160 31,240 31,752 32,004 32,178 32,236 32,283  % Change 8.2 5.0 –0.8 –0.6 0.3 1.6 0.8 0.5 0.2 0.1 0.7Business-to-business 23,715 24,356 23,445 24,120 24,301 25,284 26,645 28,262 30,169 32,253  % Change 6.7 2.7 –3.7 2.9 0.8 4.0 5.4 6.1 6.7 6.9 5.8Total 170,955 180,470 184,099 190,523 197,492 207,712 218,232 229,778 242,433 255,581  % Change 7.1 5.6 2.0 3.5 3.7 5.2 5.1 5.3 5.5 5.4 5.3Sources: PricewaterhouseCoopers LLP, Wilkofsky Gruen Associates View year-on-year growth for every data line. Visit the online Outlook at www.pwc.com/outlook84 PwC | Global entertainment and media outlook: 2012–2016
  • Consumer/end-user spending (excluding Internet access) by country (US$ millions) 2012–16Asia Pacific 2007 2008 2009 2010 2011p 2012 2013 2014 2015 2016 CAGRAustralia 12,366 13,643 14,379 14,583 15,078 16,129 17,025 17,826 18,707 19,579 5.4China 33,068 37,268 40,507 44,814 48,834 53,944 59,316 65,204 71,561 78,242 9.9Hong Kong 2,302 2,422 2,430 2,550 2,623 2,712 2,810 2,916 3,044 3,173 3.9India 8,584 9,326 9,598 10,296 13,023 14,082 15,393 16,797 18,434 20,039 9.0Indonesia 1,739 1,930 2,038 2,149 2,255 2,391 2,525 2,685 2,875 3,102 6.6Japan 83,375 84,598 81,562 81,191 78,813 79,645 80,558 81,751 83,118 84,624 1.4Malaysia 2,154 2,298 2,450 2,572 2,676 2,838 2,941 3,062 3,189 3,321 4.4New Zealand 2,110 2,176 2,203 2,248 2,278 2,362 2,434 2,553 2,635 2,712 3.5Pakistan 585 619 814 900 942 999 1,052 1,107 1,166 1,223 5.4Philippines 1,153 1,217 1,231 1,321 1,420 1,537 1,659 1,790 1,922 2,060 7.7Singapore 1,524 1,571 1,581 1,639 1,612 1,684 1,753 1,832 1,914 1,994 4.3South Korea 14,176 15,383 16,188 16,947 17,855 18,754 19,654 20,618 21,715 22,865 5.1Taiwan 4,647 4,737 4,717 4,777 4,941 5,071 5,198 5,348 5,521 5,699 2.9Thailand 2,958 3,035 4,044 4,152 4,715 5,084 5,365 5,661 5,919 6,142 5.4Vietnam 214 247 357 384 427 480 549 628 713 806 13.5Total 170,955 180,470 184,099 190,523 197,492 207,712 218,232 229,778 242,433 255,581 5.3Sources: PricewaterhouseCoopers LLP, Wilkofsky Gruen AssociatesLatin America 7 percent compounded annually are projected for out-of- home advertising and video games. Filmed entertainmentLatin America was the fast-growing region in 2011, with a will grow at a 6.4 percent compound annual rate; news-9.5 percent increase. We expect Latin America to continue to papers will grow at 5.5 percent compounded annually;be the fastest-growing region, with a projected 9.7 percent and consumer magazines will increase at 5.3 percent com-compound annual increase to $134 billion in 2016 from pounded annually. The remaining segments will average less$84 billion in 2011. We expect double-digit compound annual than 5 percent compounded annually.growth in Internet access spending and Internet advertising.TV advertising will grow at a 9.8 percent compound annual Brazil and Mexico are the dominant countries, at $39 billionrate followed by TV subscriptions and license fees at and $19 billion, respectively, in 2011, followed by Colombia9.2 percent compounded annually. Radio will grow at an at $13 billion.8.4 percent compound annual rate, and gains in excess of Industry overview | Global market by region 85
  • Entertainment and media market by segment (US$ millions) 2012–16Latin America 2007 2008 2009 2010 2011p 2012 2013 2014 2015 2016 CAGRInternet 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 16.1Internet 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 15.9TV subscriptionsand license fees 11,938 13,965 15,574 17,857 19,993 21,735 23,883 26,112 28,581 31,101  % Change 12.2 17.0 11.5 14.7 12.0 8.7 9.9 9.3 9.5 8.8 9.2TV advertising 11,466 12,848 13,358 16,174 17,102 18,148 19,443 24,793 22,484 27,295  % Change 11.9 12.1 4.0 21.1 5.7 6.1 7.1 27.5 –9.3 21.4 9.8Music 1,336 1,260 1,263 1,240 1,259 1,298 1,347 1,412 1,462 1,543  % Change –7.5 –5.7 0.2 –1.8 1.5 3.1 3.8 4.8 3.5 5.5 4.2Filmed entertainment 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 6.4Video 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 7.2Consumer