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The Sky Is Rising,” Which Looked at the State of the Global Entertainment Industry, Focusing on Four Key Creative Sectors: Music, Books, Video and Video Games

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The Sky Is Rising,” Which Looked at the State of the Global Entertainment Industry, Focusing on Four Key Creative Sectors: Music, Books, Video and Video Games REGIONAL STUDY Michael Masnick Michael Ho GERMANY | FRANCE | UK | ITALY | RUSSIA | SPAIN GERMANY | FRANCE | UK REGIONAL STUDY ITALY | RUSSIA | SPAIN BOOKS GAMES MUSIC Video MORE BOOKS ARE GAMING IS ON MORE LEGAL A RECORD YEAR BEING PUBLISHED THE RISE ACROSS SERVICES APPEAR FOR THE EUROPEAN THAN EVER BEFORE: EUROPE: EVERY YEAR: FILM INDUSTRY: 250 €6.4-billion 150 !"#$%&'()*$+)$,-&).#$//0)1233 1995 2008 0.7% since 2010 327,264 * 40-Million 2011 50 !4)5&'6"#&)789/ = 10,000 562,633 books = 1,000,000 1,285 %#$:"-&:);()1233 *2010 data fOR gamers 07 08 09 10 11 Germany & Italy 2010 Number of Authorized Feature Films Produced Books Published by Year 95-Million Music Services in All Studied Markets GERMANY, FRANCE, UK, ITALY, RUSSIA, SPAIN Total European GERMANY, FRANCE, UK, ITALY, RUSSIA, SPAIN GERMANY, FRANCE, UK, ITALY, RUSSIA, SPAIN Gaming Population 1,200 LIVE MUSIC MARKETS EBOOK MARKETS ARE GROWING: 1000 ARE GROWING: of adults have played a video game in the Live Revenues by Country 800 2010 ¼ last 6 months (2010) 2013 PROJECTION & Y.O.Y. CHANGE FROM 2007 05 06 07 08 09 (millions of euros) 351 Gaming isn’t just for the young. Almost 30% of 30 GERMANY – $2.16B 20% Films by Country 2009 to 49-year-olds are gamers. France – $1.2B 15% 2009 TOTAL & Y.O.Y. CHANGE FROM 2005 2008 196 GERMANY – 216 48% 117 Game Consoles In UK – $2.69B 10% Europe, 2006-11 France – 230 4% Total European ITALY – $800M 15% Digital Book Market 150-mil RUSSIA – $1.47b 105% UK – 126 19% eBook Market 75-mil SPAIN – $654M 11% ITALY – 131 34% Growth by Country RUSSIA – 253 57% 06 07 08 09 10 11 Live Music Revenues GERMANY 77% (2010-11) with 2013 Projection SPAIN – 186 31% France 315% (2010-11) UK, France, Italy, Spain, Germany, Russia $9-bil UK 54% (2010-11) REVENUES TREND UPWARDS IN ALL $8.5-bil TV MARKETS ITALY 740% (2010-11) STUDIED MARKETS: ARE GROWING: $8-bil RUSSIA 30% (2009-10) Total Video Game Television Revenues Industry Revenues $7.5-bil in All Studied Markets SPAIN 37% (2010-11) 07 08 09 10 11 12 13 GERMANY, FRANCE, UK, ITALY, RUSSIA, SPAIN GERMANY, FRANCE, UK, ITALY, RUSSIA, SPAIN $15-Bil $100-bil $10-Bil $80-bil $5-Bil $60-bil 06 07 08 09 10 11 06 07 08 09 10 11 12 FACT SHEET REGIONAL STUDY Germany Video Games Game Industry Revenues Source: PwC » SociAl gAming upstArt WoogA hAs $3-bil already hit 45-million monthly users $2.5-bil since it launched in 2009 » In 2009, the two fAstest-growing IT $2-bil compAnies in GermAny were video gAme compAnies $1.5-bil 06 07 08 09 10 11 Music Video Authorized Online Music Services FIlms Produced Source: UNESCO 250 2007 2011 68 175 11 518% 100 05 06 07 08 09 2011 Digital Music Revenues !"#!