global entertainment and media outlook 2012 - 2016

www.pwc.com/outlook

Global entertainment
and media outlook
2012–2016
Industry overview
13th annual edition
June 2012


Global entertainment
and media outlook
2012–2016
Industry overview

13th annual edition
June 2012

Each year, PwC’s global team of entertainment and media experts
generates unbiased, in-depth forecasts for 13 industry segments.
Incorporating data from 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: 2012–2016
Prepared and edited by:

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Authored by:
Wilkofsky Gruen Associates Inc., a provider of global
research and analysis of the media, entertainment,
and telecommunications industries.
www.wilkofskygruen.com

Outlook editorial board:
For the PwC Entertainment &
Media Practice:
Deborah Bothun, Principal
James DePonte, Partner
Sean DeWinter, Partner
Marcel Fenez, Global Leader, Entertainment & Media
Nick George, Partner
Stefanie Kane, Partner
Alexandra Maclean, Global E&M Marketing Manager
Radhika Nanda, Global E&M Marketing Executive
Pauline Orchard, Global E&M Marketing Leader
Kenneth Sharkey, Partner
Phil Stokes, Partner

Many other professionals from the PwC
Entertainment & Media Practice reviewed
and added local expertise to this publication.

For Wilkofsky Gruen Associates Inc.:

Use of Outlook data

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details. AT-12-0120
Global entertainment and media outlook is a trademark owned by PricewaterhouseCoopers LLP.
ISBN 978-1-931684-27-9
Global entertainment and media outlook: 2012–2016, Industry overview
ISBN 978-1-931684-25-5
Global entertainment and media outlook: 2012–2016

David Wilkofsky, Partner

Arthur Gruen, Partner
Norman D. Eisenberg, Vice President

2

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PwC | Global entertainment and media outlook: 2012–2016


Contents: Industry overview
Letter from Global Leader, Entertainment & Media . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
PwC Entertainment & Media Practice—country contacts . . . . . . . . . . . . . . . . . . . . . . . . . . 5

Scope and methodology
Scope . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Methodology . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9

Viewpoint
Preface and economic context . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
The end of the digital beginning:
E&M companies reshape and
retool for life in the new normal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23

Summaries by segment and region
Global industry summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
Global market by segment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
Global market by region . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63

Index of tables and charts . . . . . . . . . . . . . . . . . . . . 91

This Industry Overview contains a top-line summary of industry data, along with PwC’s
viewpoint about industry trends. It does not approach the depth or granularity of the
full Outlook content, which provides more than 100,000 data points and in-depth
commentary for the 13 segments and 48 countries and areas covered.

For access to full data sets and commentary, visit the online
Outlook at www.pwc.com/outlook



Industry overview

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 contacts
Global

Marcel Fenez



Canada

Tracey Jennings



United States

Kenneth Sharkey



Austria

Bernd Hoffman

Belgium

Eddy Dams



Denmark

John Gabriel Sørensen



Finland

Harri Valkonen



France

Matthieu Aubusson de Cavarlay



Germany

Werner Ballhaus

Greece

Dinos Michalatos



Ireland

Paul O’Connor



Italy

Andrea Samaja



Netherlands

Ennel van Eeden



Norway

Eivind Nilsen

Portugal

José Vitorino



Spain

Virginia Arce



Sweden

Nicklas Kullberg



Switzerland

Patrick Balkanyi



United Kingdom

Phil Stokes

Czech Republic

Jiri Moser



Hungary

Manfred Krawietz



Poland

Adam Krason



Romania

John Webster



Russia

Natalia Yakovleva

Turkey

Murat Colakoglu



Eran Iohan



Middle East/North Africa

Fouad Alaeddin



South Africa

Vicky Myburgh



North America

EMEA
Western Europe

Central and Eastern Europe

Middle East/Africa
Israel
†

†Comprises Algeria, Bahrain, Egypt, Jordan, Kuwait, Lebanon, Libya, Morocco, Oman, Qatar, Saudi Arabia, Syria, and the United Arab Emirates.



Industry overview

5


Asia Pacific
Australia

David Wiadrowski



China

Marcel Fenez



Hong Kong

Marcel Fenez



India

Timmy Kandhari



Indonesia

Chrisna Wardhana



Japan

Akihiko Nakamura



Korea

Hum-Seok Park



Malaysia

Neil Proudlove



New Zealand

Keren Blakey



Pakistan

Sohail Hasan



Philippines

Mary Jade T. Roxas



Singapore

Charlotte Hsu



Taiwan

Han Wu



Thailand

Kajornkiet Aroonpirodkul



Vietnam

Ian Lydall



Argentina

Jesús Estevéz



Brazil

Estela Vieira



Chile

Rafael Ruano



Colombia

Diego Henao



Mexico

Luis Roberto Martínez del Barrio



Venezuela

Estela Vieira



Latin America

6

PwC | Global entertainment and media outlook: 2012–2016


Scope and methodology

Scope8
Methodology9


Scope
The Outlook reflects the collective wisdom of our large team of professionals
who work with entertainment and media companies around the world. It is a
unique resource for the industry, offering a five-year outlook for global consumer
spending and advertising revenues, along with insights into the technology,
government, political, and business trends driving those forecasts.

