MediaTainment

FINANCE Issue No. 14

For Decision-Makers and Strategists Who Value Creativity and Appreciate the Value Creativity Brings to Business

www.mediatainmentfinance.com Facebook: MediaTainment Finance; Twitter: @MediatainmentMT; @JayKayMed

NEWS … 3-14 film: Toast & Jam goes sweet on film ; Expendables producer in WWII drama tv: Print media tune into TV; Goldman Sachs sells 50% of CSI music: Nitin Sawhney in direct-to-disc history games: UK tax relief delayed; Investors spin new Carmaggedon fashion: Qatar fund escalates stake in Tiffany’s M architecture: 3D printer revolutionises home building I PC books/prints: Time Warner; Harlequin romances e-books ub T e fu he f ads/marketing: Stephen King’s novel digital campaign t s ev ur ec e e- o r sport: Europe’s richest soccer players o nd i H f-T e s e V di b d ad e ti a copyright: Illegal to retransmit live broadcast u t v on c T 8 ri o en o k u - n C t f n 11 g a h th live entertainment: India backs theme-park tourism e A M nn ea e in p IP e ts to ri T s u photography/art: Photographer in censorship lawsuit w o l 2 V p w r 0 w 13 .m ip cu be FEATURES & REPORTS .c om

GERMANY: Europe’s biggest economy is stuck right in the middle of the never-ending fiscal euro crisis; but this country has spawned some of the world’s biggest media empires, and foreign investors are lining up for a share …page 15

MIPCube Feature: FELIX BAUMGARTNER & RED BULL MEDIA HOUSE Sports, brand and media collaborations flew to new heights when skydiver Baumgartner jumped from the edge of space and became the first human to break the speed of sound in free fall; find out how Red Bull and Red Bull Media House used new technology to give him wings - literally ...page 26

AL JAZEERA: The US Administration is said to have denounced it as “the terrorist network” but it recently took over one of America’s most respected TV channels; what is Al Jazeera up to globally and how does its country of origin, Qatar, fit in? …page 34

MTF FORUM: THE e-BOOKONOMY Don’t turn your nose up at e-readers; those clunky-looking devices might hold more than just text and be key to the next generation of multi-content digital devices ...page 39 Content March/April 2013

NEWS NEWS

Film: Page3 Page 13: Photography/Art

Television: Page4 Page 14: Copyright

Music: Page5 REPORT Page15: Country Profile - GERMANY

Games: Page6 FEATURES Page26: MIPCube Q&A Sessions - FELIX BAUMGARTNER & Out-Of-Home: Page7 RED BULL MEDIA HOUSE

Page34: Creative Corporate - AL JAZEERA MEDIA Sport: Page8 NETWORK

Page39: Feature Forum - BOOKS Ads & Marketing: Page9 Page37-38: MTF DIARY listing of international conferences and events Architecture/Design: Page10 Back Page: ABOUT MTF

Books/Print: Page11

SUBSCRIPTION: To subscribe to the most enriching and enlightening aide to your media Fashion/Luxury: Page12 and entertainment business strategies, contact [email protected] FILM

Toast & Jam firm hungers for new films

US investment bankers Neil Grossman and Howard Silverman have launched Toast & Jam Hold- ings, a joint venture with California-based film production-and-distribution outfits Cosmic Toast Studios and Cinipix. The new umbrella company was set up after Grossman and Silverman injected “significant” investment in the venture. Toast & Jam will operate Burbank-based Cosmic Toast Studios, which is a production-and-animation studio that also offers pre-production and post- production services. Cinipix will act as producer to several films a year, including those created at Cosmic Toast Studios. Additionally, it will offer finance, post-production and distribution services to productions at Cosmic Toast Studios and by third parties. Recently completed films on Cinipix’ cata- logue include horror-action movie Raze; thriller The Devil’s Ink, which is released next year, and comedy drama Gangbusters. Grossman’s finance experience includes his role as CEO at hedge- fund company TKNG Capital.*Meanwhile, Spanish telecoms giant Telefonica has led a round of investments via Kibo Ventures, a Madrid-based venture-capital fund supported by Spain’s government that has injected US$1m into Visualnet.com. An online directory and marketplace for the international film and TV-production business, Visualnet.com was launched in 1997. Its registered users include 20,000 producers. Kibo Ventures is its first private institutional investor.

Expendables producer bets Raine and China Media Capital $80m on Sino-US WWII drama fund new digital talent

Thunder Road Pictures, the US production The Raine Group, the media-investment firm company that backed the 2010 box-office hits backing the new US$300m Important Studios The Town, Clash of the Titans and The (MTF Issue13), has formed a strategic part- Expendables, is co-producing B-29 Friend- nership with China Media Capital’s (CMC) ship, an US$80m Chinese-US movie about US$805m fund. They will invest in digital- the conflicting relationships between the US, media and sports entertainment, including Japan and China during World War II. The videos, for the Chinese and international Town, Clash of the Titans and The Expenda- markets. Raine brings its well-connected con- bles have generated more than US$878m in tacts, including Hollywood talent agency WME international box-office receipts. *Unifrance, Entertainment, to the fold. CMC’s commitment the organisation that markets French movies to the international movie industry is seen in overseas, has opened new offices in Los last year’s launch of OrientalDreamWorks with Angeles and Mumbai. Hollywood’s DreamWorks Animation.

German animator, movie kit New venture counts on Hong vendor seal co-production deal Kong’s Seven Stars, Huaxia

Trixter, the US-German animation- Hong Kong-based Seven Stars Film production and visual-effects company, and Studios, a subsidiary of Seven Stars Entertain- Munich-based cinematography-equipment ment Group, has formed Huaxia-Seven Stars manufacturer Arri Group, have joined forces to Film in a joint venture with China’s Huaxia co-produce and sell animation films to the Film Distribution. The new production firm will international market. First off the partnership’s be based in mainland China with a Hong Kong slate is Ploe – You’ll Never Fly Alone, a family office acting as the international distributor for movie that has been developed by Iceland- its productions. The new venture is also based production company GunHil. It will be reported to have plans for a US Chinese- directed by Arni Olafur Asgeirsson. It is movies cable-TV network. Seven Stars Film scheduled for release at the end of 2015. Studios is to start shooting The Last Empress, a China-US co-production, later this year. TV is never going to be the same again 8-11 April 2013 in Cannes, France Watch this space TELEVISION www.mipcube.com Print media tuning into the TV space

The international print media are turning cartwheels in the TV industry with their own broadcast and online TV services. In March, Conde Nast announced plans to invest in original TV, movie and video content. Conde Nast Entertainment (CNE), the video-entertainment subsidiary of Vogue, Vanity Fair and GQ’s publisher, is introducing a series of 360-degrees digital interactive shows. The content will be linked to Conde Nast’s famous magazine brands, kicking off with GQ and Glamour magazines. The GQ four-part series of short episodes focuses on men’s lifestyle and fashion. The Glamour magazine-branded shows for women include titles like Elevator Makeover and Why Do Guys…. These new CNE multi-platform channels can be accessed via each magazine’s website, IPTV and mobile networks, and dedicated YouTube channels. Conde Nast, which has been diversify- ing its digital-investment strategy, recently spent US$11m on an 11% stake in cloud-based advertis- ing platform Flite. It plans similar commitments to the video-content sector. Feature articles in Conde Nast’s Vanity Fair, New Yorker, and Wired magazines have been the basis of Hollywood-produced hit movies like the recent award-laden Argo. More print-media/TV fusions can be seen at Hearst Corporation’s Esquire magazine, which has agreed to be the brand for NBCUniversal (NBCU) men’s cable channel Esquire Network. It replaces NBCU’s video games-themed G4 channel. Controversial Nigerian/UK publisher Leaders and Company, famous for its glossy fashion magazine Arise, has launched a 24-hour cable-and-satellite news network Arise News to reach the African diaspora. Arise 360, an entertainment sister channel, is scheduled to launch towards the end of 2013.

Goldman Sachs collects $400m Alloy Digital galvanises future for 50% stake in CSI crime hit plans with new $30m finance

Investment bank Goldman Sachs has Alloy Digital (MTF Issue9), the next- sold its 50% stake in CSI: Crime Scene Inves- generation US content producer targeting tigation, the US crime-series franchise once teenage/young adult viewers, has collected hailed as the world’s most watched TV show, US$30m in a Series A funding from ABS for US$400m. The buyer is US investment Capital Partners, a late-stage venture-capital fund Content Partners. The CSI franchise, firm. Alloy Digital, which has 12 million-plus including the CSI: Miami and CSI: New York subscribers on its YouTube channel, will use series, comprises more than 720 episodes. It the funds to acquire more content properties. has yielded more than US$2.5bn in royalties Its other investors include ZelnickMedia, the for the CBS network, which owns the other New York-based media-and-entertainment 50% stake. investment company.

FremantleMedia invests in epic YouTube lures Simon Cowell, High Castle sci-fi, other dramas Ridley Scott to its network

FremantleMedia International (FMI), the Video-sharing giant YouTube has clinched distribution arm of Bertelsmann subsidiary partnerships with two UK entertainment giants. FremantleMedia (MTF Issue13), is hiking its TV impresario Simon Cowell has launched commitment to original drama with The Man in The You Generation, a year-long online talent the High Castle. It is a four-hour epic competition on the website. Described as the miniseries co-produced with Ridley Scott’s “world’s first global audition”, the project aims Scott Free Productions, among other stal- to discover talent that Syco Entertainment warts. Based on Philip K Dick’s sci-fi alternate- might have missed for global format shows history novel, the series is for US cable The X Factor and Got Talent. Ridley Scott, channel Syfy. Other major FMI drama co- UK director of Hollywood hits like Blade productions in development are The Drivers Runner, Alien and Prometheus, is to produce (also with Scott Free); and the acclaimed Joan 12 episodes of original sci-fi shorts for of Arc-themed bestseller The Maid. YouTube channel Machinima. MUSIC

UK composer in direct-to-disc history

The UK independent recorded-music sector is bolstering its investment in production at a time the major labels are expanding via acquisitions. Cherry Red Records and Metropolis Recordings have joined forces with prolific UK composer Nitin Sawhney to produce the first live direct-to-disc vinyl album for international release in 35 years. The collaboration, for which session musicians play live for 15 minutes in one error-free take, takes place at Metropolis’ London studios on 6 April. The cut, called OneZero, is released on 24 June. The music includes re-recordings of Sawhney’s back catalogue and preview tracks from his 10th studio album Dystopian Dream, which is out later this year. OneZero will be available in the form of limited-edition boxsets of four vinyl discs featuring the live recordings, a bonus vinyl disc of outtakes, a double-CD edition, a CD single, a DVD plus a 24- page book. Sawhney, who has worked with Paul McCartney and Sting among other music stars, has composed for movies, TV, theatre and video games. *CV Group, a venture capital-backed operation that owns the UK independent label Cooking Vinyl (see MTF Issue2), has been on a signing spree. For its DoubleCross imprint, Cooking Vinyl has signed a global recording deal with Skindred, the Welsh ragga-metal band, plus a UK/Ireland distribution agreement with Finnish band HIM. It is also be providing global marketing and distribution services for the eighth studio album by Alison Moyet. Private fund buys top US indie Universal, Disney form new Concord Music Group creative partnership

Private investment’s faith in musical record- Universal Music Group (UMG) and Walt ings was confirmed when US management- Disney’s Disney Music Group (DMG) have fund Wood Creek Capital Management agreed formed a “long-term” global commercial and to buy Concord Music Group, a major US creative deal after they recently extended an independent label and publishing company, in already existing partnership. They will jointly March. It was bought from US film-production distribute and market DMG releases by artists giant Village Road Show Entertainment for a like Selena Gomez and Demi Lovato, plus reported $120m-plus. * New York-based inde- release soundtracks from Disney movies, as pendent music-publishing group Reservoir they have been doing for 18 years. And, for Media Management has bought UK publisher the first time, there will be creative collabora- P&P Songs for an undisclosed sum. Reservoir tions between Disney labels and artists and snapped up another British independent UMG’s producers and songwriters. publisher Reverb Music last September.