magazinepublishing 3,370 3,497 3,401 3,726 3,919 4,132 4,319 4,554 4,794 5,068  % Change 7.3 3.8 –2.7 9.6 5.2 5.4 4.5 5.4 5.3 5.7 5.3Newspaper publishing 7,138 7,498 7,239 7,653 7,995 8,403 8,865 9,369 9,905 10,470  % Change 9.7 5.0 –3.5 5.7 4.5 5.1 5.5 5.7 5.7 5.7 5.5Radio 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 8.4Out-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 7.6Consumer andeducational bookpublishing 3,183 3,378 3,338 3,495 3,598 3,714 3,841 3,992 4,147 4,322  % Change 3.1 6.1 –1.2 4.7 2.9 3.2 3.4 3.9 3.9 4.2 3.7Business-to-business 5,126 5,331 5,143 5,346 5,577 5,837 6,131 6,464 6,814 7,200  % Change 11.2 4.0 –3.5 3.9 4.3 4.7 5.0 5.4 5.4 5.7 5.2Total 56,874 63,559 67,456 77,122 84,455 92,198 101,474 114,683 120,780 133,948  % Change 12.5 11.8 6.1 14.3 9.5 9.2 10.1 13.0 5.3 10.9 9.7Note: Television, newspaper, consumer magazine, trade magazine, and directory Web site and mobile advertising is included in the respective segments and in the Internetadvertising segment but only once in the overall total.Sources: PricewaterhouseCoopers LLP, Wilkofsky Gruen Associates86 PwC | Global entertainment and media outlook: 2012–2016
  • Entertainment and media market by country (US$ millions) 2012–16Latin America 2007 2008 2009 2010 2011p 2012 2013 2014 2015 2016 CAGRArgentina 5,545 6,265 6,831 7,857 8,649 9,361 10,360 11,548 12,459 13,669 9.6Brazil 25,055 28,032 30,125 35,379 39,168 43,307 48,255 55,519 57,781 64,823 10.6Chile 2,783 2,947 3,034 3,357 3,660 3,953 4,289 4,724 5,024 5,458 8.3Colombia 9,020 10,464 11,213 12,305 13,043 13,910 15,020 16,410 17,674 19,343 8.2Mexico 13,672 14,941 15,277 17,180 18,777 20,385 22,119 24,858 26,082 28,693 8.9Venezuela 799 910 976 1,044 1,158 1,282 1,431 1,624 1,760 1,962 11.1Total 56,874 63,559 67,456 77,122 84,455 92,198 101,474 114,683 120,780 133,948 9.7Sources: PricewaterhouseCoopers LLP, Wilkofsky Gruen AssociatesInternet access Brazil is the leader, at $8 billion in 2011, with Mexico and Argentina at $3 billion each and Colombia at $2 billion.Internet access spending will rise from $16 billion in2011 to $34 billion in 2016, a 16.1 percent compoundannual increase.Internet access market: wired and mobile (US$ millions) 2012–16Latin America 2007 2008 2009 2010 2011p 2012 2013 2014 2015 2016 CAGRInternet 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 16.1Sources: PricewaterhouseCoopers LLP, Wilkofsky Gruen AssociatesInternet access market: wired and mobile by country (US$ millions) 2012–16Latin America 2007 2008 2009 2010 2011p 2012 2013 2014 2015 2016 CAGRArgentina 1,182 1,436 1,680 2,241 2,573 2,835 3,234 3,616 3,963 4,271 10.7Brazil 3,503 4,229 5,060 6,205 7,608 9,346 11,576 13,255 14,810 16,228 16.4Chile 325 361 405 457 515 593 698 823 945 1,064 15.6Colombia 767 1,114 1,451 1,818 2,214 2,641 3,197 3,776 4,680 5,566 20.2Mexico 1,350 1,795 2,242 2,645 3,104 3,772 4,361 5,084 5,830 6,593 16.3Venezuela 80 114 138 153 182 216 261 310 358 406 17.4Total 7,207 9,049 10,976 13,519 16,196 19,403 23,327 26,864 30,586 34,128 16.1Sources: PricewaterhouseCoopers LLP, Wilkofsky Gruen Associates Industry overview | Global market by region 87
  • Advertising to a 15.8 percent increase. Internet advertising will expand at a projected 15.9 percent compound annual rate, and a tinyAdvertising rose 6.6 percent in 2011, down from the video game advertising market will increase by 12.3 percent on17.5 percent increase in 2010 that was enhanced by a compound annual basis. Television, the largest advertisingadvertising associated with the FIFA World Cup. Growth segment, will expand at a projected 9.8 percent compoundfor the five-year forecast period will average 9.0 percent annual rate.compounded annually to $43 billion in 2016 from $28 billionin 2011. Advertising associated with the 2014 FIFA World Brazil was the leader in 2011, at $15 billion, with MexicoCup in Brazil will lead to a 19.8 percent increase that year next at $6 billion, together constituting 75 percent of