New additions to the 2012
Outlook
There are a number of data breakouts
included in this year’s Outlook that
were not provided in the past. We have
added trade shows to the “Businessto-Business” chapter, and concerts and
music festivals to the “Recorded Music”
chapter, which we renamed “Music.”
Also in “Music,” we are providing data
for unit sales of both physical and
digital recorded music, available in the
online edition. In “Consumer Magazine
Publishing,” we are providing per-issue
unit sales for print circulation and
paid unit sales for digital circulation,
also available in the online edition.
In “Filmed Entertainment,” we are
providing revenue data for electronic

home distribution through pay TV
providers and also for over-the-top
content accessed via the Internet.
Because video-on-demand and pay-perview are major components of electronic
home video distribution, we are now
including those revenue streams in
“Filmed Entertainment.” And because
“Television Subscriptions and License
Fees” focuses principally on distribution,
we shifted to “Filmed Entertainment”
video-on-demand and pay-per-view to
reflect payments for content.

Categories covered
• Internet access spending:
wired and mobile
• Internet advertising:
wired and mobile
• Television subscriptions
and license fees
• Television advertising
• Music
• Filmed entertainment
• Video games
• Radio
• Out-of-home advertising
• Consumer magazine publishing
• Newspaper publishing
• Consumer and educational

book  publishing
• Business-to-business

Regions/countries covered
North America

EMEA

Canada
United States

Western Europe
Austria
Belgium
Denmark
Finland
France
Germany
Greece
Ireland
Italy
Netherlands
Norway
Portugal
Spain
Sweden
Switzerland
United Kingdom

Asia Pacific

Central and Eastern Europe
Czech Republic
Hungary
Poland
Romania
Russia
Turkey
Middle East/Africa
Israel
Middle East/North Africa (MENA)†
South Africa

Latin America

Australia
China
Hong Kong
India
Indonesia
Japan
Malaysia
New Zealand
Pakistan
Philippines
Singapore
South Korea
Taiwan
Thailand
Vietnam

Argentina
Brazil
Chile
Colombia
Mexico
Venezuela

†Comprises Algeria, Bahrain, Egypt, Jordan, Kuwait, Lebanon, Libya, Morocco, Oman, Qatar, Saudi Arabia, Syria, and the United Arab Emirates.

8

PwC | Global entertainment and media outlook: 2012–2016


Methodology
How we derive the data

Forecast information

Historical information

Recent trends in industry performance
are analyzed, and the factors underlying
those trends are identified.

Historical information is obtained
principally from confidential and
proprietary sources. In instances when
third-party sources are consulted and
their information is used directly—

from such sources as government
agencies, trade associations, or related
entities that seek to have their data
disseminated in the public domain—
the sources of such information are
explicitly cited. In instances when the
information is used indirectly, as part of
the calculus for the historical data, the
sources are proprietary.
Each year, we look not only at data for
the most recent year but also at the
historical data to determine whether
there have been any revisions and
whether new sources have emerged
that provide a more complete or more
accurate picture of the market. In some
cases, that exercise leads us to revise
historical spending levels and growth
trends from one edition to the next.

The factors considered are economic,
demographic, technological,
institutional, behavioral, and
competitive, as well as certain other
drivers that may affect each of the
entertainment and media markets.
Models are then developed to quantify
the impact of each factor on industry
spending. Next, a forecast scenario for
each causative factor is created, and

the contribution of each factor on a
prospective basis is identified.
Those proprietary mathematical models
and analytic algorithms are applied in
the process to provide an initial array
of prospective values. Our professional
expertise and institutional knowledge
are then brought to bear in a review and
adjustment of those values if required.
The entire process is then examined for
internal consistency and transparency
vis-à-vis prevailing industry wisdom.
Forecasts for 2012–2016 are also
based on analysis of the dynamics of
each segment in each region and on
factors that affect those dynamics. We
provide compound annual growth rates
(CAGRs) that cover the 2012–2016
forecast period. In the calculation of
CAGRs, 2011 is the beginning year, with
five growth years during the forecast
period: 2012, 2013, 2014, 2015,
and 2016. The end year is 2016. The
formula is:

How we report the data
in each chapter
Segment spending consists of
advertising and end-user spending
related directly to entertainment

and media content. Each chapter
introduction begins with a definition of
the spending streams that are included
in that segment. We do not include
spending on hardware or on services
that may be needed to access content.
End-user spending is counted at the
consumer or end-user level, not at the
wholesale level, and includes retail
markups when applicable.
Advertising spending is measured net
of agency commissions in all territories
except the United States and Russia,
where gross advertising is measured to
be consistent with the way advertising
is generally reported.
In addition to annual-spending figures,
we also present data that are measured
at a single point in time, such as TV
subscriptions, Internet subscriptions,
mobile subscriptions, and newspaper
unit circulation. In those instances,
we show annual averages rather than
year-end totals because annual averages
more accurately connect the impact of
these figures to annual spending.
Inflation
Across all chapters, figures are reported
in nominal terms reflecting actual
spending transactions and therefore

include the effects of inflation.