BMG France nabs world-music Rights powerhouse Kobalt in catalogue featuring Fela Kuti new joint publishing venture

BMG France has acquired FKO Music, Kobalt, the fast-growing international labels which is famous for its rights to several ‘world- -services and copyright management group, is music’ stars, including the late Fela Kuti, the to form And Publishing, a music-publishing Nigerian Afrobeat pioneer and political activist. venture that is jointly owned with Danny The deal also brings BMG France the rights to Rogers, manager of Australian hit act Gotye, works by Grammy-nominated Femi Kuti, and Adam Tudhope, manager of Grammy- Fela’s eldest son, plus compositions from award winning folk-rock band Mumford & French folk-rock band Tetes Raides, and Sons. And Publishing will have offices in electro/pop artist Rachid Taha. BMG will London and Sydney plus US representatives. administer the rights to the FKO catalogue and develop song-writing talent in a joint venture with FKO founder Francis Kertekian. GAMES

UK games tax relief scheme delayed

The UK games sector might have to wait a little longer before it benefits from the new creative industries’ tax relief being introduced by the government this year. UK Chancellor of the Exchequer George Osborne announced last December that the games, animation and high-end TV drama busi- nesses will be entitled to tax relief, a state aid that only the film-production sector has benefited from. The tax incentive for TV dramas and animation are scheduled to start on 1 April. However, the video- games relief will be delayed while it awaits state-aid approval. The state-aid approval has to meet the conditions set by the European Community Treaty. To qualify, the video game must target consum- ers, must be registered in the UK and at least 25% of the budget must be spent in the UK. There is no minimum threshold for the expenditure. The storyline, characters and locations within a game’s narrative must originate from the UK or the European Economic Area (the European Union, Norway and Liechtenstein). The production team must come from these regions and the game must contrib- ute to or enhance British culture. The delay is from the European Commission (EC), which must en- sure state aid does not distort commerce competition. The UK government and TIGA (the UK games sector’s trade body) are currently working to ensure the games sector complies with the EC.

Investors rescue Carmaggedon Ex-EA executive tilts $40m in IV from crashing with $3.5m direction of new developers

UK developer Stainless Games has raised Tilting Point, a new US independent US$3.5m for Carmageddon: Reincarnation, publisher launched by former Electronic Arts the fourth title from the violent auto-combat (EA) executive Tom Frisina, has announced series Carmageddon. Originally released for plans to invest US$40m in mobile-device the PC in 1997 and influenced by the 1975 games in the next three years. Frisina says he cult movie Death Race 2000, Carmageddon and his investor partners will focus on games was followed by Carmageddon II and developed for smartphones and tablets. Tilting Carmageddon TDR. Reincarnation originally Point is already working with established raised US$625,000 via crowdfunding website developers such as Housemarque, Signal Mo- Kickstarter but needed US$4m to be fully bile (part of Signal Studios) and 1337 Game financed. The new-round of private investors Design & Senri, with plans to launch its first include Les Edgar, an existing Stainless titles later this year. Games investor.

Start-up developer Nonstop Moonlighting Pixar animators reaps $2.9m for expansion unveil first new game title

Creandum, the Stockholm-based venture- Steel Wool Games, the California-based capital firm, and Finnish investment company developer co-founded by executives from Lifeline Ventures are investing US$2.9m in movie-animation giant Pixar, has unveiled its Nonstop Games, the start-up developer with first release: the Flyhunter. Scheduled to offices in Singapore and Finland. Formerly come out sometime this year, it will be known as GamesMadeMe, Nonstop will use published by UK-based Ripstone, the PC and the newly acquired cash to set up another Sony PlayStation specialist. Steel Wool says office in Silicon Valley and create and release its games will be “grimsical”. Co-founders more titles for Android and Apple’s iOS mobile Sequoia Blankenship, Andrew Dayton, Jona- devices. The first title expected for 2013 is than Hoffman, Joshua Qualtieri and Jason Heroes of Honor, a fantasy-themed game. Topolski are Pixar full-timers so work on Flyhunter is only after hours. OUT-OF-HOME

India bolsters theme-park tourism

Indian investment in out-of-home tourism has picked up with two proposed multi-million dollar pro- jects in the next few years. The government has unveiled a US$184m scheme to build 20 tourism parks across the country. Part of the nation’s five-year economic plan, each park would be about 50 acres in size. They will contain amusement parks, convention centres, family-entertainment and educational centres, cultural shows, restaurants, hotels and sports facilities. The initiative, currently in consultation with the out-of-home entertainment sectors and the National Tourism Advisory Centre, aims to mirror similar operations in countries like Singapore and Mexico, according to Attractions Management magazine. Additionally, the government hopes to exploit the parks’ commercial potential to boost the ethnic arts and crafts businesses in nearby rural areas. On the private-business front, Mumbai-based property developer Adarkar Associates is to build a US$29m theme park devoted to Mahatma Gandhi, India’s spiritual and nationalism leader during the British colonial days, as well as an adjacent convention centre. The Gandhi for Tomorrow educational theme park will cost about US$11m. It will be located in the town of Sevagram, in the western Indian state of Maharashtra where Gandhi spent several years of his life. Adarkar Associates is also planning a US$18m international convention centre, which will include education facilities for studies in Gandhi’s philosophy on rural life. Yahoo! dances with live music AEG high-profile sale is off; in first international tour no one could afford $8bn

Yahoo!, the pioneering international search Philip Anschutz, the septuagenarian owner engine-cum-web portal, is making live music of live-entertainment, concerts and sports core to a major US and Europe marketing conglomerate AEG, has decided not to sell his roadshow. It is designed to raise the brand’s empire after all (MTF Issue11). He had ap- profile amid tough competition from Google, pointed Blackstone Group to seek a buyer but Facebook and Twitter. Called Yahoo! on the allegedly could not find one willing to part with Road Tour, it includes a series of concerts that the US$8bn wanted. He now plans to expand kicks off in New York on 3 May and ends in his portfolio, which includes AEG Live, the London with the Wireless Festival, which is world’s second biggest concert promoter.*New taking place on 12-14 July at the Queen York’s Madison Square Garden Company has Elizabeth Olympic Park in East London. sold its shares in AEG rival Live Nation Enter- tainment for about US$44m.

New 20,000-capacity arena to Comic super heroes kapow! add razzmatazz to Las Vegas their way to $10m live show

AEG and MGM Resorts International, the Vienna-based Feld Entertainment, famous Las Vegas casino-to-live entertainment group, for its circuses and the Disney on Ice shows, are joining forces to open a new 20,000- is bringing Spider-Man, the Hulk, Iron Man, the capacity arena in the desert gambling city. It X-Men, Captain America, Thor and other will host concerts, sports events like boxing Marvel-comics super heroes to life in a new and other live shows. The Hollywood Reporter US$10m-plus arena show. It follows a deal says the new venue is likely to be funded by with Marvel Entertainment Group and is AEG, MGM Resorts and private third parties. expected to open next year. It is separate from The arena is reported to be part of plans to Broadway’s Spider-Man: Turn off the Dark, for regenerate that part of Las Vegas, which which U2 rock stars Bono and The Edge wrote already features MGM Resorts’ hotel-casinos. the music. Marvel is a Disney subsidiary. SPORT

Soccer chief: Stop indentured slavery

The value of international soccer players is triggering heated debates following an attack on the practice known as third-party player ownership (TPO). According to Sportbusiness.com, the English Premier League’s (EPL) CEO Richard Scudamore has attacked the practice and compared it to “indentured slavery”. Yet, high-profile players like Argentinians Carlos Tevez and Javier Mascherano have controversially relied on TPO investment to boost their international careers. A TPO takes place when a private entity invests in a player and expects a hefty commission when that player is sold from one club to another. It emerged that when Tevez and Mascherano left Brazilian club Corinthians in 2006 for London club West Ham, the deal got convoluted because of TPO. Four companies, in- cluding Media Sports Investments, Global Soccer Agencies and Just Sports, had some financial in- terests in both players. As the nature of the investments was not clear, West Ham ended up being fined. The EPL has banned TPO as have its counterparts in France and Poland. Scudamore, who argues that players’ ownership should be restricted to the clubs, is urging more clubs to prohibit TPO. *France Football’s list of Europe’s richest soccer players ranked David Beckham, currently at Paris Saint-German, as No.1 with €36m a year when his salary, endorsement deals and sponsorship packages are combined. He is followed by Barcelona’s Lionel Messi (€35m); Christiano Ronaldo of Real Madrid (€30m); and Samuel Eto’o at Russian club Anzhi Makhachkala (€24m).

Italy latest country to clamp AS Roma finance talks break down on soccer players’ wages down, and sheikh is out

Italy’s second-division Serie B soccer AS Roma, the Italian soccer outfit in the first- league is the latest European football league division Serie A, has ended talks with a Qatar to clamp down on rising players’ wages. sheik, who had agreed to invest in the club. Following similar moves or considerations by Sheikh Adnan Adel Aref al Qaddumi al Shtewi, the English Premier League, European gov- who originates from Qatar but is a Rome erning body UEFA and the Spanish Football resident, had pledged to invest US$50m by 14 League (MTF Issue 13), Series B’s restrictions March. He is now allegedly being investigated kick into gear with contracts that start July this by Rome’s court prosecutors. The incident will year, according to Sportbusiness.com. Play- not hinder AS Roma, listed on the Borsa ers’ maximum salary will be €150,000 each, Italiana stock exchange, from building its own with a potential bonus of €150,000 linked to 55,000-capacity stadium. performances.

Wrestlers fight back with Dakar Rally replaces Peru campaign after Olympics snub with Bolivia for 2014 race

FILA, the French acronym for the Federa- Bolivia has agreed to replace Peru after tion of Associated Wrestling Styles, is to the latter dropped out of next year’s Dakar launch a World Wrestling Day on 24 May to Rally, the annual long-distance endurance off- encourage its 174 national members to raise road motor race. Bolivia, which is making its greater awareness for the combat sport and debut, is the 28th country to participate. The enhance its profile. The initiative follows the other two countries in the 2014 race are International Olympic Committee’s decision to Argentina and Chile. The race, now in its 35th remove wrestling from the 2020 Olympics, year, kicks off on 5 January from Rosario in which will be held in Tokyo, Istanbul or Madrid. Argentina and ends in Valparaiso, Chile on 18 Additionally, FILA is overhauling its committee January. Peru is expected to re-enter the members before lobbying the IOC for competition in 2015. wrestling’s reinstatement in the Games. ADS & MARKETING

Small-agency size still matters in 2013

As Dentsu, the Japanese ad-agency giant, completes its gargantuan US$5bn acquisition of UK media group Aegis, it seems the 2013 trend is to invest in small. David Jones, global CEO of France- based agency conglomerate Havas and the world’s sixth largest advertising group, recently told analysts and media that the strategy to spend €40m acquiring tiny agencies last year continues. It will focus on agencies seeking finance to grow. “You’re not going to see us write big (cheques) to create digital silos,” he is quoted in US-based Adage.com. Havas, which is 37% controlled by French conglomerate Bollore Group, recently bought shares in Socialistic, a China-based social-media and technology-driven marketing agency. Last year, it took on shares in such digital agencies as Benelux -based Boondoggle; UK-based Creative Lynx; US-based Victor & Spoils; plus several start-ups worldwide. Meanwhile, IPG subsidiary RG/A has opened its fifth US office in Los Angeles. And size does not get smaller than World’s Fastest Agency (WFA). Launched by former UK agency executive Floyd Hayes in March, the new venture takes social-media advertising to a new level. In exchange for US$999, it offers to pitch creative strategies to brand owners in only 140 characters via Twitter. According to media platform BusinessInsider.com, WFA is already working with clients.

Martin Agency lights up start- Traditional UK publisher goes up outfit 80amps as investor digital for Stephen King novel

The Martin Agency, the Virginia-based Traditional book publishers are embracing agency that belongs to US advertising digital marketing as the UK’s Hodder & conglomerate IPG, has invested in a start-up Stoughton (H&S) launches an online cam- incubator called 80amps. Martin is the official paign for Doctor Sleep, US horror author “founding investor” in 80amps, which special- Stephen King’s next novel. Although not ises in helping start-ups develop ideas before published until September, H&S has a website chasing investment. Martin hopes its involve- and Facebook page branded with an interac- ment will enable 80amps develop brands, tive version of the novel’s cover. The site and products, services, plus the related technolo- Facebook page feature an app for fans to gies. Clients of Martin, which offers interactive embed in their own social-media profiles with marketing, data analytics and branded content links to pre-order the book and a video of King among its services, include giant US brands reading extracts. Kraft, Morgan Stanley and Walmart.

Young & Rubicam’s VML opens New boutique agency O’Keefe first digital office in Japan Reinhard & Paul in Windy City

US digital-marketing agency VML, part of IPG is taking a minority stake in O’Keefe WPP’s advertising group Young & Rubicam Reinhard & Paul, a newly launched Chicago- (Y&R), has opened its first Japanese office in based ad agency. The founders are Tom Tokyo. Tokyo represents VML’s most recent O’Keefe, the former executive creative director international opening after London, Milan, San at agency Draftfcb North America; Matt Paolo, Sydney, Auckland, Jakarta, Mumbai Reinhard was most recently creative director and Singapore. In the US, it operates offices in of marketing at Amazon.com; while Nick Paul New York, Seattle and headquarters in Kan- is also a Draftfcb alumnus who used to sas City. Its international expansion is assisted manage global new business development. by the long-established Y&R, which has 186 They hope to capitalise on their experiences offices in 90 countries. with global brands and the nimbleness of the new agency’s boutique size. ARCHITECTURE/DESIGN

3-D printer revolutionises house design

3D-printed architecture is in vogue. 3D-printing technology has so far been used to produce miniature three-dimensional physical objects. But Amsterdam-based DUS Architects wants to use the technique to construct the first 3D-printed building. It is using the purpose-built KamerMaker, an 11.5-foot tall mobile 3D-printing pavilion, to build a complete canal-side house in the Dutch capital. The construction, along Amsterdam’s Buiksloter canal, kicks off later this year. DUS will ‘print’ differ- ent sections and pieces of the house with sturdy polypropylene, which is normally used as packaging and container material, plus recycled plastic. Miniature versions of each room will be built first before the full version is created. DUS, which has the leased land near the Buiksloter canal for three years, believes the structure will hold up for several months. The firm will invite the global architecture profession to benefit from the lessons learned. Another planned 3D-printed home is the 12,000-sq foot Landscape House, the Mobius strip-shaped building by Janjaap Ruijssenaars at another Dutch firm Universe Architecture. Ruijssenaars’ house is scheduled to be completed in 2014 and costs about US$6m. Also competing for the first 3D-printed home is London-based Softkill Design. It says its modular method means it can build different sections off-site, transport them by road to the building site and complete the structure in about three weeks.

