Music
Summary 266 268
Europe, Middle East, Africa (EMEA)
273
Asia Pacific
282
Fo
r
Pr
es
s
U
n o
se
Latin America
ly
North America
289
Summary Music The music market consists of recorded music and live music. Recorded music comprises spending on physical formats—albums, single sound recordings, and music videos—as well as digital distribution. Digital distribution consists of music distributed to mobile devices and music downloaded from the Internet through licensed services or app stores. Revenue from subscription and advertiser-supported streaming services is also included.
n
ly
For the first time, we have included estimates and forecasts for live music. Live music consists of concerts and music festivals and comprises end-user spending on tickets as well as sponsorships.
se
o
The recorded music market includes neither subscription fees paid to satellite radio providers nor advertising generated by Internet radio services, nor does it include revenues from music publishing.
Pr
Fo
Global spending on music rose 1.3 percent in 2011—the first increase in years, as growth in concerts and music festivals offset a modest decline in recorded music. Recorded music spending fell only 2.4 percent in 2011 compared with decreases averaging more than 8 percent annually in prior years. Beginning in 2013, growth in digital spending will offset the ongoing decline in physical spending, leading to a rebound in overall spending on recorded music. Even with recorded music increasing in 2013, spending will remain 38 percent lower than in 1999. Overall global spending on music, including concerts and music festivals, will increase at a 3.7 percent compound annual rate to $59.7 billion in 2016 from $49.9 billion in 2011.
$16.5 billion in 2011. Asia Pacific will increase at a 2.2 percent compound annual rate to $12.3 billion in 2016 from $11 billion in 2011. Excluding Japan, growth in Asia Pacific will average 7.3 percent compounded annually. Latin America will increase at a 4.2 percent compound annual rate to $1.5 billion in 2016 from $1.3 billion in 2011.
r
Market size and growth by region
es
s
U
Spending is measured at retail, which can be substantially higher than the wholesale or trade value revenues often reported.
EMEA, the largest region at $21.1 billion in 2011, will expand at a 3.0 percent compound annual rate to $24.4 billion in 2016. North America was the fastest-growing region in 2011, with a 3.2 percent increase, and will be the fastest growing during the next five years, averaging 5.4 percent on a compound annual basis to $21.5 billion in 2016 from
266
Market size and growth by component Digital distribution will increase from $7.7 billion in 2011 to $14 billion in 2016, a 12.6 percent compound annual advance. Physical distribution will decline at a 6.7 percent compound annual rate to $11.3 billion in 2016 from $16 billion in 2011. Globally, digital distribution will surpass physical distribution in 2015. Overall spending on recorded music will begin to expand in 2013 and will rise to $25.3 billion in 2016 from $23.7 billion in 2011, a 1.3 percent increase compounded annually. Spending on concerts and music festivals will increase from $26.2 billion in 2011 to $34.5 billion in 2016, a 5.6 percent compound annual advance.
PwC | Global entertainment and media outlook: 2012–2016
Principal drivers New streaming services will fuel growth in digital distribution, helped by broadband, smartphone, and tablet penetration growth. The adoption of graduated-response systems, which involve Internet service providers’ issuing warnings to file sharers that escalate in severity with the ultimate threat of disconnecting a user’s Internet access, is proving to be effective in limiting peer-to-peer file sharing. The digital market also will benefit from social media activity, which stimulates interest in acts, contributing to the growth in downloads. Physical distribution will continue to decline during the latter part of the forecast period but at moderating rates as the remaining physical market increasingly comes to consist of people who prefer music in physical formats. In Asia Pacific, piracy has decimated the physical market in a number of countries, which will limit future declines. The touring market rebounded in 2011, and local festivals contributed to the expansion. We expect a healthy festival market to drive growth during the next five years. Growth in 360 deals with labels will enhance the market, as labels will be actively promoting tours as they share in performance revenues.
Global music market by region (US$ millions)
% Change Asia Pacific % Change Latin America % Change Total % Change
2010
2011p
2012
2013
2014
2015
2016
2012–16 CAGR
19,777
18,291
17,879
16,009
16,528
17,247
18,103
19,101
20,241
21,473
–3.8
–7.5
–2.3
–10.5
3.2
4.4
5.0
5.5
6.0
6.1
5.4
23,544
22,698
22,407
20,925
21,062
21,441
22,018
22,734
23,527
24,409
–3.8
–3.6
–1.3
–6.6
0.7
1.8
2.7
3.3
3.5
3.7
3.0
12,136
11,972
11,605
11,096
11,037
11,138
11,303
11,563
11,911
12,316
1.0
–1.4
–3.1
–4.4
–0.5
0.9
1.5
2.3
3.0
3.4
2.2
1,336
1,260
1,263
1,240
1,259
1,298
1,347
1,412
1,462
1,543
–7.5
–5.7
0.2
–1.8
1.5
3.1
3.8
4.8
3.5
5.5
4.2
56,793
54,221
53,154
49,270
49,886
51,124
52,771
54,810
57,141
59,741
–2.9
–4.5
–2.0
–7.3
1.3
2.5
3.2
3.9
4.3
4.6
3.7
2012
2013
2014
2015
2016
2012–16 CAGR
2008
Recorded music
22,954
% Change
–13.6
–15.5
Digital distribution
5,173
6,204
% Change Concerts and music festivals % Change Total % Change
42.0 32,324
2010
2011p
17,163
15,969
14,610
13,506
12,603
11,873
11,308
–13.0
–14.1
–7.0
–8.5
–7.6
–6.7
–5.8
–4.8
–6.7
6,799
7,114
7,731
8,864
10,063
11,326
12,631
13,966
19.9
9.6
4.6
8.7
14.7
13.5
12.6
11.5
10.6
12.6
29,158
26,773
24,277
23,700
23,474
23,569
23,929
24,504
25,274
r
Total recorded music
Fo
% Change
19,974
Pr
27,151
Physical distribution
2009
es
2007
s
Global music market by component (US$ millions)
U
Sources: PricewaterhouseCoopers LLP, Wilkofsky Gruen Associates
Component
ly
EMEA
2009
n
% Change
2008
o
North America
2007
se
Region
–7.8
–9.8
–8.2
–9.3
–2.4
–1.0
0.4
1.5
2.4
3.1
1.3
24,469
25,063
26,381
24,993
26,186
27,650
29,202
30,881
32,637
34,467
4.5
2.4
5.3
–5.3
4.8
5.6
5.6
5.7
5.7
5.6
5.6
56,793
54,221
53,154
49,270
49,886
51,124
52,771
54,810
57,141
59,741
–2.9
–4.5
–2.0
–7.3
1.3
2.5
3.2
3.9
4.3
4.6
3.7
Sources: PricewaterhouseCoopers LLP, Wilkofsky Gruen Associates
Music | Summary 267
North America The outlook in brief • Streaming services will boost digital spending.
• Physical distribution will drop from $3.7 billion in 2011 to $2.4 billion in 2016, an 8.1 percent compound annual decrease.
• Declines in physical distribution will remain at single-digit levels as the remaining market increasingly consists of people who prefer physical music.
• Digital distribution will overtake physical distribution in 2012 and will rise at an 11.7 percent compound annual rate to $5.7 billion in 2016 from $3.3 billion in 2011.
• New venues and growth in festivals will propel spending on live music.
• Total spending on recorded music will begin to expand in 2012 and will rise at a 3.1 percent compound annual rate to $8.2 billion in 2016 from $7 billion in 2011.
Overview
n ly
• Spending on concerts and music festivals will expand at a 6.9 percent compound annual rate from $9.5 billion in 2011 to $13.3 billion in 2016.
• The recorded music market fell 0.9 percent in 2011, the smallest decrease in years as growth in digital distribution nearly offset a moderating decline in physical spending.
se
o
• The overall music market will total $21.5 billion in 2016 from $16.5 billion in 2011, a 5.4 percent increase compounded annually.
2007
2008
2009
2010
2011p
2012
2013
2014
2015
2016
4,050
3,387
3,094
2,845
2,629
2,448
8,574
6,257
4,990
3,726
Digital distribution
2,700
3,010
3,090
3,025
3,288
3,690
4,143
4,650
5,180
5,727
11,274
9,267
8,080
7,075
7,014
7,077
7,237
7,495
7,809
8,175
8,503
9,024
9,799
8,934
9,514
10,170
10,866
11,606
12,432
13,298
19,777
18,291
16,009
16,528
17,247
18,103
19,101
20,241
21,473
Concerts and music festivals
17,879
Fo
Total
r
Total recorded music
Pr
Physical distribution
es
Recorded music
s
North America
U
Music market by component† (US$ millions)
†At average 2011 exchange rates. Sources: PricewaterhouseCoopers LLP, Wilkofsky Gruen Associates
Music market growth by component (%) 2008
2009
2010
2011p
2012
2013
2014
2015
2016
2012–16 CAGR
–19.1
–27.0
–20.2
–18.8
–8.0
–9.1
–8.7
–8.0
–7.6
–6.9
–8.1
Digital distribution
42.7
11.5
2.7
–2.1
8.7
12.2
12.3
12.2
11.4
10.6
11.7
Total recorded music
–9.8
–17.8
–12.8
–12.4
–0.9
0.9
2.3
3.6
4.2
4.7
3.1
5.3
6.1
8.6
–8.8
6.5
6.9
6.8
6.8
7.1
7.0
6.9
–3.8
–7.5
–2.3
–10.5
3.2
4.4
5.0
5.5
6.0
6.1
5.4
North America
2007
Recorded music Physical distribution
Concerts and music festivals Total
Sources: PricewaterhouseCoopers LLP, Wilkofsky Gruen Associates
268
PwC | Global entertainment and media outlook: 2012–2016
• The US market rose 3.4 percent in 2011, benefiting from a rebound in live music that offset a modest decrease in recorded music. We expect growth to average 5.5 percent compounded annually from $15.2 billion in 2011 to $19.8 billion in 2016.