CAGR = 100 * [(Value in 2016/Value
in 2011)1/5 – 1]

Key to symbols used in the tables and charts
p = preliminary
NA = not available
— = no spending that year
Totals in tables and charts may not total arithmetically due to rounding.



Industry overview | Methodology9


Exchange rates
All figures are presented in US dollars
by using the average 2011 exchange
rate held constant for each historical
year and forecast year. This means
the figures reflect industry trends and

are not distorted by fluctuations in
international exchange rates.
The exchange rates used for the
individual countries in each region are
outlined in the following tables.

Exchange rates per US$ (2011 average)

Exchange rates per US$ (2011 average)

Currency

Exchange rate

United States

Dollar

1.0000

Western Europe

Canada

Dollar

0.9888

Currency

Exchange rate

Austria

Euro

0.7188

Belgium

Euro

0.7188

Krone

5.3552

Finland

North America

Euro

0.7188

France

Euro

0.7188

EMEA

Denmark

Exchange rates per US$ (2011 average)

Currency

Exchange rate

Dollar

0.9687

Germany

Euro

0.7188

Yuan (renminbi)

6.4544

Greece

Euro

0.7188

Dollar

7.7839

Ireland

Euro

0.7188

India

Rupee

46.8466

Italy

Euro

0.7188

Indonesia

Rupiah

8,779.0000

Netherlands

Euro

0.7188

Yen

79.7000

Norway

Kroner

5.6008

Ringgit

3.0528

Portugal

Euro

0.7188

Dollar

1.2629

Spain

Euro

0.7188

Rupee

85.6576

Sweden

Krona

6.4873

Philippines

Peso

43.1844

Switzerland

Franc

0.8866

Singapore

Dollar

1.2567

Pound sterling

0.6235

Won

1,105.7300

Dollar

29.2632

Czech Republic

Koruna

17.6870

Thailand

Baht

30.4944

Hungary

Forint

200.6790

Vietnam

Dong

20,453.6000

Zloty

2.9585

New lei

3.0446

Russia

Ruble

29.3303

Turkey

New lira

1.6774

New shekel

3.5603

US dollar

1.0000

Rand

7.2313

Asia Pacific
Australia
China
Hong Kong

Japan
Malaysia
New Zealand
Pakistan

South Korea
Taiwan

United Kingdom
Central and Eastern Europe

Poland
Romania

Exchange rates per US$ (2011 average)
Currency

Exchange rate

Argentina

Peso

4.1213

Brazil

Real

1.6698

Chile

Peso

481.5800

Colombia

Peso

1,827.4900

Mexico

Peso

12.4183

Bolivar fuerte

4.2897

Latin America

Venezuela

10

PwC | Global entertainment and media outlook: 2012–2016

Middle East/Africa
Israel
Middle East/North
Africa (MENA)†
South Africa

†Comprises Algeria, Bahrain, Egypt, Jordan, Kuwait, Lebanon, Libya, Morocco,
Oman, Qatar, Saudi Arabia, Syria, and the United Arab Emirates.
Figures are estimated in US dollars.


Because all figures are shown as actual
spending, with the effects of inflation
included, nominal GDP growth has an
important influence on entertainment

and media spending. The following
tables show historical and projected
growth rates for nominal GDP for the
individual countries in each region.

Nominal GDP growth by country in North America (%)
2007

2008

2009

2010

2011p

2012

2013

2014

2015

2016

2012–16
CAGR

United States

4.9

2.2

–1.7

3.8

4.5

4.0

4.4

5.1

5.2

5.1

4.8

Canada

6.4

4.6

–4.7

4.9

5.0

4.1

4.3

4.7

4.5

4.4

4.4

Total

5.1

2.4

–2.0

3.9

4.6

4.0

4.4

5.1

5.1

5.0

4.7

North America

View data in your local currency. Visit the online Outlook
at www.pwc.com/outlook