Sixties icon venues enter 21st Foster+Partners nabs triple century at London South Bank towers for UK’s Nine Elms

UK-based Feilden Clegg Bradley Studios The UK’s Foster + Partners has clinched the is to design the new floating glass pavilion that contract to design three landmark riverside will drag London’s iconic 1960s-developed buildings located at the Albert Embankment in Southbank Centre and its cultural venues into Central London. The three towers, ranging the 21st century. It is part of a £120m revamp from 15 storeys to 27 storeys high, are part of that will update artistic venues like the the £15bn Nine Elms project, said to be Hayward Gallery, Queen Elizabeth Hall and Europe’s largest regeneration project. The the Purcell Room. Construction starts next towers will contain more than 250 apartments. year for completion in 2017. *Meanwhile, Adjacent to Chelsea Bridge and Lambeth David Adjaye Associates is to design a Bridge, the Nine Elms venture is expected to “fashion hub” in East London in a £100m create 16,000 new fashionable homes plus regeneration scheme. extensive commercial spaces.

GMP in Germany seizes major Quake-resistant library Chinese exhibition contract creator Toyo Ito wins Pritzker

Hamburg-based GMP Architekten has Toyo Ito, the Japanese architect famous for snapped up the commission to design the the Sendai Mediatheque library that withstood National Convention and Exhibition Centre in Japan’s 2011 cataclysmic earthquake, has Tianjin, China. At 1.2 million square metres in won this year’s Pritzker Architecture Prize. size and containing 32 extensive exhibition Considered the profession’s highest accolade, halls, the centre is expected to provide one of the prize includes US$100,000 in cash. The the world’s largest exhibition venues. GMP, award ceremony will be held in Boston on 29 specialists in sports venues, created three of May. Ito, 71, is also a Praemium Imperiale the stadiums used at the 2010 FIFA World award winner. His portfolio includes Taiwan’s Cup competition and four venues for World Games Stadium at Kaohsiung (2009), Shenzhen’s 2011 World University Games. the Tokyo building for Italian fashion retailer Tod’s, plus several other structures in Japan, Barcelona and London.

10 BOOKS/PRINT

Harlequin romances ebooks for growth

The e-book format is driving up the value of book content around the world. The latest e-book news comes from Harlequin Enterprises. The Canada-based international romance and women’s- fiction publisher has added US writer Sylvia Day to its roster with a seven-figure two e-book deal. The contract is via Cosmo Red Hot Reads, a Harlequin joint venture with Hearst Corporation’s Cosmopolitan women’s magazine. Afterburn, the first of Day’s two novellas, comes out in August while the second, Aftershock, is published in November. Both will be available in print later on. Day is famous for her popular Penguin-published erotic Crossfire series that began as a self-publishing venture. She is being hailed as another EL James, of Fifty Shades of Grey fame. But Harlequin, still most famous for the Mills & Boon romance paperback brands, hopes such e-book deals will help boost its future revenues. Red Hot Reads aims to publish two e-books a month. *Harlequin’s UK division is working with biNu, the mobile-Internet service provider targeting developing economies, to sell Mills & Boons e-books to biNu users. BiNu has more than 5 million subscribers in Asia, Africa and Latin America. *Marcus Gipps, editor at UK sci-fi and fantasy specialist Gollancz, has taken to the crowd-funding website Kickstarter to raise £7,000 to re-issue the popular Uncle kids’ stories written during the 1960s/1970s by JP Martin. With still 28 days to go, Gipps had pledges for more than £15,000.

Time Warner to spin off print US activist publisher Melville unit for dual profitability opens shop in England

Time Warner, valued at US$47bn, is to turn US-based independent political-activist the struggling print-media subsidiary Time Inc publisher Melville House Books has told trade into a separate publicly quoted entity. The split magazine The Bookseller that it plans to open is expected to be completed this year. Quoted a subsidiary in London to focus on the British on the New York Stock Exchange, Time market. Melville, which was launched in 2001, Warner had been in talks to merge Time Inc already has two Nobel Prize winners (Imre with rival Meredith Corporation’s magazines. Kertesz and Heinrich Boll) on its roster. Suc- But the talks collapsed when the two parties cess of its US titles in the UK has encouraged failed to agree on the merged entities’ value. Melville to invest in new authors in Britain. Time Inc, the US’ biggest magazine publisher, Melville is also renowned for its provocative has a reported valuation of US$3bn-plus. MobyLives blog.

Random House/Penguin Briefs: UIT Cambridge, Green merger approved by Australia Books, ActuaLitte

Australia’s Competition and Consumer UIT Cambridge, the UK family-owned Commission (ACCC) has given the green publisher specialising in books on computers, light to plans by German media conglomerate technology and science, has agreed to buy Bertelsmann (MTF Issue12) to merge Green Books, which specialises in environ- subsidiary Random House with Pearson’s mental issues. Green Books will become a Penguin Books and create the world’s largest UIT imprint. *ActuaLitte, France’s leading consumer-books publisher. Random House literary and books-industry web portal, has will own 53% of the enlarged group after it acquired Les Histoires Sans Fin, an online receives approval from anti-trust authorities in portal devoted to books for children and young its key markets. The US’ Department of adults. ActuaLitte has hooked up with Google Justice has already given its approval. The Books to create a digital library of books in the European Commission is expected to vote in public domain. favour of the deal in April. FASHION/LUXURY

Qatar fund blings jewellery at Tiffany’s

Qatar Investment Authority (QIA), the Arab state’s sovereign wealth fund with shares in fashion designer Anya Hindmarch (see MTF Issue10) and ownership of fashion house Valentino, has been gradually upping its stake in Tiffany & Co, the multinational jewellery brand owner and silversmith. After it emerged in April last year that QIA held 5.2% of the New York Stock Exchange-listed Tiffany, the fund increased its shares to 8.7% in February. In March this year, QIA snapped up more shares to give it 12.5% of the brand with the Manhattan store made famous in the 1961 Hollywood hit Break- fast at Tiffany’s. It is unclear if QIA wants to make a takeover bid. Dow Jones publication Barron’s concludes that several consumer-product giants would love to own Tiffany, but at the right price. In the year ended 31 January, Tiffany’s global net sales rose to US$3.8bn from US$3.6bn in the previous 12 months, while net earnings fell to US$416m from US$439m. Tiffany has ambitions to expand, especially in Asia, and has announced plans to open three new European retail outlets this year while revamping existing stores. Confidence in the jewellery market was also seen in London department store Fortnum & Mason. It has overhauled its jewellery department with the work of new designers, including Fernando Jorge from Brazil, Polish-born but London based Tomasz Donocik, and Melanie Georgacopoulos, the French-Greek jewellery designer.

Tory Burch, D&G among new Sycamore Partners heats up its Forbes Billionaires portfolio with Hot Topic buy

The Billionaires’ Club gained new Sycamore Partners is boosting its fashion members from the fashion industry this year, portfolio with the US$600m acquisition of Hot according to Forbes’ The World’s Billionaire Topic, the US fashion-retail chain aimed at List. They include Tory Burch and her ex- teenagers and young adults. Los Angeles- husband Chris Burch, founder/controllers of based Hot Topic itself, which will be delisted the internationally growing US$3bn Tory Burch from the NASDAQ stock exchange to go retail empire. Also new on the list are design- private, has been valued at about US$455m. ers Domenico Dolce and Stefano Gabbana Sycamore Partners’ other fashion-related (worth US$2bn each); Latin American cosmet- assets include US women’s fashion retailer ic group Yanbal International’s Fernando Talbots. It has also been bidding to take over Belmont (US$2.2bn); and Diesel jeans founder the financially struggling Billabong Internation- Renzo Rosso (US$3bn). al, the Australian surfwear manufacturer.

Bershka unveils Moving sports Samsung backs Alexander line in race against rival Mango Wang in crowdsourcing design

Bershka, the retail chain aimed at young Fashion designer Alexander Wang adults, has launched Moving, its first foray into and Samsung Electronics are collaborating to the sports-apparel business. Scheduled to hit crowdsource design ideas via the new Galaxy stores between spring and summer this year, Note II smartphone to create a limited-edition the Moving collection will be the kind of bag. Proceeds from sales of the bag, which sport-wear that can double as fashionable is expected to be ready by this summer, will casual attire. The line also includes accesso- go to London-based Art Start, a charity helping ries such as sports bags, skipping ropes and deprived youths. Samsung approached Wang water bottles. Analysts claim Bershka, part of with the initiative as Wang has expressed the Spanish group Inditex, is responding to the views that crowdsourcing will be key to how sports collection recently launched by rival fashion design will function in the future. retailer Mango. PHOTOGRAPHY/ART

Swiss photographer censorship lawsuit

The value of photography could increasingly become dependent on receiving the consent of people featured in the picture as demonstrated by a lawsuit at Switzerland’s Zurich Civil Court. Swiss photographer Christian Lutz is embroiled in a court case brought by 21 members of the Swiss reli- gious group International Christian Fellowship (ICF). The ICF followers allege photographs Lutz took of them have been published in his new book In Jesus’ Name without their permission. They admit they agreed to be photographed, but had not given their consent for the photos to be published for commercial purposes. In January, the Zurich court banned the book’s sale and the plaintiffs are going to court again to ensure the injunction is permanent. But supporters of Lutz, including the Lausanne-based Musee de l’Elysee that had planned an exhibition of the photographs, fear the dispute might have to go the Swiss Federal Supreme Court because the ICF members’ action amounts to outright censorship. The British Journal of Photography reports that more than 70 photography professionals have signed a petition to support Lutz. In Jesus’ Name is published by Zurich-based Lars Muller Publishers. *Another art-related legal dispute centres on the theft of historic rare books in Italy. The Art Newspaper reports that Marino Massimo de Caro, former director of Na- ples-based Girolamini Library, has admitted to stealing more than the 1,000 books he confessed to. Other antique books were taken from the Biblioteca dell’Osservatorio Ximeniano and other libraries.

Neglected painting in UK Art13 fair proves investor museum is £1m van Dyck find demand for new Asian talent

A painting that had been long ignored at the Children’s Dreams, a 2012 painting by Bowes Museum in County Durham, North Chinese artist Zhu Jinshi, fetched a buyer’s East England, turns out to have been the work price of US$150,000 at the inaugural Art13 of Anthony Van Dyck, the 17th-century Belgian London, the first international art fair in London portrait artist sponsored by King Charles I. It in more than 10 years. Jinshi, who came with was discovered during research for The Cul- the Hong Kong/Shanghai-based Pearl Lam ture Show on UK public-broadcast network Galleries, also received acclaim for Boat, a 12- BBC Two. The authenticity of the painting, of metre long cylindrical installation made from the lady-in-waiting to King Charles I’s wife rice paper and bamboo. In Sook Kim’s Henrietta Maria, has been verified by experts. Saturday Night, a 2007 voyeurism-themed It has been valued at about £1m. photographic work, was bought for £70,000 via France’s Galerie Paris-Beijing. Art13 London took place in March.

Old Parisian icon Pantheon to Christie’s, Sotheby’s raise shine with €100m facelift buyer’s commission

The dilapidated Pantheon, the Paris-based Multinational fine-art auction houses 18th-century church that survived the French Christie’s and Sotheby’s have hiked their Revolution and is currently a mausoleum for ‘buyer’s premium’, the commission charged to France’s historical great and the good, is to successful bidders. The commission rates are undergo a €100m facelift that is expected to increasing for the first time in five years. take 10 years. Restoration starts in August. Experts say the two companies’ rates had *Boston-based Higgins Armory Museum, ranged from 25% of the first US$50,000 to dedicated to antique weapons and armour, is 12% for US$1m-plus. Christie’s now charges to merge with nearby Worcester Art Museum 25% for the first US$75,000 to 12% for more from January 2014. The cost-cutting move has than US$1.5m. It is 25% for the first drawn criticism from Higgins supporters. US$100,000 to 12% for more than US$1.9m at Sotheby’s. COPYRIGHT

Illegal to retransmit unauthorised TV

The European Court of Justice (ECJ) has ruled that websites and other digital-media operators need broadcasters’ permission before they can retransmit TV channels online. Doing otherwise would be copyright infringement. The ruling follows a lawsuit filed by ad-funded UK TV networks Channel 5, Channel 4 and ITV against TVCatchup.com. TVCatchup.com has more than 12 million registered users who had free access to the retransmission of British free-to-air services BBC One (the public-broadcast channel), ITV and Channel 4. TVCatchup.com, however, generated revenues from the platform by selling pre-roll advertising space before programmes started. This contravened the 2001 EU copyright directive, which treated broadcasters as “authors” who had exclusive rights over the programming on their networks. Any other platform seeking to retransmit the programming requires clearance. TVCatchup.com had argued that it was not retransmitting anything; it was only giving its subscribers to tools to access channels which they were already entitled to watch via the broadcast airwaves. The ECJ’s decision was published on 7 March. By 29 March, TVCatchup.com was still offering BBC One, ITV and Channel 4 on its website.