• Canada’s recorded music market continued to decline in 2011, although at a more moderate rate compared with prior years, as a turnaround in concerts and music festivals boosted overall spending by 2.0 percent. We project spending to increase at a 4.1 percent compound annual rate from $1.3 billion in 2011 to $1.6 billion in 2016.
2008
2009
2010
2011p
2012
18,375
16,907
16,484
14,703
15,196
15,871
1,402
1,384
1,395
1,306
1,332
1,376
19,777
18,291
17,879
16,009
16,528
17,247
Canada Total
2015
2016
2012–16 CAGR
16,676
17,616
18,685
19,844
5.5
1,427
1,485
1,556
1,629
4.1
18,103
19,101
20,241
21,473
5.4
U
se
†At average 2011 exchange rates. Sources: PricewaterhouseCoopers LLP, Wilkofsky Gruen Associates
2014
o
United States
2013
n
2007
North America
ly
Music market by country† (US$ millions)
s
Recorded music
es
Digital distribution
Pr
• After growing 2.7 percent in 2009 and declining 2.1 percent in 2010, the digital market rose 8.7 percent in 2011. Growth was fueled by a rebound in overall downloads and a growing share of higher-priced albums in the download mix.
Fo
r
• While a digital album generally costs more than a singletrack download, an exception in 2011 was Lady Gaga’s Born This Way album, which was offered for 99 cents and sold 2.5 million copies, providing a lift for the overall market. • Social media also are playing roles in boosting the digital market. Online commentary on American Idol and Glee are driving downloads from those shows; and general online commentary on acts and artists is stimulating interest and boosting downloads. • Social media also help promote new acts. One Direction, a new boy band, launched in the United States with a social network campaign, resulting in significant downloads of the band’s single prior to radio airplay.
• The number of downloads increased by 5.0 percent in 2011. We expect growth to average 5.0 percent compounded annually during the next five years from 1.6 billion in 2011 to 2 billion in 2016. • Popular music streaming service Spotify in Europe entered the US market in 2011 with a freemium package. A limited-access advertiser-supported option is available for free to users. Users can also pay for unlimited access at monthly fees of $4.99 for online access and $9.99 for mobile access. By year-end 2011, there were more than 10 million total Spotify users. • Because of licensing issues, Spotify is not yet available in Canada but plans to enter that market. • MOG and Rdio are other subscription streaming services. MOG provides users with a fixed amount of listening time per month that can be augmented if a user enrolls friends. Rdio also provides access on a time-based model. • Rara launched in both the United States and Canada in 2011 offering more than 10 million tracks for $4.99 for online access and $9.99 for mobile access.
For digital recorded music unit sales data, visit www.pwc.com/outlook
Music | North America
269
• Google Music also launched in 2011 with a cloud-based service that allows users to store up to 20,000 songs for free and is selling music through its Android platform.
• The market also will benefit from new antipiracy developments. In a deal in the United States that was agreed to in 2011 and implemented in 2012, Internet service providers will send notices to copyright infringers that will escalate in severity, with the ultimate prospect of shutting off broadband access. Such plans have proved successful in other countries.
• Amazon also launched a cloud service. Amazon Cloud Drive gives users 5 gigabytes of free storage with an option to expand that to up to 1,000 gigabytes at a cost of $1 per gigabyte. Purchases through Amazon can be stored for free, and users can access music through the Amazon Cloud Player.
• We expect digital spending in the United States to grow at double-digit rates during the next five years, averaging 11.7 percent compounded annually to $5.5 billion in 2016 from $3.1 billion in 2011.
n ly
• Rhapsody, which acquired Napster in 2011, and Vevo, which launched in 2009, are other streaming services in the market.
• We expect Canada, which is behind the US in its development of a licensed digital market, to continue to be the faster-growing country as its digital market catches up. We project spending on digital music in Canada to increase at a 12.8 percent compound annual rate to $276 million in 2016 from $151 million in 2011.
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o
• In Canada, Galaxie Mobile, the first Canadian-owned subscription-based mobile streaming service, was launched in 2011. • Growth in smartphone and tablet penetration will expand the potential market for streaming services and for digital music in general.
Digital recorded music market† (US$ millions) 2008
United States
2,629
2,909
71
101
2,700
3,010
Canada
2011p
2012
2013
2014
2015
2016
2012–16 CAGR
2,972
2,892
3,137
3,516
3,945
4,428
4,932
5,451
11.7
118
133
151
174
198
222
248
276
12.8
3,025
3,288
3,690
4,143
4,650
5,180
5,727
11.7
3,090
Fo
Total
2010
2009
Pr
2007
r
North America
es
s
U
• The overall North American market will expand at an 11.7 percent compound annual rate to $5.7 billion in 2016 from $3.3 billion in 2011.
†At average 2011 exchange rates. Sources: PricewaterhouseCoopers LLP, Recording Industry Association of America, Wilkofsky Gruen Associates
Physical distribution • One of the more notable developments in 2011 was a sudden slowdown in the decline in physical sales in the United States. After falling at rates averaging more than 20 percent annually from 2007 to 2010, unit sales decreased only 4.4 percent in 2011. • We believe that most of the people likely to shift from physical to digital music have already done so and that the remaining market contains a larger share of buyers who prefer physical music. The physical market also benefited in 2011 from the sale of $5 CDs at Best Buy and Walmart, which provided a boost for unit sales.
270
PwC | Global entertainment and media outlook: 2012–2016
• We expect unit sales in the United States to fall at mid-single-digit rates that will average 6.4 percent compounded annually to 184 million in 2016 from 256 million in 2011. • Unit sales in Canada fell 7.4 percent in 2011, a slower decline compared with the 12.9 percent decrease in 2010. We also expect declines to continue at single-digit rates averaging 8.5 percent compounded annually. • Overall unit sales in North America will decline from 281 million in 2011 to 200 million in 2016, a 6.6 percent decrease compounded annually.
• We project that spending on physical music in the United States will fall at an 8.0 percent compound annual rate to $2.2 billion in 2016 from $3.4 billion in 2011. In Canada, physical distribution will drop from $347 million in 2011 to $215 million in 2016, a 9.1 percent decrease compounded annually.
• The overall North American market will total $2.4 billion in 2016 from $3.7 billion in 2011, an 8.1 percent decline on a compound annual basis.
Physical recorded music market† (US$ millions) 2008
2009
2010
2011p
2012
United States
7,986
5,758
4,552
3,661
3,379
3,075
588
499
438
389
347
312
8,574
6,257
4,990
4,050
3,726
3,387
Total
o
Canada
2013
2014
2015
2016
2012–16 CAGR
2,811
2,588
2,393
2,233
–8.0
283
257
236
215
–9.1
3,094
2,845
2,629
2,448
–8.1
ly
2007
n
North America
U
se
†At average 2011 exchange rates. Sources: PricewaterhouseCoopers LLP, Recording Industry Association of America, Wilkofsky Gruen Associates
Pr
es
s
For physical recorded music unit sales data, visit www.pwc.com/outlook
Total recorded music
Fo
r
• Digital spending nearly reached physical spending in the United States in 2011; in 2012, digital spending will become the larger component of the recorded music market. Total spending on recorded music in the United States will increase at a 3.4 percent compound annual rate to $7.7 billion in 2016 from $6.5 billion in 2011. • In Canada, digital spending constituted 30 percent of the recorded music market in 2011, and we expect it will not
overtake physical spending until 2015. Total spending on recorded music will continue to decline through 2014 before edging up in 2015–16. For the forecast period as a whole, recorded music spending in Canada will fall at a 0.3 percent compound annual rate to $491 million in 2016 from $498 million in 2011. • The overall recorded music market in North America will increase from $7 billion in 2011 to $8.2 billion in 2016, a 3.1 percent gain compounded annually.
Recorded music market by country† (US$ millions) North America United States Canada Total
2007
2008
2009
2010
2011p
2012
2013
2014
2015
2016
2012–16 CAGR
10,615
8,667
7,524
6,553
6,516
6,591
6,756
7,016
7,325
7,684
3.4
659
600
556
522
498
486
481
479
484
491
–0.3
11,274
9,267
8,080
7,075
7,014
7,077
7,237
7,495
7,809
8,175
3.1
†At average 2011 exchange rates. Sources: PricewaterhouseCoopers LLP, Recording Industry Association of America, Wilkofsky Gruen Associates
Music | North America
271
Concerts and music festivals
• The market should also benefit from new and renovated venues. Among the new venues opening in 2012 are the Barclays Center in Brooklyn, New York, with a capacity of 19,000; LIVESTRONG Sporting Park in Kansas City, Kansas, with a capacity of 25,000; and the Ford Center in Evansville, Indiana, with a capacity of 11,000. Chesapeake Energy Arena in Oklahoma City with a capacity of 18,000 is one of the largest renovated venues.