Industry overview | Methodology11


Nominal GDP growth by country in EMEA (%)
2007

2008

2009

2010

2011p

2012

2013

2014

2015

2016

2012–16
CAGR

Austria

5.8

4.1

–3.1

3.5

6.0

3.0

2.9

3.4

3.5

3.8

3.3

Belgium

5.3

2.9

–1.6

3.9

5.4

1.7

2.7

3.0

3.2

3.5

2.8

Denmark

3.9

2.7

–4.9

4.4

4.0

2.8

4.0

4.2

4.5

4.3

3.9

Finland

8.5

2.8

–7.3

4.4

6.2

3.6

4.4

4.6

4.8

5.0

4.5

France

4.9

2.7

–2.0

2.0

3.9

1.4

2.6

3.0

2.9

3.5

2.7

Germany

4.6

2.0

–3.4

4.7

4.9

3.7

4.0

3.9

3.5

2.7

3.6

Greece

7.5

4.3

–0.8

–2.0

–2.7

–3.6

–0.4

0.6

1.6

2.7

0.2

Ireland

6.8

–5.0

–11.3

–3.6

2.0

1.3

2.2

2.6

3.2

3.5

2.6

Italy

4.0

1.4

–3.0

2.3

3.3

–0.6

0.9

2.1

2.8

3.1

1.6

Netherlands

5.3

4.8

–4.3

3.1

4.1

2.9

3.4

3.7

3.0

2.5

3.1

Norway

5.2

10.8

–5.4

5.2

3.4

4.0

4.3

4.6

4.8

5.1

4.5

Portugal

5.3

1.9

–2.3

2.7

1.1

–2.1

0.4

1.2

1.7

2.6

0.7

Spain

7.1

3.2

–3.1

1.8

3.7

2.1

2.2

2.3

3.1

3.8

2.7

Sweden

6.2

2.5

–3.6

6.9

7.2

2.9

3.5

4.4

4.2

4.3

3.8

Switzerland

6.2

4.4

–1.6

2.0

2.5

0.7

2.9

3.1

2.9

3.4

2.6

United Kingdom

5.8

2.9

–3.5

4.4

5.8

3.5

4.2

4.2

4.5

4.4

4.2

Western Europe total

5.3

2.7

–3.3

3.2

4.3

2.1

3.0

3.3

3.4

3.5

3.1

Czech Republic

9.7

4.3

–1.7

1.2

4.1

3.7

4.5

4.8

5.7

5.2

4.8

Hungary

6.7

5.7

–2.6

4.1

5.6

5.1

4.6

5.1

5.8

6.3

5.4

Poland

11.0

8.4

5.3

5.1

8.0

5.2

5.8

5.9

6.2

6.1

5.8

Romania

39.1

19.7

–20.1

–1.0

7.8

5.0

5.6

7.0

7.1

7.0

6.3

Russia

22.0

27.0

–5.7

11.1

12.7

9.9

10.1

10.7

10.4

9.8

10.2

Turkey

11.2

12.7

0.2

18.3

12.9

10.2

8.7

9.0

8.7

9.1

9.1

Central and Eastern
Europe total

16.9

17.7

–3.4

10.1

11.0

8.5

8.4

8.9

8.9

8.7

8.7

6.0

5.2

5.9

5.8

8.4

5.3

5.8

5.8

6.0

5.9

5.7

Middle East/North
Africa (MENA)†

14.7

22.0

–11.1

10.4

11.5

9.2

9.5

9.7

10.0

9.8

9.6

South Africa

14.1

13.2

6.1

8.8

8.7

11.6

9.2

9.0

9.2

9.3

9.7

Middle East/

Africa total

13.4

18.2

–6.1

9.5

10.5

9.2

9.0

9.1

9.4

9.3

9.2

7.2

5.8

–3.5

4.7

5.8

3.7

4.4

4.8

5.0

5.0

4.6

EMEA
Western Europe

Central and Eastern Europe

Middle East/Africa
Israel

EMEA total

†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 (%)
2007

2008

2009

2010

2011p

2012

2013

2014

2015

2016

2012–16
CAGR

9.2

9.1

0.6

5.5

4.7

6.2

6.2

6.1

5.7

6.0

6.0

19.6

18.1

8.6

16.7

14.9

12.3

12.5

12.8

12.6

12.7

12.6

9.6

3.8

–3.3

7.8

11.8

8.9

8.4

7.6

8.0

8.3

8.2

India

16.1

12.0

17.3

20.3

16.4

14.2

13.8

14.0

13.8

12.7

13.7

Indonesia

18.3

25.3

13.2

14.6

12.5

13.2

12.5

12.7

13.0

13.2

12.9

Asia Pacific
Australia
China
Hong Kong

1.6

–2.0

–6.1

3.2

–0.9

2.0

1.5

1.7

2.1

2.1

1.9

11.8

15.4

–8.3

12.7

8.6

7.7

7.7

7.5

7.5

7.7

7.6

7.9

1.7

1.2

4.0

6.5

6.6

5.7

5.2

5.3

5.6

5.7

Pakistan

13.8

18.1

24.4

15.1

16.9

18.3

17.0

16.2

16.5

16.7

16.9

Philippines

10.2

11.4

3.6

10.9

9.4

9.2

9.1

9.3

9.5

9.7

9.4

Singapore

15.6

2.7

–3.1

17.7

9.2

7.3

6.7

6.5

6.7

6.8

6.8

South Korea

7.3

5.3

3.6

9.3

8.0

6.7

6.6

7.1

7.2

6.8

6.9

Taiwan

1.8

10.5

–2.8

11.9

7.1

6.9

7.0

7.1

7.3

7.6

7.2

Thailand

8.7

6.4

–0.4

11.7

7.6

9.1

9.2

8.6

8.7

8.8

8.9

Vietnam

17.4

29.8

11.7

16.6

25.7

19.2

13.2

13.1

12.9

13.2

14.3

9.1

7.6

2.3

10.8

8.5

8.6

8.6

9.0

9.2

9.4

9.0

Japan
Malaysia
New Zealand

Total

Nominal GDP growth by country in Latin America (%) 
Latin America

2007

2008

2009

2010

2011p

2012

2013

2014

2015

2016

2012–16
CAGR

Argentina

24.1

27.8

10.3

25.9

17.8

15.2

14.7

15.0

12.9

12.6

14.1

Brazil

12.3

13.9

5.1

15.4

9.8

9.3

9.4

9.1

8.8

8.7

9.1

Chile

10.3

3.9

2.3

13.8

9.8

7.9

7.7

7.7

7.9

8.0

7.8

Colombia

27.5

17.3

–4.5

24.0

8.4

7.5

7.7

7.7

7.8

7.9

7.7

9.2

7.8

–2.3

10.5

7.3

6.6

6.5

6.9

6.7

6.6

6.7

Venezuela

23.5

37.3

4.8

26.3

29.3

28.7

26.5

26.0

24.9

25.1

26.2

Total

13.6

14.5

2.7

16.4

11.6

11.1

11.2

11.5

11.3

11.6

11.3

Mexico



Industry overview | Methodology13


Global nominal GDP growth (%) 
2007

2009

2010

2011p

2012

2013

2014

2015

2016

2012–16
CAGR

7.5

Global

2008
5.8

–1.0

7.1

6.7

5.9

6.3

6.8

7.0

7.1

6.6

The following tables show historical and
projected growth rates for consumer
price inflation for the individual
countries in each region.
Consumer price inflation by country in North America (%)
2007

2008

2009

2010

2011p

2012

2013

2014

2015

2016

2012–16
CAGR

United States

2.9

3.8

–0.4

1.6

2.9

2.0

1.9

2.2

2.3

2.3

2.1

Canada

2.2

2.4

0.3

1.8

2.8

2.1

2.0

2.1

2.0

2.0

2.0

Total

2.8

3.7

–0.3

1.6

2.9

2.0

1.9

2.2

2.3

2.2

2.1

North America

View year-on-year growth for every data line. Visit the online
Outlook at www.pwc.com/outlook