StudioCanal bashes Universal Discovery Channel free to use Studios with movies lawsuit ‘History’ in network name

France’s StudioCanal is suing Hollywood’s A British High Court judge has ruled that Universal Studios for “tens of millions” for Discovery Communications Europe and its allegedly “violating its fiduciary and contractual channel Discovery History are not infringing obligations” in a joint venture launched in the A+E Television Networks’ registered trade- 1999. That venture produced box-office hits by mark for TV network The History Channel and UK-based Working Title Films, including the community mark for the brand “HISTORY”. Bridget Jones’s Diary, Frost/Nixon, Love The judge concluded that Discovery’s use of Actually, plus others. The charges go as far as the word “History” in its factual network’s claiming Universal Studios, part of Comcast name is purely descriptive. The judge also Corporation’s NBCUniversal division, has criticised the claimants’ lawyers for relying on deliberately withheld from StudioCanal other unsigned hearsay statements, instead of cross revenues from the 40-plus movies they -examination, to support their claim. produced together.

DKNY settles rights dispute UK groundbreaking Copyright with street photographer Hub gets £150,000 go-ahead

Fashion group DKNY’s recent settlement The UK government is offering £150,000 in with US street photographer/blogger Brandon funds to kick-start the planned Copyright Hub, Stanton is a salutary lesson on how rights the one-stop shop for centralising the licensing infringement can be amicably settled in of UK copyrighted works. It is expected to today’s social-media driven businesses. DKNY boost the creative industries’ contribution to allegedly used Brandon’s photos without his the economy by £2bn-plus a year. The con- permission for its Bangkok store window cept was proposed by the Hargreaves Report display. Brandon is said to have demanded (MTF Issue5) in 2011; the website will be US$100,000 in compensation; DKNY offered designed by the participating copyright organi- US$15,000. After Stanton expressed his ob- sations. It will be a gateway for content users jections on his Humans of New York blog, the to license rights needed for creating digital two parties agreed that DKNY will donate multi-media works. US$25,000 to charity in Stanton’s name. REPORT A Country Profile Germany Europe’s biggest economy is embroiled in finding solutions to the euro crisis that has shaken the region’s financial foundations; but a close look at its media and entertainment businesses, and Germany has the groundwork for a solid future

As Europe’s biggest economy, Germany has Creative heritage been centre stage in the news recently. Twenty-first century Germans, including the One reason that stands out is US TV star second generation Eastern Europeans, David Hasselhoff’s involvement in a campaign Asians, the Turkish, and African-Germans, to save the last remaining section of the Berlin have to live with a legacy that could never Wall from being demolished for property devel- eradicate the atrocities committed in the name opers. He had sang Looking for Freedom, a of Nazism during World War II. song that gave him a No. 1 hit in Germany Whatever art was created, bought or stolen in during the 1980s, on the Berlin Wall as it was the name of anti-Semitic policies is being being torn down in 1990. condemned or correctly being returned to their He returned recently to show his support for rightful owners today. The Louvre Museum in what was left of the Wall by singing Looking Paris recently returned private artworks stolen for Freedom. from Jewish owners, among others, to their As the European Union (EU) battles to free living descendants. itself of the current Euro crisis, Germany is all Parallel to the Third Reich’s inhumane rule over the international news. As a founding EU are Germany’s civilised legacies that go as far member and the Eurozone, the Council of back writer, artist and politician Johann Wolf- Europe, the United Nations, NATO, the G8 gang von Goethe in the 18th century and the and the G20 economic decision-makers, all Brothers Grimm folklore fairy tales from the attention is being paid to Germany’s stance on same era. Other literary forebears include the Eurozone crisis that has debilitated several Thomas Mann (famous for the novel Death in debt-ridden European nations. Venice); Hermann Hesse (Steppenwolf and Chancellor Angela Merkel, Germany’s leader, Siddharta); and Nobel Peace Prize winner cannot avoid her country folk’s feelings about Gunter Grass (The Tin Drum). Germany’s role in ending the euro crisis Their works are part of the industries that because there is a parliamentary election in have made Germany internationally influential September. Millions of Germans are unhappy in the business of film, TV, music, architecture, about Germany’s agreement to help prop up books, and art, among other creative sectors. its near-bankrupt neighbours with loans. They fear that move will bring Germany to its Media and entertainment business knees. Merkel, however, cannot afford to ne- With so many media and entertainment busi- glect the cash-strapped euro territories (most nesses still family-controlled, analysts can only recently Cyprus, Spain, Italy and Greece). If estimate the true value of the media and enter- they go down, they could take the whole tainment sectors in Germany. region down, including Germany, with them. Several major players, including the public Germany is the leader of the world’s fourth broadcasters ZDF and ARD, Bertelsmann largest economy after the US, China and (arguably Europe’s biggest media and enter- Japan and the second largest exporter. Con- tainment conglomerate), Axel Springer, Bauer sequently, Merkel has got the whole world Media Group report their annual financial re- watching her every move. They want to know sults. This is mostly because they are interna- how she will balance the demands on her as a tional operations and/or are quoted on stock consummate world politician to ensure her exchanges, a situation that calls for transpar- political party CDU (Christian Democrats), at ency. But the influence of family-owned private least, and its coalition partners the CSU businesses such as the Ganske book and (Christian Social Union) and Free Democrats magazine publishing group, and the Mack return to power. family that owns Europa-Park, Germany’s

15 REPORT biggest theme park and Europe’s second Conglomerate - Bertelsmann biggest after Disneyland Paris, cannot be The leading international media groups ignored. Accountancy group Pricewaterhouse- originating from Germany include Bertelsmann Coopers (PwC) estimates that consumer and (see MTF Issue12), Axel Springer, ProSie- business spend on media and entertainment in benSat.1 and the Bauer Media Group. Germany was more than US$99bn in 2011 Bertelsmann is Germany’s biggest media and continues to grow. group. The 178-year-old conglomerate has However, its ranking among the world’s big- been juggling the preservation of its old-media gest has dropped to fourth place after the US assets while placing a cautious foot inside the (US$464bn in 2011), Japan (US$193bn), and emerging digital-media businesses. China (US$109bn). The astonishing growth of Unable to ignore the way the media tide is China’s economy in recent years has seen it turning, it has pledged to spend the next few overtake Germany in the media-and- years investing in digital technology. Addition- entertainment industries. ally, it is increasing its investments in the However, as Europe’s second most populat- emerging super economies, especially China. ed country and biggest economy, Germany is In the nine months to 30 September 2012, robust enough to withstand industrial competi- the group reported revenues of €11.4bn, a tion from other countries. 5.8% jump from the same period in 2011. In terms of media and entertainment, Germa- Group profit soared to €528m from €377m ny is Europe’s biggest TV market and the during the same nine months. world’s third largest music market. Its media For the whole of 2012, Bertelsmann reported companies include influential enterprises, even €16bn, a 4.5% leap from 2011. Profit rose only though a significant majority of their revenues slightly to €619m from €612m. CEO Thomas still originate from traditional media channels, Rabe has told analysts and the media that including linear-broadcast TV, print media, revenues should grow to €18bn in 2014. books and CD recorded music. The conglomerate is built on four divisions. In its Outlook report covering the period from The RTL Group is Europe’s largest commer- 2011 to 2016, however, PwC concludes that cial-TV operation. Its subsidiaries include 54 digital media-technology is going to have the TV channels plus 29 radios stations in 10 Eu- biggest impact in Germany. ropean territories. RTL Group revenues for the Revenues from mobile and broadband 2012 fiscal year rose 4.4% to €5.99bn, while Internet services yielded €10bn in 2011 from profit jumped 13.2% to €690m. subscriptions and advertising. Those revenues RTL Group subsidiary FremantleMedia is a are expected to grow at an average annual prolific producer of hit TV shows. It owns the rate of 7.7% to €14.5bn in 2016. global rights to format shows like the Idol Online advertising delivered €4bn in brand (such as American Idol), The X Factor, revenues in 2011. It is surpassing newspaper- The Price is Right and Family Feud. advertising revenues to become the second Bertelsmann has announced plans to sell biggest after TV advertising. By the end of part of its stake in RTL, reducing its 92.3% 2011, the German TV market (including free-to share to 75%. It hopes to have completed the -air and pay-TV) had generated €12.7bn, sale in May. similar to the year before. The funds raised will be used for expanding Despite the decline in sales of video-games its digital-media business and embarking on consoles in 2011, PwC noted growth in the more acquisitions. In Bertelsmann’s sights is sale of portable consoles but expected the Springer Science+Business Media, which spe- next generation of fixed/stationary consoles cialises in publishing scientific journals and coming out around now to drive future sales. currently belongs to European private- Casual games, especially those played online, investment firm EQT and Singapore sovereign will equally spur future growth. Sales of print wealth fund GIC. media, in the form of newspapers, magazine Another subsidiary, the book publishing giant and books, continue to decline. But PwC Random House, is scheduled to merge with argues that digital versions, including e-books, UK-based Penguin Books later this year. The will help maintain the sector’s health as enlarged enterprise will become the world’s Germans buy more and more smartphones biggest consumer-book publisher. and tablets. The film industry, including cine- Random House imprint Vintage is behind the ma box-office tickets plus DVD rental and Fifty Shades of Grey erotica trilogy, last year’s sales, generated €2.6bn in total in 2011. Alt- publishing sensation. More than 70 million hough slow at 0.6%, the annual growth rate units of the Fifty Shades books have been sold until 2013 will be influenced by the installation worldwide. The title helped lift Random of digital and 3D projectors in movie theatres. House’s 2012 revenues by 22.5% to €2.1bn. 16 REPORT Bertelsmann’s Gruner+Jahr is arguably The smaller kabel eins is distributed to Europe’s most successful magazine publisher. German-speaking GAS countries and Eastern The subsidiary Arvato provides technology Europe. The cable-and-satellite delivered services to third-party media clients. Sat.1was officially Germany’s first commercial Bertelsmann’s fortunes in the global music TV service. There is also a German-language industry have been mixed. Its past interests content production subsidiary called ProSie- include the joint venture with Sony Corporation benSat.1 Produktion, plus a marketing arm to form Sony BMG Music Entertainment, called SevenOne Media. which was active between 2004 and 2008. Round-the-clock news network N24, the Shortly after Bertelsmann sold its share in women-targeted Sixx and Maxdome, its online Sony BMG to Sony Corporation, it formed video-on-demand platform are part of ProSie- Berlin-based BMG Rights Management to benSat.1. Although Maxdome was launched in acquire, manage, license and administer art- 2006, its complacency means international ists’ music rights, as opposed to being a label newcomers in video-streaming entertainment that sells recorded music. (such as Netflix, Hulu and Amazom.com) A year later, US private-equity group KKR could become a threat. became a shareholder and eventually ended ProSiebenSat.1’s international content- up with 51% of BMG. production and distribution arm, the thriving In March this year, KKR agreed to sell its Red Arrow Entertainment Group, owns or interests back to Bertelsmann, for a reported works with 18 TV-production companies inter- €300m-plus. Bertelsmann predicts annual rev- nationally, including the US, the UK and enues of €650m for BMG by 2018. As the sole several European countries. In addition, owner, Bertelsmann’s plans for the company ProSiebenSat.1 owns a pan-European video- are still unclear. But BMG is now the world’s games-publishing company. fourth largest music publisher with more than Permira and KKR recently raised €485m 1 million song titles in its catalogue. from offloading shares in ProSiebenSat.1, The music rights include the works of interna- which industry observers see as a hint of their tional hit acts like Bruno Mars and Duran desire to exit the German-TV partnership. Via Duran. Also in the portfolio are the music Lavena Holding 1, they have already sold rights and the master-recording rights to other ProSiebenSat.1’s TV and radio interests in the established artists like Bryan Ferry and Nordic markets to US-based Discovery German singer/actress Nena. Communications for US$1.7bn. The overall assets, which equally include The Nordic business was part of Lavena high-profile music-publishing houses (such as Holding 1’s European subsidiary SBS Broad- Virgin Music, Bug Music and the Chrysalis casting. International media analysts are now Music Group), do provide the foundation for waiting to see which companies will bid for the setting up a recording label should BMG be remaining Permira/KKR stake. interested in going that route again. Conglomerate – Axel Springer Conglomerate – ProSiebenSat.1 In terms of print media, Germany’s market ProSiebenSat.1 Media, RTL Group’s biggest leader must be Axel Springer. It is one of Eu- competitor in the TV sector, is listed on the rope’s biggest newspaper-focused companies. Frankfurt Stock Exchange. It is currently The Frankfurt Stock Exchange-quoted multi- majority controlled by US private-equity national group, which operates in 40 territo- company KKR (which recently exited Bertels- ries, including Russia, Eastern Europe, France mann’s BMG subsidiary) and European and Spain, recently received some good private-investment group Permira. news. Permira and KKR’s jointly owned company Its bid to take over ProSiebenSat.1 in 2006 Lavena Holding 1 acquired their 88% in voting had been rejected by the national media anti- shares in 2006 from US entrepreneur Haim trust commission and by Bavaria’s regional Saban for a reported US$4.2bn. Dutch media commercial broadcasting authority. They operation Telegraaf Media Group owns the based their ruling on the grounds that Axel remaining 12%. Its current portfolio includes Springer’s control of two major media opera- 29 free-to-air broadcast networks and pay-TV tions would have given it an unfair dominant channels reaching more than 62 million position. However, in February last year, the households in 10 European markets. Bavarian Higher Administrative Court ruled ProSiebenSat.1 channels include ProSieben, that the broadcasting authority’s ruling was a commercial network distributed via digital illegal and overturned the 2006 decision. cable, satellite and terrestrial signals to Ger- Despite its focus on newspapers and many, Austria and Switzerland (GAS). magazines, at a time when the cont…page 19 17 REPORT GERMANY — FACTS & FIGURES