• After falling by 8.8 percent in 2010, the concert and music festival market rebounded in 2011 with a 6.5 percent gain. • U2 was the leading concert tour in North America in 2011, grossing $156 million. Taylor Swift, Kenny Chesney, Lady Gaga, Bon Jovi, and Elton John also had successful 2011 tours in North America.
• Artists are relying more on concerts than in the past, with the physical market having declined. Labels and artists are entering into 360 deals wherein they jointly participate in concert and recorded music revenues. The deals help cross-promote the recorded music market and the live performance market.
n ly
• The market benefited in 2011 from fewer concert tours that were better promoted. Average attendance was more than 20 percent higher, and average grosses were up more than 30 percent.
o
• Music festivals also thrived in 2011, including Coachella, Bonnaroo, and Lollapalooza. Smaller festivals such as Rock on the Range and the Hangout Music Festival also did very well in 2011. Music festivals represent a lessexpensive alternative for live music than concert tours do, and they provide a variety of performers. We expect festivals to be significant drivers of the overall market during the next five years.
se
• Social media also are playing growing roles in concerts. Tours are marketing on Facebook and other sites, and social media activity generates interest in tours.
U
• A generally improving economy should also help the livemusic market, which we expect will expand at a 6.9 percent compound annual rate to $13.3 billion in 2016 from $9.5 billion in 2011.
s
• A number of high-profile tours in 2012—including the Beach Boys, Fleetwood Mac, Madonna, Bruce Springsteen, and the Rolling Stones—are being reflected in early sales growth.
r
Pr
es
• The United States will rise from $8.7 billion in 2011 to $12.2 billion in 2016, a 7.0 percent compound annual increase, while Canada will average 6.4 percent compounded annually from $834 million in 2011 to $1.1 billion in 2016.
2008
2009
2010
2011p
2012
2013
2014
2015
2016
2012–16 CAGR
8,240
8,960
8,150
8,680
9,280
9,920
10,600
11,360
12,160
7.0
743
784
839
784
834
890
946
1,006
1,072
1,138
6.4
8,503
9,024
9,799
8,934
9,514
10,170
10,866
11,606
12,432
13,298
6.9
North America
2007
United States
7,760
Canada Total
Fo
Concert and music festival market† (US$ millions)
†At average 2011 exchange rates. Sources: PricewaterhouseCoopers LLP, Wilkofsky Gruen Associates
Export your own data selections to Excel and PDF. Visit the online Outlook at www.pwc.com/outlook
272
PwC | Global entertainment and media outlook: 2012–2016
Europe, Middle East, Africa (EMEA) The outlook in brief
• Physical distribution will decline at a 7.2 percent compound annual rate, falling to $4.4 billion in 2016 from $6.4 billion in 2011.
• New streaming services and the adoption of graduatedresponse antipiracy laws will fuel digital download spending.
• Digital distribution will grow at a 15.5 percent compound annual rate from $1.9 billion in 2011 to $3.9 billion in 2016, constituting 47 percent of total recorded music spending in 2016 compared with 23 percent in 2011.
• Physical declines will moderate as the remaining market increasingly consists of people who prefer physical music. • Music festivals will boost spending on live music.
• Increases during 2014–16 will offset declines during the next two years, leaving the recorded music market virtually flat at $8.4 billion from $8.3 billion in 2011.
Overview
ly
• Spending on recorded music fell 4.3 percent in 2011, less than half the 8.7 percent decrease in 2010. We expect spending to decline for an additional two years and then record low-single-digit increases as gains in digital distribution begin to offset moderating declines in physical distribution.
o
n
• The concert and music festival market will grow at a 4.8 percent compound annual rate from $12.7 billion in 2011 to $16.1 billion in 2016.
U
se
• The overall music market will reach $24.4 billion in 2016 from $21.1 billion in 2011, a 3.0 percent increase compounded annually.
2008
2009
2010
es
2007
2011p
2012
2013
2014
2015
2016
8,202
7,134
6,448
5,877
5,415
5,032
4,709
4,448
Pr
EMEA
s
Music market by component† (US$ millions)
Recorded music
9,032
749
1,069
1,355
1,589
1,901
2,240
2,639
3,051
3,471
3,909
Total recorded music
10,856
10,101
9,557
8,723
8,349
8,117
8,054
8,083
8,180
8,357
Concerts and music festivals
12,688
12,597
12,850
12,202
12,713
13,324
13,964
14,651
15,347
16,052
Total
23,544
22,698
22,407
20,925
21,062
21,441
22,018
22,734
23,527
24,409
Fo
Digital distribution
r
10,107
Physical distribution
†At average 2011 exchange rates. Sources: PricewaterhouseCoopers LLP, Wilkofsky Gruen Associates
Music market growth by component (%) EMEA
2008
2009
2010
2011p
2012
2013
2014
2015
2016
2012–16 CAGR
–13.6
–10.6
–9.2
–13.0
–9.6
–8.9
–7.9
–7.1
–6.4
–5.5
–7.2
41.6
42.7
26.8
17.3
19.6
17.8
17.8
15.6
13.8
12.6
15.5
–11.3
–7.0
–5.4
–8.7
–4.3
–2.8
–0.8
0.4
1.2
2.2
0.0
3.7
–0.7
2.0
–5.0
4.2
4.8
4.8
4.9
4.8
4.6
4.8
–3.8
–3.6
–1.3
–6.6
0.7
1.8
2.7
3.3
3.5
3.7
3.0
2007
Recorded music Physical distribution Digital distribution Total recorded music Concerts and music festivals Total
Sources: PricewaterhouseCoopers LLP, Wilkofsky Gruen Associates
Music | EMEA
273
• In France, spending dropped 1.4 percent as a 4.0 percent increase in concerts and music festivals was offset by a 6.4 percent decrease in recorded music. France’s physical market continued to fall by double digits in 2011, while digital spending rose 26.2 percent. We expect overall recorded music spending to decline through 2014, stabilize in 2015, and edge up 1.4 percent in 2016, for an overall 1.5 percent decline on a compound annual basis. That decrease will be offset by a 4.5 percent compound annual gain in live music, leading to an overall 1.7 percent increase compounded annually to $2.3 billion in 2016.
• The United Kingdom and Germany have the largest markets in the region, at $4.3 billion and $4.1 billion, respectively, in 2011, followed by France at $2.2 billion. Those three countries represented 50 percent of total spending in EMEA.
Fo
r
Pr
U
es
s
• Germany rose 2.2 percent in 2011, the largest gain in Western Europe. Recorded music spending rebounded with a 0.9 percent advance, as a 28.9 percent increase in digital spending offset a 3.5 percent drop in physical spending, which was less than half the 8.4 percent decline in physical spending in 2010. Growth was bolstered by a 3.6 percent increase in concert and music festival spending. We look for ongoing low-single-digit gains in recorded music that will be augmented by a 4.1 percent compound annual increase in live music. Germany will expand at a 2.7 percent compound annual rate to $4.7 billion in 2016.
se
o
n ly
• The UK decreased 1.0 percent in 2011 after falling 7.8 percent in 2010. A double-digit decline in physical spending offset a 15.2 percent increase in digital spending, leading to an overall 5.8 percent decrease in recorded music. A 3.0 percent gain in concert and music festival spending limited the overall decline. We expect digital spending to overtake physical spending in 2015, while an expanding live music market will generate low-single-digit gains beginning in 2012. Overall music spending in the UK will rise to $4.9 billion in 2016, a 2.7 percent compound annual increase from 2011.