14

PwC | Global entertainment and media outlook: 2012–2016


Consumer price inflation by country in EMEA (%)
2007

2008

2009

2010

2011p

2012

2013

2014

2015

2016

2012–16
CAGR

Austria

2.2

3.1

0.5

1.7

3.1

2.8

2.4

2.3

2.1

2.2

2.4

Belgium

1.8

4.5

–0.1

2.2

3.2

2.0

2.0

2.0

2.1

2.1

2.0

Denmark

1.7

3.4

1.4

2.3

2.5

1.7

2.3

2.2

2.0

1.9

2.0

Finland

2.5

4.1

0.0

1.3

3.4

3.0

2.5

2.3

2.1

2.1

2.4

France

1.5

2.8

0.1

1.7

2.2

1.8

1.6

1.9

1.3

1.9

1.7

Germany

2.3

2.6

0.4

1.2

2.3

2.8

2.5

2.3

1.7

1.3

2.1

Greece

2.9

4.1

1.2

4.7

2.8

1.3

1.2

1.1

1.3

1.4

1.3

Ireland

4.9

4.0

–4.5

–1.6

1.1

2.3

2.5

2.1

2.0

2.1

2.2

Italy

1.7

3.4

0.7

1.6

2.7

0.8

1.5

1.7

1.9

2.0

1.6

Netherlands

1.6

2.4

1.2

0.9

2.3

2.6

2.2

2.1

1.4

0.7

1.8

Norway

0.8

3.7

2.2

2.3

1.6

2.0

2.1

2.3

2.5

2.5

2.3

Portugal

2.8

2.6

–0.8

1.4

3.3

1.3

1.4

1.5

1.6

1.7

1.5

Spain

2.8

4.0

–0.4

2.0

3.1

2.8

2.0

1.4

1.6

1.8

1.9

Sweden

2.2

3.4

–0.3

1.9

2.9

1.8

1.8

2.0

1.9

2.0

1.9

Switzerland

2.6

3.3

–3.9

0.7

0.5

0.1

1.3

1.3

1.4

1.7

1.1

United Kingdom

4.3

4.0

–0.5

3.3

4.8

2.5

2.1

2.0

2.1

2.1

2.2

Western Europe total

2.4

3.3

0.0

1.8

2.8

2.0

2.0

2.0

1.7

1.8

1.9

Czech Republic

3.0

6.4

1.1

1.4

2.0

3.0

2.5

2.4

2.3

2.2

2.5

Hungary

7.9

6.1

4.2

4.9

4.0

4.8

3.4

3.2

3.3

3.0

3.5

Poland

2.3

4.4

3.9

2.7

4.1

2.7

2.6

2.5

2.6

2.6

2.6

Romania

4.9

7.8

5.6

6.1

6.3

3.5

3.2

3.1

3.1

3.5

3.3

Russia

9.0

14.1

11.7

6.9

8.3

6.5

6.4

6.6

6.2

5.7

6.3

Turkey

8.7

10.4

6.3

8.6

5.9

8.3

5.5

5.2

4.6

4.9

5.7

Central and Eastern
Europe total

6.4

9.7

7.9

6.0

6.5

6.0

5.3

5.4

5.0

4.9

5.3

EMEA
Western Europe

Central and Eastern Europe

 