POPULATION: 81.8 million GDP PER CAPITA: US$41,600

INTERNET USERS (2012): 67.5 million FIXED BROADBAND USERS (2012): 27.7 million WIRELESS BROADBAND (2012) 31.7 million TV HOMES 38 million SATELLITE TV HOMES (2012) 18.07 million MOBILE PHONE SUBSCRIBERS (2011): 114 million SMARTPHONE SUBSCRIBERS (2012): 29 million

FACEBOOK USERS (2012): 38.6 million TWITTER USERS (2012): 6 million

VALUE OF MUSIC INDUSTRY (2012): €1.67bn

VALUE OF ADVERTISING SPEND (2012) US$25.6bn

CURRENCY EXCHANGE RATE: €100 = £84.30; US$128.16; CNY803.14

ORGANISATIONS TO KNOW:- Representative for Cultural and Media Affairs (BKM) Federal Trade Association for Interactive Entertainment Software (BIU) German Association of Private Broadcasters (VPRT) Association of German Cable Operators (ANGA) German Federal Film Board (FFA) German Films (overseas trade body) German Magazine Publishers Association (VDZ) Federation of German Newspaper Publishers (BDZV) German Fashion Institute (Deutsches Mode-Institut) Modeverband Deutschland Association of German Industrial Designers (VDID) Federal Association of Music Industry (BVMI) German Music Publishers’ Association (DMV) Association of Independent Labels (VUT) GEMA (authors and composers’ royalties collecting association) GVL (performing rights society) German Publishers and Booksellers Association (BDB) German Association of Communications Agencies (GWA) Federal Association for Information Technology, Telecommunications and New Media (BITKOM) Federal Association for the Promoters and Event Business (BDV) German Football Association (DFB) German Anti-Piracy Group (GVU) Federal Cartel Office Germany Trade & Invest Association of the German Trade Fair Industry (AUMA) Federal Ministry of Economics and Technology Goethe Institut