274
PwC | Global entertainment and media outlook: 2012–2016
Music market by country† (US$ millions) 2007
EMEA
2008
2009
2010
2011p
2012
2013
2014
2015
2016
2012–16 CAGR
Western Europe
598
579
586
538
544
554
566
576
589
603
2.1
Belgium
566
554
562
528
534
544
555
568
583
599
2.3
Denmark
492
498
506
478
484
492
504
519
535
554
2.7
Finland
235
234
229
217
219
223
229
235
244
252
2.8
France
2,710
2,431
2,350
2,183
2,152
2,157
2,177
2,219
2,268
2,344
1.7
Germany
4,271
ly
Austria
4,686
4,299
3,992
4,080
4,174
4,397
4,514
4,654
2.7
309
305
293
263
251
241
237
237
239
247
–0.3
Ireland
313
303
295
274
266
260
259
262
266
271
0.4
Italy
1,242
1,156
1,094
1,056
1,076
1,106
1,146
1,192
1,241
1,291
3.7
Netherlands
1,132
1,079
1,078
968
Norway
668
646
656
622
Portugal
249
244
244
226
Spain
987
965
920
Sweden
725
731
765
Switzerland
1,047
1,045
1,050
United Kingdom
4,680
4,581
4,724
20,964
20,037
o
se
1,066
1,114
3.2
632
645
663
682
704
726
2.8
224
224
230
239
249
259
2.9
823
818
827
841
867
898
931
2.6
744
758
776
796
822
851
880
3.0
1,015
1,033
1,060
1,093
1,127
1,167
1,209
3.2
4,356
4,314
4,358
4,466
4,595
4,747
4,940
2.7
19,651
18,283
18,338
18,595
19,013
19,557
20,161
20,874
2.6
75
73
62
61
61
62
62
64
66
1.6
es 101
102
103
106
108
112
116
2.6
378
353
355
360
367
376
386
399
2.4
39
37
31
13
14
14
14
15
16
17
4.0
Russia
1,161
1,238
1,375
1,363
1,445
1,555
1,690
1,829
1,973
2,087
7.6
Turkey
297
298
295
277
283
290
298
308
318
330
3.1
2,048
2,137
2,260
2,169
2,260
2,383
2,537
2,698
2,869
3,015
5.9
73
73
69
65
64
65
65
66
68
70
1.8
Middle East/North Africa (MENA)‡
116
113
109
102
101
102
106
112
120
129
5.0
South Africa
343
338
318
306
299
296
297
301
309
321
1.4
Middle East/ Africa total
532
524
496
473
464
463
468
479
497
520
2.3
23,544
22,698
22,407
20,925
21,062
21,441
22,018
22,734
23,527
24,409
3.0
Central and Eastern Europe total
Fo
108
380
Romania
Middle East/Africa Israel
EMEA total
109
s
1,020
362
Hungary Poland
108
980
U
81
954
r
Central and Eastern Europe Czech Republic
953
Pr
Western Europe total
n
5,011
Greece
†At average 2011 exchange rates. ‡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
Music | EMEA
275
Digital distribution • Digital distribution rose 19.6 percent in 2011 to $1.9 billion, fueled by a 15.0 percent increase in number of downloads and by an emerging streaming market. • The market also benefited from the implementation of antipiracy laws. In France, the HADOPI law called for stepped-up expenditures on education combined with warnings and the ultimate threat of sanctions. The number of peer-to-peer file sharers fell 26 percent, and the number of digital downloads rose 27.9 percent in 2011.
• Rara in 2011 launched in France, Germany, Spain, and the UK. The service was offered on Hewlett-Packard PCs shipped in Europe and offers 10 million tracks for around $5 per month online and around $10 per month through mobile devices. • Deezer and Orange formed partnerships in France and the UK to bundle Deezer’s music service in Orange’s mobile packages. • WiMP offers a subscription service in Norway, Sweden, Denmark, and Portugal and has nearly 400,000 subscribers. WiMP also is launching in Germany, Ireland, Belgium, and the Netherlands in 2012.
n ly
Recorded music
• There are numerous streaming services from wireless carriers throughout the region that are expanding the market.
se
o
• Similar measures were adopted in Sweden and the UK with similar results. In Spain, the Sustainable Economy Act, which went into effect in early 2012, includes a provision requiring Internet service providers to block access to Web sites that contain infringing content. That provision and others will limit unauthorized file sharing while boosting the legitimate digital download market.
U
s
• At the same time, streaming services are becoming popular, while album downloads are becoming larger components of digital downloads. That pattern echoes physical music, wherein singles were the dominant format in the 1950s and 1960s; albums overtook them in the 1970s. We expect those developments to lead to slower growth in digital unit downloads. Growth will drop to single-digit levels in 2014–16 and will average 10.1 percent compounded annually for the forecast period as a whole, increasing to 1.1 billion in 2016 from 705 million in 2011.
• Labels and artists are entering into full-service or 360 deals that incorporate touring and music sales in a single package. Fan club subscriptions, merchandise, and digital music can be purchased through label Web sites, providing an incremental lift for the digital market.
Fo
r
Pr
es
• Social media sites also help stimulate interest in artists through discussions of recent releases, music videos, and other artist activities. • Growing penetration by tablets and smartphones is also expanding the market, as these devices are popular platforms for entertainment. • We project spending on digital music to increase at a 15.5 percent compound annual rate during the next five years to $3.9 billion in 2016.
• Streaming services are proving very popular in EMEA. Spotify offers (1) a free service with limited access that is advertiser supported and (2) paid options for online and mobile access. Spotify had more than 10 million users and nearly 2 million subscribers in EMEA at year-end 2011. In early 2012, Spotify launched a service in Germany. In the UK, Spotify partnered with Virgin Media to provide content for that market.
For digital recorded music unit sales data, visit www.pwc.com/outlook
276
PwC | Global entertainment and media outlook: 2012–2016
Digital recorded music market† (US$ millions) 2007
EMEA
2008
2009
2010
2011p
2012
2013
2014
2015
2016
2012–16 CAGR
Western Europe
14
15
22
29
36
43
49
53
57
61
11.1
Belgium
11
14
18
22
26
32
38
43
49
54
15.7
Denmark
18
33
43
52
62
71
80
90
99
108
11.7
Finland
6
7
11
15
18
21
24
26
29
32
12.2
France
38
58
85
122
154
188
230
271
313
355
18.2
550
ly
Austria
200
239
284
366
452
661
772
890
19.4
3
6
8
10
11
13
14
17
19
24
16.9
Ireland
6
8
10
11
13
14
17
21
25
29
17.4
Italy
38
38
47
53
63
82
109
134
161
188
24.4
Netherlands
22
24
28
33
Norway
14
20
30
39
Portugal
6
8
11
13
38
40
45
8
16
31
65
87
United Kingdom
247
375
Western Europe total
656
949
Switzerland
Czech Republic
3
Hungary
6
o
77
90
103
19.1
44
49
55
62
70
77
11.8
U
se
64
14
15
18
22
26
31
17.2
54
64
70
78
88
97
106
10.6
37
45
55
64
74
85
96
16.4
s
53
108
124
143
164
186
209
231
254
12.2
451
508
585
669
770
866
962
1,059
12.6
1,187
1,406
1,687
1,991
2,346
2,714
3,085
3,467
15.5
2
1
1
2
2
3
3
4
5
20.1
r
Central and Eastern Europe
43
es
Sweden
Pr
Spain
n
122
Greece
Germany
10
11
12
13
15
16
18
20
10.8
7
9
10
12
14
17
19
21
24
14.9
‡
1
1
1
2
2
3
4
5
6
24.6
Russia
33
38
75
78
87
99
113
128
145
164
13.5
Turkey
17
24
27
30
36
42
48
54
60
66
12.9
Central and Eastern Europe total
64
81
123
131
151
172
199
224
253
285
13.5
7
10
11
12
14
16
18
21
23
26
13.2
Middle East/North Africa (MENA)††
12
15
17
19
22
26
31
37
44
52
18.8
South Africa
10
14
17
21
27
35
45
55
66
79
24.0
Middle East/ Africa total
29
39
45
52
63
77
94
113
133
157
20.0
749
1,069
1,355
1,589
1,901
2,240
2,639
3,051
3,471
3,909
15.5
Romania
Fo
9
5
Poland
Middle East/Africa Israel
EMEA total
†At average 2011 exchange rates. ‡Less than US$500,000. ††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
Music | EMEA
277
Physical distribution
Concerts and music festivals
• Physical unit sales fell 9.4 percent in 2011, and spending declined 9.6 percent, continuing the ongoing erosion of the physical market.
• The concert and music festival market rose 4.2 percent in 2011, partially rebounding from a 5.0 percent decline in 2010. The international touring market improved following a disappointing year in 2010, when a number of concerts were canceled.
• We expect declines to further moderate, with decreases averaging 6.2 percent compounded annually.
n ly
o
• Take That was the biggest tour in UK history and the second-largest tour worldwide in 2011, behind U2, with more than $220 million, $185 million of which was generated in the UK and Ireland. • The festival market was mixed in 2011. Poor weather hurt spending in the UK, and several festivals closed, including the Truck Festival, Vintage at Goodwood, and Northern Lights. At the same time, other festivals sold out, including Glastonbury, V Festival, Bestival, Creamfields, Secret Garden Party, and End of the Road.
es
s
• Spending on physical music will fall at a 7.2 percent compound annual rate to $4.4 billion in 2016 from $6.4 billion in 2011.
• For EMEA as a whole, Take That, Justin Bieber, Lady Gaga, Usher, Roger Waters, Michael Bublé, and Taylor Swift were among the tours that stimulated the rebound in 2011.
se
• At the same time, we believe there is a core market for physical recorded music played on sophisticated sound systems. As that core level of activity is approached, declines in physical spending will moderate. We have seen this in the United States in 2011, and there was a smaller decline in EMEA in 2011 as well.
• The O2 Arena in London was the top-grossing venue in the world in 2011 for the third consecutive year. Glee Live, Usher, Kylie Minogue, Justin Bieber, Lady Gaga, and Roger Waters were among the leading acts playing at O2 in 2011.
U
• Piracy and the migration of legitimate sales from physical to digital are shrinking the physical market. The decline in physical spending led to store closings that are exacerbating the problem. In the UK, for example, HMV is the only remaining national chain, and it generates more than a third of total physical spending in that country.
Pr
Total recorded music
Fo
r
• Total spending on recorded music will decline during the next two years and then begin to expand in 2014, edging up to $8.4 billion by 2016 from $8.3 billion in 2011.
• Weak economic conditions also hurt the festival market in some countries in 2011. • We look for somewhat stronger growth in 2012, fueled by a strong roster of international tours. The 2012 Olympics in the UK will attract visitors, which should provide a boost for the festival market. • Over the longer run, popular local festivals will sustain growth, as will a modestly improving economy. • We project spending to rise at a 4.8 percent compound annual rate to $16.1 billion in 2016 from $12.7 billion in 2011.