$%&'$()*+$,-&.. €247-million 21% €900-million 4.1% Source: BVMI Books Number of Books Published Source: UNESCO 2010 Book Industry Revenues $6.3-billion 5% OVER 2008 2010 1995 95,838 » According to A Börsenverein study, 74,174 2-million ebooks were sold to 540,000 29% ebook consumers in 2010. FACT SHEET REGIONAL STUDY France Music Digital Music Revenues Live Music Revenues Source: IFPI With 2013 Projection. Source: PwC $1.2-bil 2011 2010 $215m $275m $1.1-bil 27% $1-bil 07 08 09 10 11 12 13 Video Video Games Television Revenues Source: IHS ,;3+$<=02.>-?$/+@+=2+.$Source: PwC $20-bil $4-bil $15-bil $3-bil $10-bil $2-bil 06 07 08 09 10 11 12 06 07 08 09 10 11 !"##$%&'$()*+$/+*&-0 » France has had tax breaks for video game developers since 2007, long €1.4-billion 27% before most European countries Books 1234+-$&5$%&&6.$72489.:+0 Source: UNESCO »)5#'(-&)<'/)6=&)7#/6)!4)('6;$()6$) reduce VAT rates on eBooks to be on par with printed books 2011 » The market share of eBooks in 1995 France grew from just 0.2% in 2010 34,766 62,278 to nearly 2% in 2011 79% » Amidst economic turmoil, publishing revenues held steady from 2008-10 FACT SHEET REGIONAL STUDY United Kingdom Video %&'$()*+$,-&.. Television Revenues Source: IHS £1-bil $25-bil £0.8-bil $20-bil £0.6-bil £0.4-bil $15-bil 00 01 02 03 04 05 06 07 08 09 06 07 08 09 10 11 12 Music Books A2>:&-9B+0$(=89=+$C2.9*$D+-@9*+. Number of Books Published Source: UNESCO 2007 2011 2011 1995 71 149,800 14 407% 101,764 47% » UK digital music revenues surpassed physical revenues, leading to music » eBook market share grew from just revenue growth of 2.7% from 2011-12 2-3% in 2010 to 7% in 2011 Video Games Game Industry Revenues Source: PwC » Video games have the highest growth $5-bil rate of all creative industries in the UK » Video games account for a third of all $4-bil creative industry exports » In 2009, video game sales exceeded $3-bil -$(/"9&#)/%&(:;(.)$()789/ $2-bil 06 07 08 09 10 11 FACT SHEET REGIONAL STUDY Italy Music Digital Music Revenues Live Music Revenues Source: IFPI With 2013 Projection. Source: PwC $800-mil 2011 2010 $42m $49m $700-mil 16% $600-mil 07 08 09 10 11 12 13 Video Video Games Television Revenues Source: IHS Game Industry Revenues Source: PwC $15-bil $1.5-bil $12-bil $1.2-bil $9-bil $0.9-bil $6-bil $0.6-bil 06 07 08 09 10 11 12 06 07 08 09 10 11 Films Produced in 2009 » The Italian government has proposed tax breaks for video game developers, 131 27% OVER 2005 though EU regulations could interfere Books Number of Books Published Source: UNESCO » The market share of eBooks in Italy grew from less than 0.1% in 2010 to about 1% in 2011 2010 » Amidst economic turmoil, publishing 1995 revenues held steady from 2008-10 34,470 57,558 67% FACT SHEET REGIONAL STUDY Russia Video Films Produced Television Revenues Source: UNESCO Source: IHS $8-bil 2009 2005 161 253 $6-bil 57% $4-bil 06 07 08 09 10 11 12 Music Video Games Live Music Revenues Game Industry Revenues With 2013 Projection. Source: PwC Source: PwC $1.5-bil $1.2-bil $1.2-bil $1-bil $0.9-bil $0.8-bil $0.6-bil $0.6-bil 