Source: The Economist; Internet World Stats; BuddeComm; ZenithOptimedia; Socialbakers.com; Point Topic; CIA World Factbook; BITKOM; comScore MMX; SES; OECD; SES S.A. 18 REPORT print-media format is being hammered by de- The company, which is run by its fifth- velopments in digital technology, Axel Spring- generation family CEO Yvonne Bauer, has not er operates a relatively healthy business. given up on its print-media business as Revenues in 2012 rose 3.9% to €3.3bn. demonstrated by its growth via acquisition in Earnings before interest and tax jumped near- recent years. ly 6% to €628m, consolidated net income fell The company says its media portfolio 4.7% to €276m. The group secured a revolv- includes more than 570 magazine and news- ing-credit loan of €900m late last year to con- papers titles, more than 300 digital brands, tinue with its ambitions to grow its digital- and about 50 radio and TV services across 15 media business. countries. It has launched 90 new print titles Like its counterparts elsewhere, however, since 2011. Its English-language international Axel Springer’s print-media business is not magazine brands, including Closer, Bella, having an easy time but remains influential. Take A Break, Heat and Grazia, plus domestic Its newspaper portfolio is led by the flagship titles like Neue Post, Das Neue Blatt and auf six-days-a-week tabloid Bild, arguably Eu- einen Blick are populist in tone and popular as rope’s biggest-circulation newspaper with consumer brands. more than 3.5 million sold a day. In its expansion strategy, Bauer bought ACP The Bild brand is so strong in Germany, its Magazines, a market leader with more than website successfully snatched the exclusive 120 titles in Australia, New Zealand (MTF Is- rights to transmit the highlights of soccer sue12) and some Asian markets, for A$500m. games and competitions played by clubs in ACP, Bauer’s biggest investment in five the Bundesliga, Germany’s premier football years and bought from Australia’s struggling league. Another well-known but loss-making Nine Entertainment Company, is being newspaper is the highbrow broadsheet Die rebranded as Bauer Media. Welt. The online edition of Die Welt was Bauer first tasted international success when converted from a free product into a paid-for it bought UK-based EMAP Consumer Media one recently. and EMAP Radio for £1.14bn in 2008. Within its magazine stable are the Bild der Bauer’s radio and TV brands are mostly in Frau women’s magazines, the German ver- the UK. The most famous of its 42 UK digital sion of Rolling Stone music magazine, TV and broadcast radio stations is the commercial guides, plus publications for car enthusiasts. London channel Magic 105.4FM. Meanwhile its digital-media division is It formed a joint venture called Box Televi- thriving. Revenues rose 53.2% to €243m sion with Channel Four, the UK ad-funded (second only to the €256m earned from its public broadcaster, to operate a series of traditional newspaper business). digital-terrestrial TV stations. Their digital The company says its international revenues infrastructure makes them ideal multi-platform plus digital income combined account for more TV networks. than one third of the total business. They include Kerrang!, Kiss 100, and Heat Other business interests take in a 49% stake TV, which was launched last summer. Q TV, in hy! Berlin, a start-ups’ networking confer- an extension of Bauer’s UK-based music title ence; online classified advertising Q magazine, was shut down last year. meinestadt.de, a majority stake in Belgian real In Germany, it took over Münchner Medien -estate web portal Immoweb.be; a minority Verlagsgesellschaft (MVG) and its magazine share of accommodation lettings social-media titles that include Joy and Shape, Cosmopoli- platform Airbnb; performance-based interna- tan, plus its Swiss business German Premium tional digital-marketing group Zanox; plus the Magazines. online editions of its print titles. It deepened its presence in Eastern Europe in March this year with the acquisition of Radio Conglomerate –Bauer Media Group Expres, a Slovakian radio station with a 20% The international group has its legacy as one local market share, from US-based Emmis of Europe’s largest consumer-magazine Communications. publishers but has increasingly diversified its As part of its digital-media ambitions, Bauer investments into digital broadcast radio sta- has announced plans to produce a digital tions and TV channels. The brands cover the entertainment-and-lifestyle hub featuring origi- subjects of celebrity and entertainment. Bauer nal content (not extensions of its print brands). recently entered the gossip grapevine itself Bauer is reportedly still looking into acquiring when it emerged that Hollywood star Tom more radio and magazine brands, especially Cruise is suing Bauer’s Life & Style magazine those that will extend to digital channels and because of allegations made about the actor’s bought at the right price. International is role as father to his daughter Suri. predicted to represent 62% of its business 19 REPORT when the 2012 financial results are an- Germany’s largest satellite-delivered TV nounced. platform, to 54.5%. Sky, which has more than 3.4 million sub- More media groups scribers, reported annual revenues of €1.33bn Another major player in Germany’s media are- in 2012, a 17% increase from 2011. Although na is Hubert Burda Media, which is most still loss-making, the net losses were slashed famous for its FOCUS weekly news magazine, by about 30% to €195.2m. celebrity gossip title Bunte and women’s And last September, Disney agreed to buy magazine Burda Style. It generates revenues Das Vierte, a terrestrial broadcast network, of about €2bn a year from several consumer from Russian media investor Dmitri Lesnev- magazine titles, websites and its printing busi- sky. It will be added to Disney’s other German ness. Burda International publishes more than media assets, which include stakes in free-to- 230 titles in mostly Central Europe and Asia. air channels RTL II and the kids’ service Super Westdeutsche Allgemeine Zeitung (WAZ), RTL. Disney’s international pay-TV networks, the biggest-circulation newspaper in like Disney Junior and Disney Channel, have Germany’s massive Ruhr urban area, is pub- localised versions on German TV screens. lished by the Essen-based family-owned WAZ Media Group. WAZ Media is considered Ger- Film many’s third largest dedicated print-media Thanks to Germany, we have the expression- company. Its 500 titles are published in mostly ist-influenced movies from the 1920s and German-speaking Europe and Eastern 1930s, including Fritz Lang’s Metropolis European markets. (1927), arguably the first ever sci-fi movie, and Headquartered in Ismaning in Bavaria, the the crime thriller M (1931); the horror film The Constantin Medien company is a thriving TV, Cabinet of Dr Caligari (1920) by Robert film, marketing, digital-media and entertain- Wiene; and the then risqué Pandora’s Box ment company centred on sports rights. (1929) by Georg Wilhelm Pabst, which made Additionally, it co-produces and distributes lead US actress Louise Brooks famous then feature films. Its international releases include and an icon today. international box-office and DVD hits: Perfume These were the moving pictures that influ- – The Story of a Murder; the Baader-Meinhof enced British master of suspense Alfred Complex; Resident: Evil; and The Three Hitchcock when he started out in the business Musketeers. Constantin’s Swiss subsidiary at Germany’s Babelsberg Studios and UFA Highlight Communications is the umbrella Studios in the 1920s. They have influenced company that includes the film business and several more movie-industry creatives then TEAM Holding, the exclusive commercial part- and since. ner of the Europe-wide UEFA Champions The business hit a seriously sour note with League soccer competition. Nazi-backed anti-Semitic feature films like Veit UnityMedia KabelBW, Germany’s second Harlan’s Jud Suss (1940) and Leni Riefen- biggest cable-communications operator is a stahl’s Triumph of the Will (1934).This was subsidiary of Liberty Global, the international followed by years of slump as the movie arm of US media and communications industry talent emigrated to work abroad. conglomerate Liberty Media (MTF Issue13). Then came the Neue Deutsche Welle (New Kabel Deutschland, the country’s largest German Wave) generation. Their output cable network with 8 million customers, is dominated the period from the 1960s to the listed on the Frankfurt Stock Exchange with a 1980s with acclaimed productions by Wim market capitalisation value of about €9bn. Wenders (today, president of Berlin-based Private-equity firm Providence Equity, which European Film Academy), Rainer Fassbinder used to command, an 88% stake in the net- and Werner Herzog, among others. work, exited in 2011. From that time, the German film industry has This year, Kabel Deutschland has been proven it can deliver international commercial approached by the local businesses of UK- successes. They include Das Boot in 1981 by based international wireless carrier Vodafone, Wolfgang Petersen (now a Hollywood stalwart Spain’s Telefonica Deutschland and the Ger- as well), Run Lola Run (1988) directed by Tom man division of Dutch group Royal KPN about Tykwer, Downfall (2004) by Oliver Hirschbie- a possible merger. gel, The Lives of Others (2006) by Florian Among the international media groups with Henckel von Donnersmarck, and The White extensive interests in Germany are Liberty Ribbon (2010) by Michael Haneke. Global, the Walt Disney Company and News Hollywood movies by Roland Emmereich, Corporation. The last one recently boosted its famous for his disaster thrillers like Independ- stake in the publicly quoted Sky Deutschland, ence Day and The Day after Tomorrow, 20 REPORT have grossed more than US$3bn in total €50,000 to cover the costs of marketing and revenues. Berlin remains Germany’s film sales abroad. capital, although efforts are made to broaden Also, qualifying films have to be “barrier- the industry by making Cologne and Dussel- free”. This means everything must be done to dorf attractive locations for shooting movies. ensure all members of Germany’s society, Potsdam-based Studio Babelsberg, just out- including those with impaired eyesight and side Berlin’s city centre, is one of the world’s hearing difficulties, can enjoy the final work. largest movie studios. Of Germany’s largest The production company is, therefore, obliged post-war film-production studios, including to include sub-titles and audio descriptions to Universum Film AG (UFA) in Berlin and DEFA the movie. in the former East Berlin, Babelsberg is the For some of the federal grants, producers sole survivor. can also apply to regional funds such as According to the website Cineuropa.org, Dusseldorf-based Filmstiftung NRW, cinema box-office receipts in 2012 could reach FilmFernsehFonds in Munich, nordmedia a very healthy €1bn when the calculations are Fonds in Hannover, Medienboard Berlin- finalised. Referring to data supplied by audi- Brandenberg in Berlin and Leipzig-based ence-measurement specialist Rentrak EDI, MDM Mitteldeutsche Medianforderung. German cinema fans paid €984.9m for 127 million cinema tickets to 618 movies from 29 Music December 2011 to 30 December 2012. In pop-music history, Germany is renowned Foreign films continue to dominate the for contributing to the early careers of The cinema-viewing market share. The highest Beatles, who played extensively in Berlin grossing movies in 2012 were led by The during the 1960s. Rock music’s current come- Untouchables, a French comedy co-directed back king David Bowie spent the mid to late by Eric Toledano and Olivier Nakache, 1970s in Berlin being influenced by the mini- followed by the latest James Bond action thrill- th malist sounds of German acts like Kraftwerk. er Skyfall and 20 Century Fox’ 3D animation And David Hasselhoff’s idiosyncratic popular- Ice Age 4: Continental Drift. ity in the country aside, Germany is a vital German-made movies accounted for only market for the international music industry. 17% of total releases last year, local experts It became the world’s third largest music say, a decline from the 20% to 25% reached in market, after the US and Japan, for the first previous years. time in 2010. With its total recorded-music The German government supports the local sales of US$1.41bn that year, Germany industry financially as subsidies can attract overtook the UK, which had ranked third for foreign productions. For example, Smoke several years. House Productions, which is jointly owned by According to industry trade organisation Hollywood star George Clooney and actor/ BVMI, total sales reached €1.5bn in 2011and producer Grant Heslov, has been shooting rose just over 3% to €1.67bn last year, when scenes for The Monuments Men at Studio th digital and physical (CD and vinyl) recordings Babelsberg. The movie, financed by 20 plus performing rights are added. Century Fox and Columbia Pictures, is about Revenues from digital sales alone rose the retrieval of artworks stolen by the Nazis in 20.5% to €294m. And streamed music, World War II. currently the fastest growing format in terms of The Berlin International Film Festival, now in rd music sales, accounted for 5% of the total its 63 year, contributes a great deal to raising revenues. As in most developed markets, the local industry’s profile globally. Germany’s music business is suffering from To encourage more of the same from over- the rapid growth of digital music revenues seas producers and boost local productions, (downloads and streaming) not compensating the local film sector is supported by the federal enough for the decline in physical sales. government’s German Federal Film Board, PwC predicts that digital music, in the form of German Film Fund (DFFF) and the Film downloads, streaming, advertising-funded Support Act legislation. online services plus the licensing of repertoire The DFFF, supervised by the commission of to digital platforms, will be the key drivers to cultural and media affairs (BKM), gave future growth. German film productions €329m in subsidies No German act was in the Top 10 best- for more than 520 film productions between selling albums or singles in 2012 as compiled 2007 and 2012. The scheme was recently ex- for the industry’s international trade body IFPI. tended for another three years until 2015. Germany, however, is among the countries Productions that qualify have to give German where local repertoire represented most of the Films, the overseas trade organisation, up to top-selling albums. In 2012, domestic music 21 REPORT accounted for about 70% of total music sales. e-book development. But, in a study published Among the local hit makers are rock group by the Börsenverein and GfK Panel Services Tokio Hotel, pop duo Ich + Ich and heavy- last year, e-book sales represented 6.2% of metal band Rammstein, who are signed to total revenues in 2011, from 5.4% in 2010. Universal Music Group labels. They predict it will account for 17% of the total Veteran Peter Maffay, rap act die Fantas- in 2015. tischen Vier, and singer-songwriter Tim Ben- dzko are signed to Sony Music Entertainment Advertising Germany. And at Warner Music Germany, you BMW Films is going down in history as one of will find German rock veteran Udo Lindenberg, the first branded-entertainment investors to be reggae act SEEED, and jazz singer Schmidt. successful on an international scale. Funded The leading independent music companies by the auto manufacturing giant, BMW Films include Hamburg-based Edel, Audiolith co-produced an eight-part online series of Records, Berlin’s Four Music, Sinnbus, short films called The Hire, starring British film Hyperium Records in Nurnberg, and Cologne- star Clive Owen as the enigmatic Driver. based Westpark Music. BMW was able to persuade top-flight movie In response to the nation’s recent rapid adop- directors, including Oscar-winner Ang Lee, the tion of Internet-connected digital devices such late Tony Scott, Guy Ritchie and the late John as smartphones and tablets, the number of Frankenheimer (Birdman of Alcatraz; The legal online-music services and stores is grow- Manchurian Candidate; Ronin), to helm an ing. The most popular are Music Unlimited episode each. MUZU.TV, Musicload, Vodafone, Nokia Music, Despite claims that its popularity with Internet Samsung Music Hub, Xbox Music, Spotify, fans drove car sales, BMW Films’ does not rara.com, Rdio and Weltbild. seem to have repeated that success in Success in Germany itself is recognised with branded content. nd the ECHO Awards, which celebrated its 22 The country is Europe’s largest advertising anniversary in March. The German acts that market and the world’s fourth biggest (after the walked away with gongs include hard rockers US, Japan and China). It is said to be the Die Toten Hosen, hip-hop act Cro, a cappella world’s seventh fastest growing market in group Wise Guys and pop artist Unheilig. terms of advertising spend (source: ZenithOptimedia). Books Ad spend is forecast to grow by US$1.9bn After the English-speaking world and works between 2012 and 2015. Ad spend in 2012 published in Chinese Mandarin and Canton- reached US$25.6bn. ZenithOptimedia still ese, Germany is the third largest book- ranks Germany in fourth place in 2015, when publishing market in terms of quantity sold. ad spend would have grown to US$27.5bn. The country’s book-publishing sector Some of the world’s biggest multinational generates more than €5.5bn annually. conglomerates are among Germany’s biggest In addition to Random House, which is soon advertisers. Local market leader is Procter & to merge with the UK’s Penguin Group (see Gamble, which spent €537m in 2012, accord- above), Germany’s other major book- ing to data from research group Nielsen. It publishing operators include the Holtzbrinck was followed by Italian confectioner Ferrero Publishing Group. Internationally, Holtzbrinck (€409m); domestic retail group Mediamarkt- owns the UK’s prestigious Macmillan Group. Saturn (€372m) and French cosmetics giant Macmillan subsidiary Nature Publishing Group L’Oreal (€349m). Other advertisers are owns such academic journals as the respect- German media group Axel Springer, P&G rival ed Nature and Scientific American. Unilever, auto maker Volkswagen, supermar- Bonnier Media Deutschland is the German ket group Lidl and Deutsche Telekom. division of Swedish media group Bonnier. The world’s multinational advertising groups Among the most competitive smaller (WPP Group; Omnicom Group; Groupe Publi- independent but influential book-publishing cis and IPG) have interests in Germany. WPP houses are legal-books specialist CH Beck, subsidiary Ogilvy, Omnicom’s BBDO and DDB which is part of Carl Hanser Verlag. are among the hottest international agencies Companies specialising in education books in Germany. They have fierce competition are led by Klett Group and the Franz from such local creative agencies as Jung von Cornelsen Education Group. Matt Group, Heimat, Scholz & Friends, Kolle Rebbe and Thjnk! The e-book hope In the last couple of years, WPP has been Germany has not been at the forefront in growing via acquisitions. It acquired subsidiar- ies: local diversified agency group like 22 REPORT Hamburg-based Commarco (includes Scholz games online compared to the 65% who say & Friends), retail-marketing specialist Frey G2. they go to shops to purchase consoles. In Publicis has agreed to buy the whole of terms of units, the number of games sold to Pixelpark, Germany’s largest digital agency smartphone owners is growing while sales for and one of the first digital experts to launch in mobile console are dropping. the country. Developers and vendors predict a greater portion of consumers’ disposable income will Games be directed to games as the Eurozone starts Last year, the media reported that Hamburg- to recover from its almost decade-long crisis. based games developer/publishers DTP Entertainment had filed for bankruptcy, Live entertainment although its website appears to be still doing The annual Oktoberfest in Munich has business. Despite being famous for its Game German and foreign revellers indulging in beer of Thrones console games and other adven- drinking and other entertainment during the ture-themed titles, DTP had fallen victim to the autumn. It is a local institution and a global aggressively competitive German market. brand that attracts more than 6 million visitors News of extensive job cuts at Bigpoint Games, a year. It is one of several live-entertainment the pioneering online and social games events held in the country. developer, also followed. Germany’s major recorded-music business is In Germany, the massively multiplayer online complemented by a healthy live-music sector (MMO) games sector is the fastest growing that ensures the country is always included in compared to mobile and console. According to most major artists’ international tours. US-based SuperData Research, the free (ad- The most recent figures from the BDV (the funded) and paid-for MMO games together Federal Association for the Promoters and generated US$525m in 2010, growing to Events Business) indicate live entertainment US$700 last year. SuperData forecasts growth generated €3.94bn in 2011. More than two- will reach US$825m by 2015. thirds came from live music; the remainder The market value is tiny compared to the represents revenues from stage theatre, the global MMO industry, which was valued at circus and theme-park events, among others. US$12bn last year. But SuperData noted that Most of Germany’s biggest concert promot- the average German MMO player was pre- ers and talent agencies are BDV members. pared to pay just under one-third more per Examples are ASS Concert + Promotion in month than a US counterpart. Hamburg; Promotion-Beratung in Munich; Un- The industry, including console, online, mo- dercover Entertainment in Schwulper; Munich- bile and casual, is the largest in Europe and is based ML Musikmarketing, and Sudpolmusic; confident of future growth. Despite recent in- ARGO Konzerte; CTS Eventim in Bremen; dustry setbacks, developers including Big- Berlin’s DEAG Concerts; and Marek Lieber- point, ProSiebenSat.1 Games (part of the berg Konzertagentur. commercial-TV group), MMO specialist Game- Germany’s Europa-Park is Europe’s second forge, women-targeted developer Intenium, biggest theme park after Disneyland Paris. It is and social-games creator Wooga continue to based in Rust, south-west Germany. It do business. belongs to the family-owned Mack Rides, When international developers think of ex- which originally launched the park in 1975 to panding, Germany tends to be their gateway demonstrate the rollercoasters and other into Europe. At its acme, the now struggling amusement rides that it manufactured. US-originated Zynga chose Germany as its The park is now an autonomous entertain- first market for international expansion. ment hub that had more than 4.5 million The continuing international popularity of visitors last year. Like most major European German video-games trade shows like GDC theme parks, Europa-Park is converting its Europe and Gamescon confirms a robust business into a resort with four-star hotels and infrastructure. In the most recent figures from high-standard restaurants designed to GTIA (Germany Trade & Invest), the gaming generate more income by encouraging sector earned €1.99bn in 2011, a 3.5% growth families to stay for multiple days. from the previous year. The number of gamers in Germany grew to 25 million from 23 million. Telecoms//social media Revenues from in-game retail for virtual goods Trade organisation German Trade and Invest soared to €233m from €137m. predicts there will be more than 30 million Globally, the country is renowned for its units of smartphones in the country by the end online browser-game developers. More than of 2013. This represents a significant boost 88% of German gamers say they acquire their 23 REPORT for the domestic mobile-telecoms sector, protection agency announced that Facebook’s which suffered a severe slump in sales policy violated Germans’ freedom of expres- during 2011. sion. The ULD insisted that if users want to Telekom (formerly T-Mobile Deutschland) is register with fake names, they should be able the leading mobile-telecoms group. A subsidi- to. ary of Deutsche Telekom, it has 36 million Facebook successfully argued that since its subscribers. Internationally, Telekom uses the European headquarters is in Ireland, it com- T-Mobile brand, which has a combined 150 plies with the Irish privacy law, which in turn million-plus customers in several European complies with the EU directive that also ap- countries plus the US. It is followed by plies to Germany. The ULD is going to appeal. Vodafone’s 35 million and E-Plus, a subsidiary of the Netherlands’ KPN with 24 million Copyright subscribers. O2, part of Spanish international Germany’s copyright law incorporates related network Telefonica, serves more than 19 EU copyright directives, which follow the million users. principles of various international treaties, The networks offer triple or quadruple-play including the Treaty of Rome and WIPO services comprising mobile and/or fixed-line Copyright Treaty. telephone, TV and broadband Internet. As in most countries implementing the direc- Germany had more than 46 million fixed-line tives and/or treaties, the emergence of digital Internet subscribers by the end of 2012, based media has disrupted the traditional media and on comScore Data Mine figures. entertainment businesses that the original Germany has more than 39 million social- legislations were designed to protect. media users. The international social-media Digital piracy is a problem. According to stud- networks’ market leader is Facebook; Twitter’s ies by Berlin-based House of Research for star is also rising followed by Google Plus and Medienboard Berlin-Brandenburg fund, the LinkedIn. The local social media include German film and music industries lost €720m StudiVZ, SchulerVZ and MeinVZ sites, Xing to piracy in 2011. (the local LinkedIn) and Wer-Kennt-Wen.de. Yet, regulators are fighting back with some degree of success. Last summer, a digital Social media and free speech pirate called Dirk B was sentenced to more In terms of market penetration, social media than four years in prison for copyright infringe- has had a slow start. But the growing populari- ment via Kino.to, a peer-to-peer file-sharing ty of Facebook and Twitter appears to be website that illegally earning more than having an influence on local culture. US$8m on the back of other people’s film and That impact came to a head when October. TV copyrighted works. Twitter became the subject of German media The country’s contrary Pirate Party, a political law when the company agreed to block users party with policies that effectively counter the from seeing the account of Besseres Hanno- concept of copyright protection, has success- ver, a neo-Nazi organisation banned in fully won seats in four state parliaments. It is Germany. It was the first time Twitter had part of an international movement that started made use of its censorship policy in the with Sweden’s Pirate Party. country. Its actions were in response to a In Germany, that development has seen local request from the Lower Saxony state rights organisations clash bitterly with online- government. Twitter’s compliance triggered a entertainment and media ventures, including debate about the role of social media and search-engine behemoth Google and its video whether it included imposing restrictions on -sharing subsidiary YouTube. freedom of speech, no matter how despicable. GEMA, the national royalties-collecting socie- While supporters argue that Twitter was ty, has been trying to license the use of its complying with local law, detractors wondered members’ works on YouTube, especially as what happens when a similar request is made the general public is constantly uploading vid- in a territory ruled by despots. eos featuring unauthorised copyrighted music. Social media then became the centre of GEMA, which represents 65,000 composers debate in February when the Administrative and music publishers, is demanding a royalty Court of the Schleswig-Holstein state ruled every time a video is viewed. YouTube that Facebook’s policy of insisting that users insists the fairest form of remuneration is a register with their real names, instead of share of the advertising revenues. The talks pseudonyms, is legal. have reached an impasse and, consequently, That ruling followed another one in Decem- Germans cannot see videos featuring music ber when the local Unabhangiges and soundtracks by GEMA’s composers and Landeszentrum fur Datenschutz (ULD) data- publishers on YouTube. 24 REPORT The Bundestag, Germany’s parliament, has space around the content accessed via its been debating proposed amendments to the search engine, stands to lose a great deal if national copyright law. The proposals include the law is passed. provisions that aim to give print (books and In March, a compromise was reached and publications) publishers and their authors the the Bundestag voted for an amendment to the exclusive right to the commercial exploitation national copyright by including ancillary rights. of their works. These enable search engines and content This means search engines like Google and aggregators to display excerpts of publishers’ online news-aggregating services would need original content for free, but give the publish- the rights owners’ permission before they can ers exclusive rights to license the whole display even excerpts from the original. content. For the amendment to be incorpo- The exclusive right stands if the website rated into law, it has to be approved by the displays the content, wholly or in part, within Bundesrat, the Upper House that comprises one year from original publication. the 16 states’ federal council. News aggregators and search engines un- With the national election in September, it surprisingly oppose the legislative proposals. remains unclear when the new legislation will Google, which sells millions of dollars of ad be passed. MTF