For physical recorded music unit sales data, visit www.pwc.com/outlook
278
PwC | Global entertainment and media outlook: 2012–2016
Physical recorded music market† (US$ millions) 2007
EMEA
2008
2009
2010
2011p
2012
2013
2014
2015
2016
2012–16 CAGR
Western Europe
250
223
202
182
167
153
141
129
120
111
–7.8
Belgium
235
213
203
186
174
163
153
145
138
132
–5.4
Denmark
189
171
155
136
121
108
97
88
80
75
–9.1
Finland
100
93
79
70
63
57
53
50
49
47
–5.7
France
1,636
1,309
1,159
1,011
906
821
751
696
654
626
–7.1
Germany
1,558
ly
Austria
2,058
1,952
1,788
1,725
1,642
1,482
1,405
1,336
–5.0
146
132
111
93
77
64
56
49
43
39
–12.7
Ireland
143
125
111
96
82
71
61
53
46
40
–13.4
Italy
508
395
296
287
269
252
237
223
210
199
–5.9
Netherlands
391
362
339
278
Norway
239
197
180
161
Portugal
90
79
70
60
Spain
358
313
249
Sweden
224
206
210
Switzerland
294
259
United Kingdom
1,987
1,800
Western Europe total
8,966
7,935
37
o
164
152
141
–9.2
146
132
121
111
103
96
–8.0
U
se
179
50
43
39
36
35
33
–8.0
178
142
124
109
97
89
81
–10.6
202
193
185
177
170
163
156
–4.2
es
s
198
203
184
169
157
145
135
126
–7.3
1,724
1,474
1,283
1,123
1,010
922
850
802
–9.0
7,271
6,405
5,810
5,305
4,899
4,560
4,272
4,040
–7.0
28
20
16
14
12
10
9
8
–12.9
33
29
26
23
21
19
18
16
–9.3
153
143
130
120
112
105
100
95
91
–5.4
31
27
21
4
3
3
2
1
1
1
–19.7
Russia
412
400
300
185
148
126
111
99
89
82
–11.1
Turkey
113
104
92
80
73
67
61
57
52
49
–7.7
Central and Eastern Europe total
777
753
617
448
386
345
312
286
264
247
–8.5
Poland Romania
Fo
38
142
Hungary
42
31
r
Czech Republic
228
231
Pr
Central and Eastern Europe
n
2,176
Greece
Middle East/Africa Israel
46
42
37
33
30
28
25
23
22
20
–7.8
Middle East/North Africa (MENA)‡
75
67
60
53
48
44
41
39
38
37
–5.1
South Africa
243
235
217
195
174
155
138
124
113
104
–9.8
Middle East/ Africa total
364
344
314
281
252
227
204
186
173
161
–8.6
10,107
9,032
8,202
7,134
6,448
5,877
5,415
5,032
4,709
4,448
–7.2
EMEA total
†At average 2011 exchange rates. ‡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
Music | EMEA
279
Recorded music market by country† (US$ millions) 2007
EMEA
2008
2009
2010
2011p
2012
2013
2014
2015
2016
2012–16 CAGR
Western Europe
264
238
224
211
203
196
190
182
177
172
–3.3
Belgium
246
227
221
208
200
195
191
188
187
186
–1.4
Denmark
207
204
198
188
183
179
177
178
179
183
0.0
Finland
106
100
90
85
81
78
77
76
78
79
–0.5
France
1,674
1,367
1,244
1,133
1,060
1,009
981
967
967
981
–1.5
Germany
n ly
Austria
2,258
2,191
2,072
2,091
2,094
2,108
2,143
2,177
2,226
1.3
149
138
119
103
88
77
70
66
62
63
–6.5
Ireland
149
133
121
107
95
85
78
74
71
69
–6.2
Italy
546
433
343
340
332
334
346
357
371
387
3.1
Netherlands
413
386
367
311
271
251
241
242
244
–2.1
Norway
253
217
210
200
190
181
176
173
173
173
–1.9
Portugal
96
87
81
73
Spain
396
353
294
232
Sweden
232
222
241
239
Switzerland
359
346
339
United Kingdom
2,234
2,175
2,175
Western Europe total
9,622
8,884
8,458
Hungary
48 147
Poland Romania
31
33 47
se 58
57
58
61
64
0.0
206
194
187
185
186
187
–1.9
238
240
241
244
248
252
1.1
es
s
U 64
327
333
343
354
366
380
3.0
1,982
1,868
1,792
1,780
1,788
1,812
1,861
–0.1
Pr
40
243
327
7,811
7,497
7,296
7,245
7,274
7,357
7,507
0.0
29
21
18
16
15
13
13
13
–6.3
r
Czech Republic
43
40
38
36
36
35
36
36
–1.1
160
152
140
132
126
122
119
116
115
–2.7
28
22
5
5
5
5
5
6
7
7.0
Fo
Central and Eastern Europe
o
2,298
Greece
Russia
445
438
375
263
235
225
224
227
234
246
0.9
Turkey
130
128
119
110
109
109
109
111
112
115
1.1
Central and Eastern Europe total
841
834
740
579
537
517
511
510
517
532
–0.2
Middle East/Africa Israel
53
52
48
45
44
44
43
44
45
46
0.9
Middle East/North Africa (MENA)‡
87
82
77
72
70
70
72
76
82
89
4.9
South Africa
253
249
234
216
201
190
183
179
179
183
–1.9
Middle East/ Africa total
393
383
359
333
315
304
298
299
306
318
0.2
10,856
10,101
9,557
8,723
8,349
8,117
8,054
8,083
8,180
8,357
0.0
EMEA total
†At average 2011 exchange rates. ‡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
280
PwC | Global entertainment and media outlook: 2012–2016
Concert and music festival market† (US$ millions) 2007
EMEA
2008
2009
2010
2011p
2012
2013
2014
2015
2016
2012–16 CAGR
Western Europe
334
341
362
327
341
358
376
394
412
431
4.8
Belgium
320
327
341
320
334
349
364
380
396
413
4.3
Denmark
285
294
308
290
301
313
327
341
356
371
4.3
Finland
129
134
139
132
138
145
152
159
166
173
4.6
France
1,036
1,064
1,106
1,050
1,092
1,148
1,196
1,252
1,301
1,363
4.5
Germany
2,163
ly
Austria
2,428
2,108
1,920
1,989
2,080
2,254
2,337
2,428
4.1
160
167
174
160
163
164
167
171
177
184
2.5
Ireland
164
170
174
167
171
175
181
188
195
202
3.4
Italy
696
723
751
716
744
772
800
835
870
904
4.0
Netherlands
719
693
711
657
Norway
415
429
446
422
Portugal
153
157
163
153
Spain
591
612
626
Sweden
493
509
524
Switzerland
688
699
2,446
2,406
11,342
11,153
Western Europe total
Czech Republic
41
o
824
870
5.0
442
464
487
509
531
553
4.6
U
se
779
160
166
173
181
188
195
4.0
591
612
633
654
682
712
744
4.0
505
520
536
555
578
603
628
3.8
es
s
737
706
727
750
773
801
829
3.3
2,549
2,374
2,446
2,566
2,686
2,807
2,935
3,079
4.7
11,193
10,472
10,841
11,299
11,768
12,283
12,804
13,367
4.3
42
44
41
43
45
47
49
51
53
4.3
65
61
64
67
70
73
76
80
4.6
220
226
213
223
234
245
257
270
284
5.0
8
9
9
8
9
9
9
10
10
10
2.1
Russia
716
800
1,000
1,100
1,210
1,330
1,466
1,602
1,739
1,841
8.8
Turkey
167
170
176
167
174
181
189
197
206
215
4.3
1,207
1,303
1,520
1,590
1,723
1,866
2,026
2,188
2,352
2,483
7.6
Poland Romania
Central and Eastern Europe total
Fo
62
215
Hungary
60
703
688
r
Central and Eastern Europe
682
711
Pr
United Kingdom
n
2,713
Greece
Middle East/Africa Israel
20
21
21
20
20
21
22
22
23
24
3.7
Middle East/North Africa (MENA)‡
29
31
32
30
31
32
34
36
38
40
5.2
South Africa
90
89
84
90
98
106
114
122
130
138
7.1
Middle East/ Africa total
139
141
137
140
149
159
170
180
191
202
6.3
12,688
12,597
12,850
12,202
12,713
13,324
13,964
14,651
15,347
16,052
4.8
EMEA total
†At average 2011 exchange rates. ‡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
Music | EMEA
281
Asia Pacific The outlook in brief
• Physical distribution will decline at a 5.2 percent compound annual rate to $4.1 billion in 2016 from $5.3 billion in 2011.
• New streaming services and antipiracy initiatives will drive spending on digital music.
• Digital distribution will rise to $4 billion in 2016, a 10.9 percent increase on a compound annual basis from $2.4 billion in 2011.
• Growth in licensed services will continue to cut into physical distribution. • New festivals and international players’ entrance will boost spending on concerts and music festivals.
• Spending on concerts and music festivals will increase from $3.4 billion in 2011 to $4.3 billion in 2016, a 5.0 percent gain on a compound annual basis.
Overview
n ly
• Overall music spending will expand at a 2.2 percent compound annual rate to $12.3 billion in 2016 from $11 billion in 2011.
o
• Recorded music spending fell by 1.6 percent in 2011, a relative improvement compared with annual decreases averaging more than 7 percent during the prior two years.