thefollowed by a 3.2 percent decline in 2015 as funds leave the market in Latin America.market. Then, in 2016, the Olympics in Brazil will contributeAdvertising by segment (US$ millions) 2012–16Latin America 2007 2008 2009 2010 2011p 2012 2013 2014 2015 2016 CAGRInternet 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 15.9Television 11,466 12,848 13,358 16,174 17,102 18,148 19,443 24,793 22,484 27,295  % Change 11.9 12.1 4.0 21.1 5.7 6.1 7.1 27.5 –9.3 21.4 9.8Cinema 69 87 90 97 103 110 119 128 136 146  % Change 21.1 26.1 3.4 7.8 6.2 6.8 8.2 7.6 6.3 7.4 7.2Video games 15 23 27 30 38 43 51 57 63 68  % Change 25.0 53.3 17.4 11.1 26.7 13.2 18.6 11.8 10.5 7.9 12.3Consumer magazines 1,359 1,502 1,395 1,596 1,690 1,788 1,867 2,013 2,139 2,297  % Change 8.2 10.5 –7.1 14.4 5.9 5.8 4.4 7.8 6.3 7.4 6.3Newspapers 3,290 3,495 3,285 3,629 3,883 4,196 4,548 4,926 5,316 5,715  % Change 11.8 6.2 –6.0 10.5 7.0 8.1 8.4 8.3 7.9 7.5 8.0Radio 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 8.4Out-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 7.6Directories 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 1.0Trade 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 8.7Total 20,056 22,166 22,426 26,353 28,082 29,962 32,163 38,524 37,292 43,166  % Change 12.2 10.5 1.2 17.5 6.6 6.7 7.3 19.8 –3.2 15.8 9.0Note: Television, newspaper, consumer magazine, trade magazine, and directory Web site and mobile advertising is included in the respective segments and in the Internetadvertising segment but only once in the overall total.Sources: PricewaterhouseCoopers LLP, Wilkofsky Gruen Associates88 PwC | Global entertainment and media outlook: 2012–2016
  • Advertising by country (US$ millions) 2012–16Latin America 2007 2008 2009 2010 2011p 2012 2013 2014 2015 2016 CAGRArgentina 1,455 1,747 2,032 2,188 2,409 2,686 3,071 3,636 3,946 4,584 13.7Brazil 9,949 11,263 11,722 13,834 14,637 15,535 16,516 20,290 18,981 22,503 9.0Chile 1,149 1,113 1,063 1,159 1,257 1,336 1,417 1,570 1,585 1,733 6.6Colombia 2,355 2,415 2,172 2,719 2,915 3,129 3,384 3,886 3,935 4,394 8.6Mexico 4,892 5,322 5,099 6,077 6,439 6,801 7,241 8,510 8,174 9,177 7.3Venezuela 256 306 338 376 425 475 534 632 671 775 12.8Total 20,056 22,166 22,426 26,353 28,082 29,962 32,163 38,524 37,292 43,166 9.0Sources: PricewaterhouseCoopers LLP, Wilkofsky Gruen AssociatesConsumer/end-user spending Brazil at $17 billion, Mexico at $9 billion, and Colombia at $8 billion were the leading countries in 2011, accounting forConsumer/end-user spending rose by 7.9 percent in 2011, 85 percent of the total.down from a 9.4 percent increase in 2010. We expect spendingto grow by 7.1 percent compounded annually to $57 billion in2016 from $40 billion in 2011. TV subscriptions and licensefees at 9.2 percent compounded annually will be the fastest-growing segment, followed by video games at 7.1 percent,filmed entertainment at 6.3 percent, and business-to-businessat 5.9 percent. The remaining segments will grow by less than5 percent compounded annually. Download a PDF version of each segment. Visit the online Outlook at www.pwc.com/outlook Industry overview | Global market by region 89
  • Consumer/end-user spending by segment (US$ millions) 2012–16Latin America 2007 2008 2009 2010 2011p 2012 2013 2014 2015 2016 CAGRTV subscriptionsand license fees 11,938 13,965 15,574 17,857 19,993 21,735 23,883 26,112 28,581 31,101  % Change 12.2 17.0 11.5 14.7 12.0 8.7 9.9 9.3 9.5 8.8 9.2Music 1,336 1,260 1,263 1,240 1,259 1,298 1,347 1,412 1,462 1,543  % Change –7.5 –5.7 0.2 –1.8 1.5 3.1 3.8 4.8 3.5 5.5 4.2Filmed entertainment 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 6.3Video 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 7.1Consumer magazines 2,011 1,995 2,006 2,130 2,229 2,344 2,452 2,541 2,655 2,771  % Change 6.6 –0.8 0.6 6.2 4.6 5.2 4.6 3.6 4.5 4.4 4.4Newspapers 3,848 4,003 3,954 4,024 4,112 4,207 4,317 4,443 4,589 4,755  % Change 8.1 4.0 –1.2 1.8 2.2 2.3 2.6 2.9 3.3 3.6 2.9Consumer