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25 MIPCube FEATURE Felix Baumgartner & Red Bull Media House

The MediaTainment Finance Q&A

The Red Bull-sponsored skyjumper extraordinaire became the first human to break the sound barrier in free fall from the edge of space. Just goes to show the kind of Big Bang you get from Earth when media, brand and technology collaborate

On 14 October 2012, Austrian anywhere to know about Red Bull celebrity skyjumper and BASE jumper Stratos and see Baumgartner’s accom- Felix Baumgartner made history by plishment. It was the most watched live becoming the only human being to stream in history. More than 195 million break the speed of sound in free fall; people watched the event on TV, online in other words, he did so without an and via video-on-demand services. It aeroplane or any other kind of ranked among the 10 most-viewed vide- mechanical assistance. That daredevil os on YouTube. feat in our digital age also reflected the astonishing heights humans can reach, literally and metaphorically in this case, when media, brands, culture and technology join forces. Outfitted in a specially designed space- suit, which featured the Red Bull logo for the entire world to see, Baumgartner was at the centre of the ultimate brand- sponsored event. He leaped from a space capsule float- ing at the edge of space 24 miles above Earth. And, at the supersonic speed of 843.6 miles per hour, he spiralled down at up to 60 revolutions per minute. He landed safely with a parachute in Ro- swell, New Mexico. An impressed NASA, the US space agency that has done everything there is Some 77 broadcasters and 206 web to do in space flight, turned to Twitter to partners took the live-jump feed, and congratulate him. the story was plastered on more than Coordinating this extraordinary story, 1,000 front-cover pages in print media called Red Bull Stratos – Mission to the worldwide, and featured on more than Edge of Space, was Red Bull Media 1,000 radio reports. House (RBMH). RBMH also raised the bar for media- It is an autonomous division at Austria- recording equipment to new levels with based Red Bull, maker of the energy its “flying production studio” inside the drink that sold more than 5 billion cans space capsule. This studio-in-space last year and is favoured by athletes and transmitted back to Earth’s media out- night clubbers alike. lets every second of Baumgartner’s his- RBMH’s production and communications torical free fall. He also had five POV team made it its mission for everyone, (points of view) cameras cont...Page 30

26

Red Bull literally gave Felix Baumgartner wings to the edge of space He completed the mammoth Stratos mission and broke the sound barrier like no man has done before And Red Bull Media House made sure we all saw it

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The Triumphant Touchdown - Red Bull Stratos Mission Accomplished

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Red Bull Media House’s Alexander Koppel… and some of the head-spinning entertainment content his company distributes

29 MIPCube FEATURE attached to him so that we could see the maverick but captivating activities that fall from his point of view. Baumgartner, are supported and produced by Red Bull who was named the 2012 Laureus World the brand. For example, instead of only Action Sportsperson of the Year, had sponsoring the extreme-sports events, become a media superstar. Red Bull organises them (motor sports Yet, at a time when various enterpris- including the Red Bull Formula 1Grand es, including those operated by business Prix team; motorcycle races; free- moguls Richard Branson and Elon Musk, skiing; snowboarding; mountain-biking; plan to commercialise space tourism, cliff diving; wakeboarding; car rallies; Baumgartner feels the Red Bull Stratos surfing). More recently, the Red Bull mission has much more to offer. Amplifier was launched to back young He hopes the data gathered, lessons music start-up companies. learned from this accomplishment and On 9 April, Baumgartner and Alex the scientific discoveries about the Koppel, RBMH’s chief commercial officer, human body in space will be instructive are scheduled to be making an exclusive to the aeronautical sectors. joint keynote appearance at MIPTV/ RBMH would not confirm it, but media MIPCube, the international event for analysts concluded that the ground- multi-screen content creators, creativity breaking jump from outer space, argua- and future innovation, in Cannes. The bly the ultimate media stunt, would two will explain how Baumgartner, have propelled the value of the Red Bull RBMH and Red Bull contributed to aero- brand to more than £5bn (US$7.5bn). space history. The Red Bull Stratos mission and the accompanying media campaign, however, are the latest of several In an MTF Q&A, Baumgartner achievements for RBMH. It officially explains his relationship with Red launched in 2007 as Red Bull’s commu- Bull, why he and the brand owner nications division. Its activities included make a great team, and the implica- generating publicity for the extreme- tions of the media coverage behind sport athletes (including Baumgartner), his historic free fall, while Koppel extreme-sport events and the Formula 1 points out why RBMH’s global Grand Prix champions that Red Bull the achievements in the multi-platform, brand has been sponsoring for decades multi-screen media era are only just (see MTF Issue1). the beginning of its ambitions. Today, RBMH is an international content-production and distribution Skyjumper superstar Felix operation. Its business includes the Baumgartner Servus cable-and-satellite TV networks MTF: How long have you wanted to in German-speaking Europe (Austria, achieve such a skydive from space, Germany and Switzerland; the Red Bull and what was different this time TV platform that licenses and sells compared to previous attempts? sports, culture and lifestyle content to broadcasters, websites and mobile-app Baumgartner: I’ve wanted to do this developers; the Red Bull TV Online for as long as I can remember. Ever channel; print magazines; the Red Bull since I was little, astronauts like Neil recording studios; the Red Bull Music Armstrong were heroes to me. I took my Academy festival, workshop and online first skydive as soon as I reached the radio; and the Red Bull Records music legal age – 16 in Austria – and had no label and artists. doubt that the sport was for me. Joe Kit- The growing RBMH operation also tinger is a legend in the skydiving world, includes a music-publishing unit, and a where everybody knows about the feature-film production company. It benchmarks he set with his jump from supports a network of content contribu- 31,333 meters more than 50 years ago. tors in more than 160 countries and I had it in the back of my mind that I’d opened a US unit in Los Angeles in like to attempt a jump like his someday, 2011. For content ideas and inspiration, but I wanted to build up experience first. it is constantly keeping an eye on the 30 MIPCube FEATURE I didn’t want to go from zero to hero. As Baumgartner: My closest family and to what was different with our Red Bull friends, including my mother, father, Stratos jump, as opposed to previous brother and girlfriend, were watching attempts, I’d say it was a combination of not only live but in person. They came things. We didn’t rush the program. For to the US - the first time for many of example, if it took a while to properly them - to observe everything right develop a component or a procedure, we from the launch site in Roswell. It meant allowed that time. We also didn’t a lot to me, and it was really nice to compromise on the quality of our equip- have their company during the days of ment. Safety was the priority. Above all, waiting between our aborted launch we had the right team. Art Thompson, on 9 October and the final launch. who selected the (Stratos) mission team, says that we had a “perfect MTF: What is your next venture with storm” of expertise. In short, we were Red Bull and death-defying project? able to harness the first-hand knowledge of people who helped to produce some Baumgartner: “Death-defying” is of history’s most significant aerospace another term that I’m not crazy about. milestones, linking them with the best And after more than five years of focus- innovators and technology of today. ing intensely on Red Bull Stratos, let alone the whirlwind that followed, I’ll MTF: Had you worked with Red Bull need some time to consider my next before to know you could rely on move. I’ve got some fresh objectives in them to achieve your goal? mind, and I’ll discuss them with Red Bull as I formulate my ideas. I still love be- Baumgartner: Yes, I’ve been a Red ing in the air, and lately I’ve been flying Bull athlete for more than twenty years, helicopters every chance I get. When I and Red Bull has been a true partner in was kid I had two dreams: skydiving helping me achieve my goals, like and flying helis. Now I’ll have time to setting BASE jump world records and really pursue that second dream. I have jumps into caves and across the English my private helicopter licence in Austria Channel. I think we’re a good fit: we and the US as well as my commercial share a dedication to exploration and European licence. And I want to use my progression. piloting skills in ways that will be really useful, for movie shoots or fighting fires MTF: Is Red Bull been instrumental or mountain rescues. I recently piloted in cementing your dare-devil repu- athletes at the Paraski Europacup skiing tation in history? event in Austria, and I loved it.

Baumgartner: I really hope that I will MTF: Are you seeking investors for go down in the history books as some- them? thing more than a daredevil. I honestly don’t like that word, or terms like Baumgartner: It’s only been (a few) adrenaline junkie, because they give months since my jump. There has been people the impression that I just throw so little time to sit back and reflect that myself into projects for the thrill of it. In I’m still taking in what we accomplished fact, I plan out every one of my projects - and we’re continuing to learn more very carefully and I won’t undertake about how the mission data will benefit something if the risks are too high. But aerospace safety. One thing at a time. with regard to Red Bull’s role in my ca- reer, as I mentioned above, Red Bull has Alexander Koppel, chief commercial been a partner in my achievements for officer, Red Bull Media House many years.

MTF: Were your family and friends MTF: I note that Red Bull is a major watching the jump from the edge of media operator and owner; what as- space live? pects of the skydive is, effectively, Red Bull's copyrighted property?