2010
2011p
2012
2013
2014
2015
2016
6,213
5,465
5,325
4,910
4,591
4,347
4,178
4,076
2,219
2,342
2,355
2,715
3,026
3,334
3,648
3,955
8,432
7,807
7,680
7,625
7,617
7,681
7,826
8,031
2,917
3,173
3,289
3,357
3,513
3,686
3,882
4,085
4,285
11,972
11,605
11,096
11,037
11,138
11,303
11,563
11,911
12,316
2008
2009
Recorded music
7,715
7,043
Digital distribution
1,644
2,012
Total recorded music
9,359
9,055
Concerts and music festivals
2,777
Fo
12,136
r
Physical distribution
Total
U
es
2007
Pr
Asia Pacific
s
Music market by component† (US$ millions)
se
• We expect declines for an additional two years followed by modest gains during 2014–16. For the forecast period as a whole, spending on recorded music will rise from $7.7 billion in 2011 to $8 billion in 2016, a 0.9 percent compound annual increase.
†At average 2011 exchange rates. Sources: PricewaterhouseCoopers LLP, Wilkofsky Gruen Associates
Music market growth by component (%) Asia Pacific
2007
Recorded music
2008
2009
2010
2011p
2012
2013
2014
2015
2016
2012–16 CAGR
Physical distribution
–5.8
–8.7
–11.8
–12.0
–2.6
–7.8
–6.5
–5.3
–3.9
–2.4
–5.2
Digital distribution
37.9
22.4
10.3
5.5
0.6
15.3
11.5
10.2
9.4
8.4
10.9
Total recorded music
–0.2
–3.2
–6.9
–7.4
–1.6
–0.7
–0.1
0.8
1.9
2.6
0.9
Concerts and music festivals
5.3
5.0
8.8
3.7
2.1
4.6
4.9
5.3
5.2
4.9
5.0
Total
1.0
–1.4
–3.1
–4.4
–0.5
0.9
1.5
2.3
3.0
3.4
2.2
Sources: PricewaterhouseCoopers LLP, Wilkofsky Gruen Associates
282
PwC | Global entertainment and media outlook: 2012–2016
o
n
ly
• In the People’s Republic of China (PRC), piracy is estimated at 99 percent, and total legitimate spending was only $348 million in 2011. Digital accounted for 81 percent of total recorded music spending in 2011, the second-highest share in the world, behind South Korea. Digital spending does not include fees paid to mobile telephone providers for subscription packages, music clubs, and other services that facilitate the downloading of music, ringtones, and other mobile music. Only those outlays directly related to actual music purchases are included. Overall spending rose 8.4 percent in 2011, the result of a 10.3 percent increase in recorded music and 6.1 percent growth in concerts and music festivals. Growth during the next five years will average 9.2 percent compounded annually to $541 million in 2016.
se
• India, next largest, at $255 million, was the fastest-growing country in 2011, with a 26.9 percent increase. The digital market, which represented 72 percent of recorded music spending, rose 58.3 percent, and concerts and music festivals jumped 22.9 percent. India will continue to be the fastest-growing country, with a 14.7 percent compound annual increase to $506 million in 2016.
U
• Japan is the dominant territory, at $7.3 billion, in 2011, 66 percent of total recorded music spending in Asia Pacific. Trends in Japan differed from those in other countries in 2011. Digital recorded music fell 16.3 percent in 2011 while growing at double-digit rates in every other country except Taiwan, where the increase was 7.1 percent. Meanwhile, spending on physical recorded music, which fell at doubledigit or high-single-digit rates in every other country, edged down only 0.6 percent in Japan. In the concert and music festival market, Japan fell 3.2 percent, while every other country except Pakistan expanded. Overall spending fell 4.0 percent in 2011. It appears that the earthquake and tsunami put consumers in a mind-set of self-control that translated into maintaining traditional spending patterns that kept physical spending relatively steady while leading to a decline in digital spending and a decrease in attendance at live music events. We expect Japan to return in 2012 to a spending pattern that will be more charac teristic of the overall market. Spending will decline at an 0.8 percent compound annual rate to $7 billion in 2016.
Fo
r
Pr
es
s
• Australia is the second-largest country and the only other market above $1 billion in 2011. Spending rose 4.5 percent in 2011 as growth in concerts and music festivals offset a modest decline in recorded music. In recorded music, a 34.2 percent jump in digital spending nearly offset a 13.1 percent decline in physical spending. Australia’s digital market will overtake its physical market in 2013, which will lead to mid-single-digit gains in recorded music spending during the latter part of the forecast period. Ongoing growth in concerts and music festivals will lead to an overall 5.0 percent compound annual increase to $1.5 billion in 2016 from $1.2 billion in 2011.
• Thailand, at $228 million in 2011, was the only other country in Asia Pacific above $200 million. Spending rose 1.8 percent, boosted by a 5.1 percent increase in concerts and music festivals that offset an 0.8 percent decline in recorded music. In recorded music, a 12.5 percent decline in physical spending offset an 11.3 percent increase in digital spending. We expect recorded music spending to begin to increase in 2013, and continued growth in concerts and music festivals will lead to a 4.1 percent increase in overall spending to $279 million in 2016.
• South Korea, the third-largest market, at $857 million, rose 12.3 percent in 2011. The recorded music market is now 92 percent digital as piracy has long since decimated the physical market, while a hugely successful antipiracy initiative has propelled digital spending. South Korea will be one of the few countries where recorded music will grow faster than concerts and music festivals. Spending will increase at a 10.2 percent compound annual rate to $1.4 billion in 2016.
Filter digital and nondigital spending data. Visit the online Outlook at www.pwc.com/outlook
Music | Asia Pacific
283
Music market by country† (US$ millions) 2007
2008
2009
2010
2011p
2012
2013
2014
2015
2016
2012–16 CAGR
Australia
1,054
1,027
1,177
1,139
1,190
1,243
1,301
1,368
1,440
1,516
5.0
China
272
285
301
321
348
380
415
456
498
541
9.2
Hong Kong
155
157
157
158
163
168
174
182
191
199
4.1
India
168
148
158
201
255
295
344
390
447
506
14.7
Indonesia
164
168
177
183
193
204
216
227
239
251
5.4
9,058
8,889
8,222
7,636
7,327
7,161
7,035
6,976
6,979
7,045
–0.8
57
56
55
56
59
142
148
142
144
153
Pakistan
27
28
28
28
28
29
Philippines
51
52
53
54
55
58
Singapore
91
95
95
93
95
South Korea
553
593
698
763
857
Taiwan
126
113
107
99
Thailand
217
218
228
224
Vietnam
NA
NA
NA
NA
12,136
11,972
11,605
Total
63
67
69
4.3
168
176
184
5.0
30
31
33
33
3.3
61
63
66
68
4.3
101
113
121
128
6.1
957
1,062
1,173
1,288
1,394
10.2
96
96
99
100
103
1.0
228
234
243
254
266
279
4.1
NA
NA
NA
NA
NA
NA
—
11,138
11,303
11,563
11,911
12,316
2.2
s
U 98
11,096
11,037
Digital distribution
Fo
Recorded music
r
Pr
†At average 2011 exchange rates. Sources: PricewaterhouseCoopers LLP, Wilkofsky Gruen Associates
60
159
107
es
New Zealand
se
57 143
Malaysia
o
Japan
n ly
Asia Pacific
• Digital spending rose only 0.6 percent in 2011, as the 16.3 percent decline in Japan nearly offset the 25.8 percent increase in the other countries. We expect the Japan anomaly to reverse in 2012 and project overall digital spending to increase by 15.3 percent. • The digital market in Asia Pacific is beginning to migrate from downloads to streaming services. Spotify, Deezer, and Rdio entered Australia in 2011. Spotify has a limitedaccess advertiser-supported service and an unlimitedaccess subscription-based service. Deezer is a subscription service, and Rdio offers an advertiser-supported service with time limits on usage.
284
PwC | Global entertainment and media outlook: 2012–2016
• KKBOX offers streaming services in Hong Kong and Taiwan; MelOn and Mnet are popular streaming services in South Korea. Omusic was introduced in Taiwan in 2011. • In the PRC, Baidu entered into a licensing arrangement with OneStop China—a joint venture between Sony BMI, Warner Music, and Universal—to offer an ad-supported streaming service. Baidu pays the record companies for each download or stream, and the companies share ad revenues. • The implementation of graduated-response systems has proved successful. In South Korea, 70 percent of infringers stopped their file-sharing activity after the first warning. In New Zealand, a similar system was enacted in 2011, and within the first three months, file sharing fell 16 percent. In India and Malaysia, Internet service providers are blocking access to Web sites that carry infringing content.
• New streaming services and growing smartphone and tablet penetration will expand the market for digital access.
• To some degree, growth in streaming will cut into digital downloads. We project growth in unit downloads to drop to low-single-digit gains by 2015–16 and to average 6.0 percent compounded annually from 1.3 billion in 2011 to 1.7 billion in 2016.