07 08 09 10 11 12 13 06 07 08 09 10 11 » Digital music revenues imploded from » Electronic Arts predicts the Russian 2010 to 2011, falling by 41% to $43-mil. game market will hit $1.5-bil by 2015 Books Number of Books Published eBook Readers Sold Source: UNESCO Source: India & Russia Report/Marina Rozhkova 2008 2011 2010 1995 60,000 33,623 122,915 470,000 266% 683% FACT SHEET REGIONAL STUDY Spain Music Live Music Revenues Authorized Online Music Services With 2013 Projection. Source: PwC $700-mil 2011 2007 $600-mil 31 9 244% $500-mil 07 08 09 10 11 12 13 Books Video Games Number of Books Published Game Industry Revenues Source: PwC Source: UNESCO $2-bil 2011 1995 $1.5-bil 48,467 74,244 53% $1-bil 06 07 08 09 10 11 » Spain’s book market lost some ground » In 2010, 52% of 16-29 year olds and during the global recession, falling from 27% of 30-49 year olds played video $2.3-billion in 2008 to $2-billion in 2010 games (Source: ISFE/GameVision) Video FIlms Produced Source: UNESCO 200 »)>=&)1233)?%'(;/=)789)No Habrá Paz Para Los Malvados found success without content windows: it was 150 released simultaneously in theaters, on DVD, on pay-TV, and online. 100 05 06 07 08 09 Introduction At the beginning of 2012, we released our report, “The Sky is Rising,” which looked at the state of the global entertainment industry, focusing on four key creative sectors: music, books, video and video games. What we !"#$%&'($')"($)'*+,"#)+'-'.()$(/0-$*'-1"#$*'"!'%-*-&'2-.'*+-*'0"$*,-,3'*"'*+4'.*",(4.'"!'%""1'-$%')5""1' concerning content, we are actually living in a true renaissance period of abundance, with each industry growing in terms of revenue — but even more impressively in terms of content output, often expanding at unheard of rates. We looked at traditional metrics as well as some new business models that were either catching on, or 2+(0+'24,4'-*'54-.*'%,-2($)'.()$(/0-$*'($*4,4.*6'7+-*'24'!"#$%'2-.'-'2",5%'!#55'"!'"88",*#$(*3'-$%'),"2*+6' 9*'*+4'.-14'*(14&'24'$"*4%'*+-*'*+4,4'24,4'.()$(/0-$*'0+-554$)4.'!",'0"$*4$*'0,4-*",.:'1-($53'($'54-,$($)' to navigate this new world where (1) the process for becoming successful was not as clear on a map — even if there were many more opportunities to succeed and (2) that there was much greater competition, both 2(*+($'*+4'.840(/0'/45%'*+43'24,4'($&';#*'-5."'-0,"..'"*+4,'/45%.'"!'4$*4,*-($14$*6 In our follow-up report, which you’re now reading, we wanted to focus in on a few additional countries to )4*'-';4**4,'#$%4,.*-$%($)'"!'2+4*+4,'",'$"*'*+4'.-14'8-**4,$.'-,4'*,#4'2(*+($'.840(/0'40"$"1(4.6'<+4' 0"$04,$&'"!'0"#,.4&'(.'*+-*'2(*+($'*+4'5-,)4,'-)),4)-*4'%-*-&'(*=.'8"..(;54'*+-*'.()$(/0-$*'%(!!4,4$04.'($'04,- tain countries could skew the overall data. For this report, we chose to focus on these six major economies: Germany, France, the UK, Italy. Russia and Spain. What we found was, as expected, not all economies are the same — and some of those economies are in serious turmoil — but that the overall trend lines are similar in direction.
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