Middle East/Africa
Israel

0.4

4.7

3.3

2.7

3.4

1.5

1.9

2.0

2.2

2.5

2.0

Middle East/North
Africa (MENA)†

5.7

10.0

3.6

4.6

5.6

5.7

5.5

5.5

5.7

5.9

5.7

South Africa

7.2

11.5

7.1

4.3

5.0

5.5

5.4

5.3

5.4

5.7

5.5

Middle East/
Africa total

5.0

9.5

4.2

4.3

5.2

5.2

5.1

5.2

5.4

5.6

5.3

EMEA 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 | Methodology15

Consumer price inflation by country in Asia Pacific (%) 
2007

2008

2009

2010

2011p

2012

2013

2014

2015

2016

2012–16
CAGR

Australia

2.3

4.4

1.8

2.8

3.2

2.8

3.0

2.8

2.6

2.7

2.8

China

4.8

5.9

–0.7

3.3

5.6

3.9

3.9

3.7

3.6

3.8

3.8

Hong Kong

1.9

4.3

0.6

2.4

5.5

4.5

3.5

3.0

2.6

2.7

3.3

India

6.3

8.4

10.9

9.6

9.0

6.5

6.0

5.8

5.5

5.2

5.8

Indonesia

9.1

11.0

2.8

6.9

5.7

6.5

5.4

5.3

5.2

5.0

5.5

Japan

0.1

1.4

–1.4

–0.7

–0.4

–0.1

0.2

0.5

0.6

0.8

0.4

Malaysia

2.0

5.5

0.6

1.7

3.2

2.5

2.4

2.4

2.3

2.2

2.4

New Zealand

2.6

3.8

1.9

1.8

4.4

2.7

2.4

2.4

2.3

2.3

2.4

Pakistan

7.6

20.3

13.6

13.9

13.9

14.0

12.0

10.5

10.0

10.0

11.3

Philippines

2.8

9.3

3.3

4.5

4.5

4.1

4.0

4.0

4.0

4.0

4.0

Singapore

2.1

6.6

0.5

2.8

3.7

2.9

2.4

2.1

2.0

2.0

2.3

South Korea

2.6

4.6

2.8

3.0

4.2

3.2

3.0

2.9

2.9

3.0

3.0

Taiwan

2.3

3.5

–0.9

1.0

1.8

1.8

2.0

2.0

2.1

2.1

2.0

Thailand

2.2

5.4

–0.9

3.3

4.0

4.1

4.2

3.5

3.5

3.4

3.7

Vietnam

8.3

23.1

7.1

8.9

18.8

12.1

6.0

5.5

5.4

5.7

6.9

Total

1.9

3.9

0.2

2.6

4.0

3.4

3.5

3.7

3.6

3.9

3.6

Asia Pacific

Consumer price inflation by country in Latin America (%)
2007

2008

2009

2010

2011p

2012

2013

2014

2015

2016

2012–16
CAGR

Argentina

8.8

8.6

6.3

10.4

10.8

11.8

12.7

11.0

9.0

8.5

10.6

Brazil

3.6

5.6

4.9

5.0

6.4

5.6

5.2

4.7

4.5

4.4

4.9

Chile

4.3

8.8

1.7

1.2

3.1

3.1

3.0

3.0

3.0

3.1

3.0

Colombia

5.6

6.9

4.2

2.3

3.3

2.9

3.1

3.0

3.0

3.0

3.0

Latin America

4.0

Venezuela
Total

5.2

5.3

4.2

3.3

3.4

3.2

3.4

3.3

3.1

3.3

18.8

31.4

28.6

29.1

25.8

24.3

23.9

23.5

22.9

21.1

23.1

4.3

Mexico

6.4

6.2

6.5

7.8

8.6

9.6

10.9

12.1

13.3

10.9

Global consumer price inflation (%)
2007
Global

16

2008

2009

2010

2011p

2012

2013

2014

2015

2016

2012–16

CAGR

2.5

4.0

0.8

2.6

3.8

3.5

3.5

4.0

4.2

4.7

4.0

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 progresses
The global economy began to recover in
2010 from its steep decline in 2009 and
continued to advance in 2011, although
the hoped-for pickup in momentum did
not materialize consistently around the
globe. Global entertainment and media
(E&M) spending rose 4.9 percent in
2011—a bit faster than the 4.5 percent
increase in 2010 but still below gains
in prior expansion years. Advertising

increased 3.6 percent, down from
the 7.0 percent gain in 2010 that was
augmented by advertising associated
with the FIFA World Cup and Winter
Olympics and by the rebound from a
sluggish 2009. Consumer/end-user
spending rose 2.0 percent, up from the
1.3 percent rise in 2010. Internet access
recorded the largest improvement, rising
by 15.1 percent from the 10.0 percent
gain 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

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

–5.7

–2.4

Filmed entertainment

5.1

0.1

Video games

6.8

2.2

Consumer magazine
publishing

0.6

–0.8

–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

Internet access:
wired and mobile

Recorded music‡
††

Newspaper publishing

†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 predicted a 3.1 percent increase in global
advertising, which was a bit lower
than the 3.6 percent actual increase.
Consumer/end-user spending rose
2.0 percent, a somewhat smaller gain
than our 3.4 percent projection. We