• We project digital music spending in Asia Pacific to increase at a 10.9 percent compound annual rate to $4 billion in 2016 from $2.4 billion in 2011. Digital recorded music market† (US$ millions) 2009
2010
2011p
2012
Australia
53
75
110
146
196
243
China
75
95
111
132
156
182
Hong Kong
17
23
27
31
37
India
15
21
45
96
152
Indonesia
33
40
49
57
66
1,231
1,477
1,484
1,403
Malaysia
7
9
11
13
New Zealand
5
6
7
Pakistan
3
5
6 10
8
10
15
144
176
Taiwan
12
Thailand Vietnam
2012–16 CAGR
449
18.0
209
240
271
302
14.1
41
46
51
56
61
10.5
196
239
284
339
395
21.0
75
83
91
99
107
10.1
1,174
1,305
1,380
1,443
1,506
1,568
6.0
15
17
19
21
23
25
10.8
11
15
21
25
29
33
37
19.8
6
7
8
9
10
11
12
11.4
U
se
n
397
12
14
16
18
20
22
23
10.4
20
23
27
31
35
39
43
13.3
271
339
416
493
574
656
737
809
14.2
13
14
14
15
16
17
19
20
22
8.0
33
49
56
62
69
75
82
89
95
102
8.1
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
—
2,012
2,219
2,342
2,355
2,715
3,026
3,334
3,648
3,955
10.9
1,644
Fo
Total
2016
18
r
South Korea
2015
346
s
6
Singapore
Pr
Philippines
2014
294
es
Japan
2013
ly
2008
o
2007
Asia Pacific
†At average 2011 exchange rates. Sources: PricewaterhouseCoopers LLP, Wilkofsky Gruen Associates
For digital recorded music unit sales data, visit www.pwc.com/outlook
Music | Asia Pacific
285
• We project physical spending to fall at a 5.2 percent compound annual rate from $5.3 billion in 2011 to $4.1 billion in 2016.
Physical distribution • With the physical market having nearly disappeared in a number of countries, further declines will necessarily be limited.
Total recorded music
• Japan accounted for 56 percent of all physical unit sales in Asia Pacific in 2011 and 86 percent of physical spending. Japan’s physical market has held up relatively well compared with many other countries’, and we expect that pattern to continue.
• Total spending on recorded music will decline during the next two years and then expand beginning in 2014, rising to $8 billion in 2016 from $7.7 billion in 2011, a 0.9 percent compound annual increase.
o
n ly
• Overall physical unit sales will fall at a 5.2 percent compound annual rate to 352 million in 2016 from 461 million in 2011.
2012
2013
se
2014
2015
2016
2012–16 CAGR
U
Physical recorded music market† (US$ millions)
303
274
248
227
210
–9.1
36
31
28
26
24
22
–9.4
39
35
32
30
28
26
–7.8
60
49
41
34
30
27
–14.8
42
38
34
31
28
26
24
–8.8
4,626
4,597
4,266
4,015
3,827
3,701
3,639
–4.6
21
17
15
14
12
11
11
10
–7.8
56
40
31
27
22
19
16
13
–16.0
10
9
8
7
7
6
6
5
–9.0
21
19
17
15
14
13
12
11
10
–7.8
36
31
26
23
21
19
18
18
17
–5.9
55
47
40
34
30
27
24
22
20
–10.1
73
57
48
40
35
30
26
24
21
19
–11.5
Thailand
95
77
75
64
56
49
44
40
37
34
–9.5
Vietnam
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
—
7,715
7,043
6,213
5,465
5,325
4,910
4,591
4,347
4,178
4,076
–5.2
2008
2009
2010
2011p
588
516
510
389
338
China
77
62
51
42
Hong Kong
64
57
49
43
139
113
85
70
60
54
48
6,380
5,901
5,163
Malaysia
28
25
New Zealand
65
58
Pakistan
13
11
Philippines
23
Singapore
40
South Korea
70
Taiwan
Total
es
Japan
Pr
Indonesia
r
India
Fo
Australia
s
2007
Asia Pacific
†At average 2011 exchange rates. Sources: PricewaterhouseCoopers LLP, Wilkofsky Gruen Associates
For physical recorded music unit sales data, visit www.pwc.com/outlook
286
PwC | Global entertainment and media outlook: 2012–2016
Recorded music market by country† (US$ millions) 2008
2009
2010
2011p
2012
2013
2014
2015
2016
2012–16 CAGR
Australia
641
591
620
535
534
546
568
594
624
659
4.3
China
152
157
162
174
192
213
237
266
295
324
11.0
81
80
76
74
76
76
78
81
84
87
2.7
154
134
130
166
212
245
280
318
369
422
14.8
93
94
97
99
104
109
114
119
125
131
4.7
7,611
7,378
6,647
6,029
5,771
5,571
5,395
5,270
5,207
5,207
–2.0
Malaysia
35
34
32
30
30
31
31
32
34
35
3.1
New Zealand
70
64
63
51
46
48
47
48
49
50
1.7
Pakistan
16
16
16
15
15
15
16
16
17
17
2.5
Philippines
29
29
29
29
29
30
31
32
33
33
2.6
Singapore
50
51
49
46
214
231
318
379
85
70
62
54
Thailand
128
126
131
Vietnam
NA
NA
NA
9,359
9,055
8,432
South Korea Taiwan
Total
n
o
se
Japan
46
48
50
53
57
60
5.5
450
523
601
680
759
829
13.0
U
Indonesia
50
46
43
43
41
41
–3.9
126
125
124
126
129
132
136
1.7
NA
NA
NA
NA
NA
NA
NA
—
7,680
7,625
7,617
7,681
7,826
8,031
0.9
s
India
es
Hong Kong
ly
2007
Asia Pacific
7,807
Pr
†At average 2011 exchange rates. Sources: PricewaterhouseCoopers LLP, Wilkofsky Gruen Associates
r
Concerts and music festivals
Fo
• The concert and music festival market rose 2.1 percent in 2011. Excluding Japan, which fell 3.2 percent, spending rose 7.1 percent. • Australia attracts international tours and also has a thriving local festival market. Rod Laver Arena was the second-largest-grossing venue in the world in 2011, attracting star acts such as Usher, Michael Bublé, the Eagles, Kylie Minogue, and Metallica. • Bob Dylan played in the PRC in 2011, and Janet Jackson toured in a number of countries in Asia.
• Popular Australian-based festivals are expanding into other countries. Laneway launched festivals in Singapore and will be expanding into Thailand and South Korea in the next few years. Future Entertainment plans to introduce a Future Music Festival in Malaysia. Australian bands also are touring in Asia. • Live Nation Entertainment, the largest international promoter, is entering Japan in a joint venture with Creativeman to form Live Nation Japan. • New festivals and more-aggressive promotion should propel the concert and music festival market, which we expect will expand at a 5.0 percent compound annual rate to $4.3 billion in 2016 from $3.4 billion in 2011.
Music | Asia Pacific
287
2008
2009
2010
2011p
2012
2013
2014
2015
2016
2012–16 CAGR
Australia
413
436
557
604
656
697
733
774
816
857
5.5
China
120
128
139
147
156
167
178
190
203
217
6.8
Hong Kong
74
77
81
84
87
92
96
101
107
112
5.2
India
14
14
28
35
43
50
64
72
78
84
14.3
Indonesia
71
74
80
84
89
95
102
108
114
120
6.2
1,447
1,511
1,575
1,607
1,556
1,590
1,640
1,706
1,772
1,838
3.4
Malaysia
22
23
24
25
26
28
New Zealand
73
78
85
91
98
105
Pakistan
11
12
12
13
13
14
Philippines
22
23
24
25
26
28
Singapore
41
44
46
47
49
339
362
380
384
407
Taiwan
41
43
45
45
Thailand
89
92
97
98
Vietnam
NA
NA
NA
NA
2,777
2,917
3,173
Total
33
34
5.5
127
134
6.5
14
15
16
16
4.2
30
31
33
35
6.1
53
57
60
64
68
6.8
434
461
493
529
565
6.8
3,289
o
31
120
48
50
53
56
59
62
5.3
103
110
117
125
134
143
6.8
NA
NA
NA
NA
NA
NA
—
3,513
3,686
3,882
4,085
4,285
5.0
3,357
Fo
r
Pr
†At average 2011 exchange rates. Sources: PricewaterhouseCoopers LLP, Wilkofsky Gruen Associates
29
112
U
South Korea
s
Japan
es
Asia Pacific
n ly
2007
se
Concert and music festival market† (US$ millions)
Drill down through data across segments, components, and territories. Visit the online Outlook at www.pwc.com/outlook
288
PwC | Global entertainment and media outlook: 2012–2016
Latin America The outlook in brief
• Overall recorded music spending will rise from $657 million in 2011 to $711 million in 2016, a 1.6 percent increase on a compound annual basis.
• Broadband growth, rising smartphone and tablet penetration, and new services will drive digital spending.
• Physical distribution will decline from $470 million in 2011 to $336 million in 2016, a 6.5 percent decrease compounded annually.
• Piracy and growth in legitimate digital formats will lead to declines in physical distribution. • Local festivals will boost the concert and music festival market.
• Digital distribution will reach $375 million in 2016, growing at a 14.9 percent compound annual rate from $187 million in 2011.
Overview
ly
• Concerts and music festivals will grow from $602 million in 2011 to $832 million in 2016, a 6.7 percent compound annual increase.
n
• Spending rose 1.5 percent in 2011 as a 6.0 percent increase in concerts and festivals offset a 2.2 percent decline in recorded music.
o
• The overall music market will expand at a 4.2 percent compound annual rate to $1.5 billion in 2016 from $1.3 billion in 2011.