andeducational books 3,183 3,378 3,338 3,495 3,598 3,714 3,841 3,992 4,147 4,322  % Change 3.1 6.1 –1.2 4.7 2.9 3.2 3.4 3.9 3.9 4.2 3.7Business-to-business 3,831 3,980 3,880 4,018 4,185 4,401 4,656 4,947 5,253 5,569  % Change 10.1 3.9 –2.5 3.6 4.2 5.2 5.8 6.3 6.2 6.0 5.9Total 29,611 32,344 34,054 37,250 40,177 42,833 45,984 49,295 52,902 56,654  % Change 8.6 9.2 5.3 9.4 7.9 6.6 7.4 7.2 7.3 7.1 7.1Sources: PricewaterhouseCoopers LLP, Wilkofsky Gruen AssociatesConsumer/end-user spending (excluding Internet access) by country (US$ millions)  2012–16Latin America 2007 2008 2009 2010 2011p 2012 2013 2014 2015 2016 CAGRArgentina 2,908 3,082 3,119 3,428 3,667 3,840 4,055 4,296 4,550 4,814 5.6Brazil 11,603 12,540 13,343 15,340 16,923 18,426 20,163 21,974 23,990 26,092 9.0Chile 1,309 1,473 1,566 1,741 1,888 2,024 2,174 2,331 2,494 2,661 7.1Colombia 5,898 6,935 7,590 7,768 7,914 8,140 8,439 8,748 9,059 9,383 3.5Mexico 7,430 7,824 7,936 8,458 9,234 9,812 10,517 11,264 12,078 12,923 7.0Venezuela 463 490 500 515 551 591 636 682 731 781 7.2Total 29,611 32,344 34,054 37,250 40,177 42,833 45,984 49,295 52,902 56,654 7.1Sources: PricewaterhouseCoopers LLP, Wilkofsky Gruen Associates90 PwC | Global entertainment and media outlook: 2012–2016
  • Index of tables and charts Scope and methodology 92 Viewpoint 92 Summaries by segment and region 92 Industry overview | Index of tables and charts 91
  • Index of tables and charts†Scope and methodology Summaries by segment and regionScope Global industry summaryRegions/countries covered . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 Digital share of global E&M spending (%) . . . . . . . . . . . . . . . . . . . 48 Global mobile Internet subscribers . . . . . . . . . . . . . . . . . . . . . . . 48Methodology Global entertainment and media market by region . . . . . . . . . . . . . . 49Exchange rates per US$ (2011 average) . . . . . . . . . . . . . . . . . . . . 10 Entertainment and media market by country . . . . . . . . . . . . . . . . . 49Nominal GDP growth by country in North America (%) . . . . . . . . . . . 11 Global Internet access market: wired and mobile . . . . . . . . . . . . . . . 50Nominal GDP growth by country in EMEA (%) . . . . . . . . . . . . . . . . 12 Global Internet access spending by region: wired and mobile . . . . . . . . 50Nominal GDP growth by country in Asia Pacific (%) . . . . . . . . . . . . . 13 Leading Internet access markets . . . . . . . . . . . . . . . . . . . . . . . . . 51Nominal GDP growth by country in Latin America (%)  . . . . . . . . . . . 13 Global advertising by segment . . . . . . . . . . . . . . . . . . . . . . . . . . 52Global nominal GDP growth (%)  . . . . . . . . . . . . . . . . . . . . . . . . 14 Leading advertising markets . . . . . . . . . . . . . . . . . . . . . . . . . . . 53Consumer price inflation by country in North America (%) . . . . . . . . . 14 Global advertising by region . . . . . . . . . . . . . . . . . . . . . . . . . . . 53Consumer price inflation by country in EMEA (%) . . . . . . . . . . . . . . 15 Advertising and marketing in the United States . . . . . . . . . . . . . . . . 54Consumer price inflation by country in Asia Pacific (%)  . . . . . . . . . . . 16 Global consumer/end-user spending by segment . . . . . . . . . . . . . . . 55Consumer price inflation by country in Latin America (%) . . . . . . . . . . 16 Global consumer/end-user spending by region . . . . . . . . . . . . . . . . 56Global consumer price inflation (%) . . . . . . . . . . . . . . . . . . . . . . 16 Leading consumer/end-user markets . . . . . . . . . . . . . . . . . . . . . . 56 Global market by segmentViewpoint Global entertainment and media market by segment . . . . . . . . . . . . . 57Preface and economic context Asia Pacific Internet access spending . . . . . . . . . . . . . . . . . . . . . . 58 Global recorded music spending . . . . . . . . . . . . . . . . . . . . . . . . . 59Projected and actual global 2011 E&M growth by category (%) . . . . . . . 