expected Internet access spending to
increase by 8.8 percent in 2011, but
actual growth was nearly twice as fast,
with a 15.1 percent increase. A jump
in infrastructure spending combined
with a surge in smart-device penetration fueled large gains in mobile
access and propelled the overall access
market. Overall global E&M growth of
4.9 percent was marginally ahead of
the 4.3 percent increase we projected
last year.

On a segment basis, in addition to
Internet access, Internet advertising,

recorded music, and out-of-home
advertising substantially outperformed
our expectations in 2011, while filmed
entertainment, video games, and
consumer and educational books grew
less than we expected. TV subscriptions and license fees, TV advertising,
and business-to-business materially
matched our forecasts, while consumer
magazine and newspaper publishing
and radio were within two percentage
points of our projections.
In recorded music, declines in physical
spending moderated in a number of
countries, most notably in the United
States, leading to a smaller decline than
we expected and hinting that a natural

Global E&M spending and nominal GDP growth (%)
10

5

0

–5

–10

–15
2007

2008

2009

2010

2011

2012

Global nominal GDP

2014

Global advertising

Global consumer/end user

2013

Global E&M spending

Sources: PricewaterhouseCoopers LLP, Wilkofsky Gruen Associates

20

PwC | Global entertainment and media outlook: 2012–2016

2015

2016

floor may exist in terms of spending
on physical music. In filmed entertainment, box office spending in a number
of countries was disappointing, reflecting less-appealing movies. In home
video, Blu-ray gains were smaller than
expected, while DVDs were pretty much
as anticipated, with the result that
overall physical spending declined. In
video games, growth in online gaming
cut into the console market, leading to
slower growth in overall spending than
we expected. In consumer and educational books, lower-priced electronic
books surged in 2011, cutting into print
sales. Overall spending declined even
as reading picked up.


Looking forward
The economic prospects in the short
term are mixed. Europe’s economy
remains weak, North America appears
to be improving, Latin America is
relatively healthy, and the People’s
Republic of China (PRC) and India
continue to record strong, if moderating, growth. We expect the varied
economic prospects to be reflected in
E&M spending growth in 2012. We
project Europe, Middle East, Africa

(EMEA) to be the slowest-growing
region, with a 3.5 percent increase,
which will be less than the 5.2 percent
advance in 2011. Latin America will
be the fastest-growing region, with a
9.2 percent gain, nearly matching the
9.5 percent gain in 2011. Asia Pacific
will increase by 6.6 percent. Excluding
the relatively sluggish Japanese market,
the remainder of Asia Pacific is expected
to grow by 9.0 percent. North America
will grow by a projected 5.7 percent in
2012, helped by an inflow of electionrelated advertising in the United States
as well as advertising associated with
the Summer Olympics.

Over the longer run, we expect the
economic climate to improve, which
will lead to faster growth in E&M
spending during the next five years
compared with the 2008–11 period.
Nevertheless, we expect E&M growth
to continue to lag nominal GDP growth,
principally because of the ongoing shift
from higher-priced physical distribution
to lower-priced digital distribution. As
the experience of the book publishing
industry in 2011 reveals, the shift in
usage from traditional media to digital
media limits growth because end-user

prices for digital content are generally
lower than prices for physical content.
During the next five years, we project
that E&M spending will grow at a
5.7 percent compound annual rate—
below the projected 6.6 percent compound annual increase in nominal GDP.