2008
U 2010
2011p
2012
2013
2014
2015
2016
569
514
470
436
406
379
357
336
135
187
219
255
291
332
375
622
80
113
158
Total recorded music
835
735
704
672
657
655
661
670
689
711
Concerts and music festivals
501
525
559
568
602
643
686
742
773
832
1,260
1,263
1,240
1,259
1,298
1,347
1,412
1,462
1,543
Digital distribution
Total
1,336
Fo
Physical distribution
r
755
Pr
Recorded music
2009
es
2007
s
Music market by component† (US$ millions) Latin America
se
• The recorded music market will turn around in 2013 as gains in digital spending begin to offset ongoing declines in physical spending.
†At average 2011 exchange rates. Sources: PricewaterhouseCoopers LLP, Wilkofsky Gruen Associates
Music market growth by component (%) Latin America
2007
Recorded music
2008
2009
2010
2011p
2012
2013
2014
2015
2016
2012–16 CAGR
Physical distribution
–19.5
–17.6
–8.5
–9.7
–8.6
–7.2
–6.9
–6.7
–5.8
–5.9
–6.5
Digital distribution
158.1
41.3
19.5
17.0
18.4
17.1
16.4
14.1
14.1
13.0
14.9
Total recorded music
–13.8
–12.0
–4.2
–4.5
–2.2
–0.3
0.9
1.4
2.8
3.2
1.6
5.3
4.8
6.5
1.6
6.0
6.8
6.7
8.2
4.2
7.6
6.7
–7.5
–5.7
0.2
–1.8
1.5
3.1
3.8
4.8
3.5
5.5
4.2
Concerts and music festivals Total
Sources: PricewaterhouseCoopers LLP, Wilkofsky Gruen Associates
Music | Latin America
289
• Mexico and Brazil are the largest markets, at $454 million and $453 million, respectively, in 2011. In Mexico, spending was flat in 2011 as a 5.3 percent decline in recorded music was offset by a 6.3 percent increase in concerts and music festivals.
• Colombia and Argentina were next, at $155 million and $108 million, respectively, in 2011. Colombia rose 1.3 percent as a 5.7 percent increase in concerts and music festivals offset a 2.4 percent drop in recorded music.
n ly
• Argentina recorded the steepest decline of any country in Latin America in 2011, with a 2.7 percent decrease. Recorded music fell 10.0 percent, offsetting a 5.9 percent increase in concerts and music festivals.
• Brazil rose 4.6 percent fueled by a 3.4 percent increase in recorded music, the only country in Latin America to register in 2011 a gain in recorded music and a 6.1 percent increase in concerts and music festivals. Music market by country† (US$ millions)
2014
2015
2016
2012–16 CAGR
108
109
112
115
1.3
477
501
539
548
587
5.3
69
72
73
77
80
3.3
158
162
167
173
179
2.9
454
466
482
502
528
558
4.2
21
21
22
22
24
24
2.7
1,259
1,298
1,347
1,412
1,462
1,543
4.2
2009
2010
2011p
2012
Argentina
135
127
120
111
108
107
Brazil
457
393
419
433
453
Chile
69
69
70
69
68
Colombia
150
155
157
153
155
Mexico
506
495
476
454
19
21
21
20
1,336
1,260
1,263
1,240
U
r
Digital distribution
Fo
Recorded music
Pr
†At average 2011 exchange rates. Sources: PricewaterhouseCoopers LLP, Wilkofsky Gruen Associates
s
Total
es
Venezuela
• Digital unit downloads rose 13.6 percent in 2011, and digital spending increased by 18.4 percent. • Apple’s iTunes, the hugely popular digital download service, launched throughout the region in 2011 following its introduction into Mexico in 2009. • New streaming service Rara launched in Mexico in 2011, and Sonora is available in Brazil, Colombia, and Argentina.
2013
o
2008
se
2007
Latin America
• Broadband penetration is growing rapidly in Latin America, and high-speed wireless networks are being rolled out. Smartphones and tablets also are penetrating the market, which is expanding the potential market for digital music and attracting new services. • We project digital unit downloads to increase at a 9.3 percent compound annual rate during the next five years from 158 million in 2011 to 248 million in 2016. • We project spending on digital music to increase to $375 million in 2016, a 14.9 percent compound annual gain from $187 million in 2011.
• Except for Venezuela, a wide array of digital services is now available in each country, which is stimulating the market.
For digital recorded music unit sales data, visit www.pwc.com/outlook
290
PwC | Global entertainment and media outlook: 2012–2016
Digital recorded music market† (US$ millions) 2008
2009
2010
2011p
2012
2013
2014
2015
2016
2012–16 CAGR
4
5
6
7
8
9
11
12
14
16
14.9
Brazil
14
26
38
49
63
78
93
108
123
138
17.0
Chile
4
6
7
8
9
10
12
13
15
17
13.6
Colombia
10
13
15
16
18
21
23
26
29
32
12.2
Mexico
47
62
68
77
87
99
113
129
147
167
13.9
1
1
1
1
2
2
3
3
4
5
20.1
80
113
135
158
187
219
255
291
332
375
14.9
Venezuela Total
n
Argentina
ly
2007
Latin America
Physical distribution
• We project spending on physical music to fall at a 6.5 percent compound annual rate to $336 million in 2016 from $470 million in 2011.
s
U
• Physical unit sales fell 10.1 percent in 2011. Piracy and competition from legitimate digital services continue to erode the physical market.
se
o
†At average 2011 exchange rates. Sources: PricewaterhouseCoopers LLP, Wilkofsky Gruen Associates
Pr
es
• We look for this trend to continue, with unit sales falling at a 7.6 percent compound annual rate to 49 million by 2016 from 73 million in 2011.
Total recorded music • Gains in digital spending will begin to offset declines in physical spending in 2013. Total spending on recorded music will increase at a 1.6 percent compound annual rate to $711 million in 2016 from $657 million in 2011.
r
Physical recorded music market† (US$ millions)
Argentina
2007
2008
2009
2010
2011p
2012
2013
2014
2015
2016
2012–16 CAGR
87
76
64
53
46
41
36
33
30
27
–10.1
Fo
Latin America
272
187
189
186
180
174
168
162
156
150
–3.6
Chile
37
34
32
29
26
24
23
21
20
19
–6.1
Colombia
77
76
72
67
63
59
56
53
51
49
–4.9
272
238
201
169
146
129
115
103
93
85
–10.3
10
11
11
10
9
9
8
7
7
6
–7.8
755
622
569
514
470
436
406
379
357
336
–6.5
Brazil
Mexico Venezuela Total
†At average 2011 exchange rates. Sources: PricewaterhouseCoopers LLP, Wilkofsky Gruen Associates
For physical recorded music unit sales data, visit www.pwc.com/outlook
Music | Latin America
291
Recorded music market by country† (US$ millions) 2008
2009
2010
2011p
2012
2013
2014
2015
2016
2012–16 CAGR
91
81
70
60
54
50
47
45
44
43
–4.5
Brazil
286
213
227
235
243
252
261
270
279
288
3.5
Chile
41
40
39
37
35
34
35
34
35
36
0.6
Colombia
87
89
87
83
81
80
79
79
80
81
0.0
319
300
269
246
233
228
228
232
240
252
1.6
11
12
12
11
11
11
11
10
11
11
0.0
835
735
704
672
657
655
661
670
689
711
1.6
Argentina
Mexico Venezuela Total
se
o
†At average 2011 exchange rates. Sources: PricewaterhouseCoopers LLP, Wilkofsky Gruen Associates
n ly
2007
Latin America
Concerts and music festivals
• We expect that the market in Brazil will benefit in 2014 and 2016 from international visitors for the FIFA World Cup and Summer Olympics, respectively.
U
• The concert and music festival market rose 6.0 percent in 2011 to $602 million.
• In Latin America there is strong interest in music, and local festivals are doing well.
es
s
• The popular Lollapalooza Festivals in the United States also are presences in Brazil and Chile, attracting name acts in 2011 such as Foo Fighters and Arctic Monkeys. In Brazil in 2011, the Rock in Rio festival attracted a daily audience of more than 100,000 to see international and local acts. Rock in Rio will return to Brazil in 2013. Rock festivals in Brazil are being boosted by economic growth.
r
Pr
• An expanding economy should continue to propel this market, which we expect will expand at a 6.7 percent compound annual rate to $832 million in 2016.
Fo
Concert and music festival market† (US$ millions) 2008
2009
2010
2011p
2012
2013
2014
2015
2016
2012–16 CAGR
44
46
50
51
54
57
61
64
68
72
5.9
Brazil
171
180
192
198
210
225
240
269
269
299
7.3
Chile
28
29
31
32
33
35
37
39
42
44
5.9
Colombia
63
66
70
70
74
78
83
88
93
98
5.8
187
195
207
208
221
238
254
270
288
306
6.7
8
9
9
9
10
10
11
12
13
13
5.4
501
525
559
568
602
643
686
742
773
832
6.7
Latin America Argentina
Mexico Venezuela Total
2007
†At average 2011 exchange rates. Sources: PricewaterhouseCoopers LLP, Wilkofsky Gruen Associates
292
PwC | Global entertainment and media outlook: 2012–2016