19 Global home video spending . . . . . . . . . . . . . . . . . . . . . . . . . . . 60Projected and actual global 2011 E&M growth by segment (%) . . . . . . . 19 Video game spending . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60Global E&M spending and nominal GDP growth (%) . . . . . . . . . . . . . 20 Digital consumer magazine spending . . . . . . . . . . . . . . . . . . . . . . 61The end of the digital beginning: Global electronic book sales . . . . . . . . . . . . . . . . . . . . . . . . . . . 62E&M companies reshape and Digital business-to-business spending . . . . . . . . . . . . . . . . . . . . . . 62retool for life in the new normal Global market by region2007–11 growth in online/mobile video games . . . . . . . . . . . . . . . . 26Internet subscriber growth (2012–16 CAGR) . . . . . . . . . . . . . . . . . 32 Entertainment and media market by segment . . . . . . . . . . . . . . . . . 64Most-engaged markets for social networking Entertainment and media market by country . . . . . . . . . . . . . . . . . 65(average monthly hours per user) . . . . . . . . . . . . . . . . . . . . . . . . 32 Internet access market: wired and mobile . . . . . . . . . . . . . . . . . . . 6592 PwC | Global entertainment and media outlook: 2012–2016
  • Internet access market: wired and mobile by country . . . . . . . . . . . . 65 Internet access market: wired and mobile . . . . . . . . . . . . . . . . . . . 80Advertising by segment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66 Internet access market: wired and mobile by country . . . . . . . . . . . . 81Advertising by country  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67 Advertising by segment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 82Consumer/end-user spending by segment . . . . . . . . . . . . . . . . . . . 68 Advertising by country . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 83Consumer/end-user spending (excluding Internet access) by country . . . 68 Consumer/end-user spending by segment . . . . . . . . . . . . . . . . . . . 84Entertainment and media market by segment . . . . . . . . . . . . . . . . . 70 Consumer/end-user spending (excluding Internet access) by country . . . 85Entertainment and media market by country . . . . . . . . . . . . . . . . . 71 Entertainment and media market by segment . . . . . . . . . . . . . . . . . 86Internet access market: wired and mobile . . . . . . . . . . . . . . . . . . . 72 Entertainment and media market by country . . . . . . . . . . . . . . . . . 87Internet access market: wired and mobile by country . . . . . . . . . . . . 73 Internet access market: wired and mobile . . . . . . . . . . . . . . . . . . . 87Advertising by segment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74 Internet access market: wired and mobile by country . . . . . . . . . . . . 87Advertising by country . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75 Advertising by segment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 88Consumer/end-user spending by segment . . . . . . . . . . . . . . . . . . . 76 Advertising by country . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 89Consumer/end-user spending (excluding Internet access) by country . . . 77 Consumer/end-user spending by segment . . . . . . . . . . . . . . . . . . . 90Entertainment and media market by segment . . . . . . . . . . . . . . . . . 79 Consumer/end-user spending (excluding Internet access) by country  . . . 90Entertainment and media market by country . . . . . . . . . . . . . . . . . 80†Key to symbols used in the tables and chartsp = preliminaryNA = not available— = no spending that yearTotals 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 PwCsviewpoint about industry trends. It does not approach the depth or granularity of the fullOutlook content, which provides more than 100,000 data points and in-depth commentaryfor 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
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