E&M spending is affected by the
economy, and countries experiencing
healthy economic growth will see
large gains in E&M spending. By
contrast, weak economies will dampen
growth in other countries. We expect
gains averaging less than 3 percent
annually in Japan, Germany, Ireland,
Denmark, Spain, and Greece and
gains averaging less than 3.5 percent
compounded annually in the UK, Italy,
France, Austria, the Netherlands,
and Switzerland. Full data on E&M
spending by country and major
category can be found in the sections
on regional spending.

The average growth rate masks wide
disparities in growth, resulting from
economic disparities around the world.
A number of countries in Asia and
Latin America along with Middle East/
North Africa (MENA), South Africa,

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 and
retool 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
even more important milestone for the
E&M industry is upcoming: the onset of
the digital new normal. Digital is now
embedded in business as usual. And
as digital moves to the heart of many

media companies and begins to present
the greatest opportunities for growth,
what previously looked like a wide gap
between old media models and new
ones is being bridged.
Companies are planning out and executing their strategies to cross to the new
normal, and with that, we’re hearing
clearer and more-consistent language
from industry CEOs as they articulate
the new landscape. That clearer language signals that the initial uncertainty
triggered by digital migration is giving
way to a sharper focus on identifying,
choosing, and executing the business
models, organizational structures, and
skill sets that will harness new consumer
behaviors to deliver rising future value
in the changed environment.



Digital migration has two main implications for E&M companies: One is
the need to make clear and committed choices about the role or roles
companies should play in the digital
value chain. The other is that behaviors
are changing rapidly and irreversibly
within organizations and organizations’
customer bases—and leaders need to
understand and harness those behavioral changes to grow future revenues.

Three global shifts

Changing consumer behavior is driving
both of the implications. Consumers’
ongoing migration to digital modes of
consumption got accelerated by the economic downturn. And it is now continuing to gain pace during the recovery,
fueled by three forces now commonly
summarized as “social, mobile, and
local,” to which others add, variously,
“global” and “commercial.” Together
those forces will help companies tap
into an expanding pool of value: this
edition of Global entertainment and
media outlook projects that total global
E&M revenues will rise from $1.6 trillion
in 2011 to $2.1 trillion by 2016.

The Outlook also confirms that the
parallel global shifts we’ve highlighted
in recent years will continue to play
out and strengthen through 2016, with
value shifting as follows.
• From print to digital: For example,
electronic books’ share of total global
spending on consumer and educational books will rise from 5 percent
in 2011 to 18 percent in 2016.
• From fixed to mobile-driven consumption: Mobile Internet access
increased from 26 percent of total
Internet access spending in 2007
to 40 percent in 2011—and will
account for 45 percent in 2016.
• From West to East, North to South:

During the next five years, total
E&M revenue growth in the East
(Central and Eastern Europe/Asia
Pacific) will average 7.2 percent
compounded annually, compared
with a 4.3 percent CAGR for the
West (North America/Western
Europe). And growth in the South
(Latin America/Middle East/Africa)
will average 10.0 percent compounded annually—more than twice
the 4.5 percent CAGR in the North
(North America/Europe).

Industry overview | The end of the digital beginning

23


Looking beyond the
impact of digital…

…to map out the industry’s
future topography

In last year’s Industry Overview, we
noted that those shifts—spearheaded
by digital migration—were driving
change in three dimensions: the
empowered consumer, the involved
advertiser, and transformation of

the business for digital. The outcome
of that transformation was a new
type of organization we termed the
Collaborative Digital Enterprise (CDE),
heralding a wider shift to a collaborative ecosystem-based economy.

Against this background, we believe
the reshaping of the industry will take
place based on the perspectives of three
main groups:

The developments of the past year reinforce that view while also underlining
the fact that talking specifically about
“digital” increasingly misses the point.
Digital marketing, for example, now
means marketing in a digital world. And
as digital becomes the new normal, its
rising penetration ceases to be a topic for
discussion. What matters is how companies capitalize on it and operate within it.

24

• For consumers: The creation of
more-compelling, more-immersive,
and increasingly shared experiences
by understanding what connected
consumers want—by finding the
right little data amid the big data.
• For advertisers and value chain
partners: The design of new

business models that reinvent
and expand the value proposition of advertising and content
through innovation.

PwC | Global entertainment and media outlook: 2012–2016

• For the industry: Development of
the right organizational and operational models to understand and
harness new behaviors inside and
outside organizations in order to
grow their revenues and/or margins
in the new normal.
We’ll examine each of those perspectives in turn.