31 MIPCube FEATURE Koppel: When you speak about a We just distributed a 90-minute docu- “major media operator and owner”, you mentary called Space Dive – The Red are referring to Red Bull Media House - a Bull Stratos Story in Germany, Austria global media company that produces and Switzerland, which offers viewers and distributes authentic content and an exclusive look behind the scenes. inspirational entertainment program- Exploitation across all channels is one of ming. In 2007, we formalised our global our key areas, which does not apply to media approach and launched the Red Red Bull Stratos only. Our portfolio of Bull Media House, among other projects, interesting content grows from year to to be responsible for the documentation year and we will continue offering and multi-platform distribution of Red high-quality content for a 360-degrees Bull Stratos. Therefore, we hold most of exploitation. the copyright of the media assets, which we produced around this five-year MTF: Is it fair to say your work with mission and beyond. Red Bull Stratos is the biggest achievement to date? MTF: Are you able to give some statistics about the skydive, Koppel: We certainly feel that the time including media coverage? is right to be a part of today’s media revolution, to be a leader by innovating Koppel: Yes, we can. With Red Bull content development and delivery. Stratos and other projects, we are As for the achievements of Red Bull aiming to be a part of today’s media Stratos, there are so many ways to as- revolution, to be a leader by innovating sess them. For us, one of the topmost content development and to inspire goals is helping our athletes and artists audiences. The mission drove true global to fulfil their own vision. While their pro- attention, with more than 1,000 front- jects range widely in scope, every time page stories in the print press around one of their dreams is realised, we feel the world, more than 1,000 radio it’s a significant accomplishment. In features and 77 broadcasters who took terms of the Internet, yes, it’s fair to say the live jump feed. In total, about 65 that Red Bull Stratos had the highest million viewers watched the live feed on real-time web visibility of any project TV. Also in digital the response was we’ve undertaken to date. We feel that amazing: 206 web partners around the the number of viewers alone isn’t an ad- world took the live jump feed. In total, equate assessment of our success, how- 52 million viewers watched the jump live ever. No matter the platform, we want on the web while 8 million watched our audience to be engaged with our concurrently on our YouTube channel, content. The reach of our programming which was the No. 1 most watched is important, obviously; but the engage- YouTube stream of all time. On top of ment metrics are ever more critical. that, over 70 million video-on-demand views of the final mission were tracked. MTF: People cannot ignore the fact that your media company is linked MTF: Red Bull Media House’s activi- to Red Bull, the iconic beverage ties include music, print publishing, manufacturer. Do the two online broadcast, content produc- companies ever work together? tion, platform distribution, live sports events, blogging; is the Koppel: Red Bull Media House is an Mission something that the company independent international media will be able to exploit in future? company, which licenses its own chan- nels and products while Red Bull’s stock Koppel: We will create further products, of unparalleled content is a rich source which will be available to the market for us. We definitely share a certain soon. The demand surrounding the mis- mindset and the core values with our sion, the stories around it and also Felix parent company. are still amazing.

32 MIPCube FEATURE I’m proud to say that the innovation that Advertisement is part of the DNA of Red Bull is integral to our own makeup as well. Still, the important thing to realise is that we have a close relationship with all of the companies that partner with us, with each side actively contributing to the ideas and, ultimately, to the results. In a sense, Red Bull is our partner company of longest standing. We have published and distributed print, audio- visual and multimedia material from the world of Red Bull ever since our inception in 2007, and today Red Bull Media House is the centre of the global Red Bull media network.

MTF: What new projects involving athletes and artists are due to be launched soon that we can talk about – on Red Bull Television, or with the Red Bull Music Academy?

Koppel: We are moving forward with even more momentum, and we keenly anticipate the expansion of our footprint Stock Images as a global media player. This means we From are continuing to innovate in content development and delivery. I don’t want to trigger a lot of speculation by describ- JayKay Media Pix ing these products in advance. But, as @ some examples, in the pipeline are some amazing films that I feel will prove to be www.jaykaymediainc.com/ our best work yet, from full-length docu- photo mentaries with broad appeal to our first fully scripted feature. And, on the digital side, we’ll be expanding our presence in the arena of games and apps, offering exciting new high-quality, cross-platform experiences in dozens of coun- tries. Many other products encompass- ing sport, music, culture and community are also on the way, including platforms such as television and print.

MTF: Future media plans?

Koppel: Red Bull Media House will con- tinue to innovate in content develop- ment and further approach the market with content and media products, which are able to inspire and fascinate.

Baumgartner and Koppel are joint keynote speakers at this year’s MIPCube/MIPTV event in Cannes, France, on 9 April. MTF

33 FEATURE THE CREATIVE CORPORATE PROFILE Al Jazeera Media Network, Qatar

Al Jazeera, the Qatar-owned international news Background network, has got quite a few accolades to its Although only launched in 1996 from its head- name. It has equally received more media atten- quarters in Qatar’s capital Doha, Al Jazeera’s tion than most of the subjects its journalists have star has risen high enough to compete against covered. much older global-news guards like the BBC Their efforts have received awards and harsh and CNN International. criticism in equal measures. The praises and Al Jazeera is the brainchild of Qatar’s emir, opprobrium are both due to its connections to Sheikh Hamad bin Khalifa Al Thani. He spent Qatar, the tiny Arabic country with the colossal nearly US$140m in grants and loans to create amount of wealth that made it possible to launch what his executives say is an impartial network a brand new fast-growing global brand in the that bridges the Middle East and the rest of the hotly competitive international TV market 17 world. years ago. The standard of its initial output was high as it The country, famous for winning the hotly con- was employing BBC World Service staff made tested bid to host the 2022 FIFA World Cup soc- redundant by the termination of BBC Arabic cer tournament, is part of the Middle East, a Television, a joint venture with the Saudi-owned volatile region in terms of politics and warfare. Orbit Communications Corporation. But Al Jazeera’s journalistic achievements have been praiseworthy. The original Arabic- Al Jazeera TV channels language round-the-clock news service revolu- The original Arabic-language Al Jazeera was tionised the way international events were cov- transmitted via satellite into 22 Middle East ered in the very conservative Arabic-speaking countries and immediately became a hit with territories. Al Jazeera English, its English- viewers not used to a frank reports on their language edition, is the first global news network local networks. to originate from outside the Western world. With the addition of Al Jazeera English, which In October 2001, the network’s Arabic channel went live in November 2006, and its specialist nabbed exclusive interviews with the late Al Arabic-language sister channels in sports, kids’ Qaeda leader Osama bin Laden, a totally un- programming and documentaries, among reachable individual wanted by US law enforce- others, the platform is in more than 260 million ment agents. homes in 130 countries. And this was shortly after the horrific 11 Sep- The programmes can also be watched live and tember 2001 terrorist attacks against the US that free on the Aljazeera.net website; they are Al Qaeda took credit for. accessible via as many connected digital devic- Considering no one knew where bin Laden es as possible, and can be seen on the Livesta- was located, the interview was quite a scoop, as tion streaming-TV platform and on Al Jazeera’s were Al Jazeera’s on-the-ground coverage of YouTube channel. the US and allies invading Afghanistan. Its Arabic-language specialist networks include These feats raised the network’s profile among more than 16 sports channels that cover a wide its international peers and rivals. US politicians, range of international events, from soccer, however, interpreted Al Jazeera’s access to Al cricket, tennis, basketball, motor racing, winter Qaeda as some kind of collusion. Former US sports, and rugby to athletics. president George W Bush’s Administration re- The sports channels have won exclusive live portedly labelled it “the terrorist network”. He Arabic-language rights or share rights and and other critics said Al Jazeera had highlights to major events like premier-division become the terrorists’ mouthpiece – a charge Al soccer in France, Spain, Italy, the Netherlands Jazeera totally denies. But mud of any kind plus several competitions, including the Africa sticks and the accusation continues to tarnish Al Cup of Nations, UEFA Champions League, Jazeera’s image at a time when its Qatari South America’s Copa America and the Saudi backers say they are determined to establish its Professional League. goal to be a positive global influence.

34 FEATURE Sister company Qatari Sports Investments has industrial conglomerate. It was being launched formed beIN Sport to acquire rights aimed at to target Pakistan viewers and expatriates. Also specific foreign markets. Currently, beIN Sport in the pipeline is a Spanish-language news offers programming in France, Russia and, via a service. These setbacks make you wonder joint venture with Time Warner, the US. whether the original Al Jazeera and Al Jazeera In addition to a growing number of other niche English services are one-hit wonders. Or have services, there is the Al Jazeera Documentary the accusations of biased and unbiased report- Channel. Al Jazeera Children’s Channel (JCC) ing, depending on which side you are talking to, is aimed at Arab-speaking school children and started to have repercussions? young teenagers, while its sister network BaraemTV is for pre-schoolers. The Qatar Connection Qatar has the highest gross domestic product Corporate (GDP) per head in the world at about The holding company Qatar Media Corporation US$102,943 a year. The wealth of this small was recently renamed Al Jazeera Media Net- desert peninsula nation stems from the overa- work (AJMN). It made sense as the Al Jazeera bundance of natural gas and oil with a current brand name has become much stronger within valuation of trillions of dollars discovered since international media circles than the Qatar name. Qatar gained independence from British rule in However, Qatar’s government also said it the 1970s. Via the government-owned enterpris- wanted to convert the state-owned operation es such as Qatar Holdings, the sovereign into a “private institution of public utility”. wealth fund Qatar Investment Authority, and It remains unclear what the precise objective is Qatar Sports Investments (QSI), the country has for a “private institution of public utility”. But, as stamped its mark over several foreign land- some industry observers point out, it needs to be marks, national treasures and businesses. either a private institution or a public utility, not In the UK, Qatar’s investment vehicles (via the both. And, they also note, it does not seem to Qatari Diar subsidiary) owns the iconic Harrods mean the ownership structure has changed. department store, the £3bn Chelsea Barracks However, AJMN executives argue that the property venture, the £275m Olympic Village restructuring will allow the group to expand that served the 2012 London Olympic Games, internationally more easily, especially as it seeks and 95% of The Shard in London, which is the third-party partners. tallest building in the European Union and an increasingly popular tourist trap. Qatar is the Expansion pains largest single shareholder in the UK-based The launch of localised versions of Al Jazeera’s Sainsbury’s supermarket chain, and has had a news service confirms the company’s ambitions significant stake in Barclays Bank PLC. to be a truly global operation, not just a success- In the media-and-entertainment industries, QIA ful pan-Arab one. has shares in Filmyard Holdings, the company Al Jazeera Balkans, which is transmitted to that owns movie production group Miramax. Montenegro, Serbia, Bosnia, Herzegovina, Qatar Holding is a significant player in Croatia, Kosovo, Macedonia, and Slovenia, went Lagardere Group, the French multinational live in November 2011. It comprises six-hours of media conglomerate. dedicated content within the 24-hour Al Jazeera In 2010, the Qatar Foundation became the first English network. business entity to sponsor Spain’s FC Barcelo- But attempts to repeat that format in other terri- na soccer shirts. In 2011, QSI bought 70% of tories have not been easy. Plans to launch Al French first-division soccer club Paris Saint- Jazeera Turk in Turkey started smoothly when Germain (PSG) from US private-equity firm the company bought the bankrupt Cine5 pay-TV Colony Capital for about €100m, and grabbed network in 2011 for a reported US$40.5m. the remaining shares a year later. With an But Al Jazeera clashed with local politicians estimated further €340m-plus, QSI has made and investors after disagreeing over their re- PSG one of the world’s richest sports operations spective definition of what censorship is. The that also includes a popular handball team. PSG launch has, therefore, been put on hold while now boasts an annual budget of about €390m. those issues are resolved. AJMN made history in 2011 when its sports There were plans for an Al Jazeera Kiswahili, networks won the contract to share the live which would have been targeting the East broadcasting rights to French premier league African states of Tanzania, Kenya, Uganda, (Ligue1) soccer games with the national pay-TV Burundi and Rwanda. That ambition appears to network Canal+; the deal, which covers the be cancelled due to alleged financial limits. 2012-2016 seasons, was the first time that A similar fate has befallen the Urdu edition, a Canal+ had not dominated key domestic rights. joint venture with Dubai-based ARY Group AJMN also has the rights to market and sell 35 FEATURE the Ligue 1 rights overseas. It has also replaced Summer Olympic Games. Canal+ by gaining the majority of the 2012-2015 media-rights packages for the UEFA Champi- Criticisms – Current TV ons League soccer competitions in France. A Another round of opprobrium has been hurled at similar deal was struck for the Europa League Al Jazeera. It recently confounded the interna- broadcast rights. tional media sector again when it agreed to buy PSG has used its Al Jazeera-powered Current TV, the San Francisco-based socially- influence to sign up British soccer star David conscious cable TV network co-founded by Beckham, arguably the world’s most famous former vice-president Al Gore. footballer, for a five-month stint. The acquisition AJMN paid US$500m for the acquisition and of Beckham, who had been at US club Los the move is part of its ambitions to launch Al Angeles Galaxy, brought some fanfare and Jazeera America. It plans to shut down Current glamour to PSG brand. At 37 years old, the TV and take over the network into 40 million US sports world pointed out that Beckham was not homes when launched. Currently, Al Jazeera there to score goals. English is in only 4.7 million homes in major But Beckham, who is currently Europe’s metropolitan districts in Washington DC and highest paid soccer player (see Sport News – New York City, a situation that triggered criti- page8), does come with enviable experience cisms among media pundits wondering why US having played for Manchester United Football viewers had no access to Al Jazeera’s coverage Club, Real Madrid and been captain for the of the Afghan war. English national team. Now PSG president But there are already reports of a backlash Nasser Al-Khelaifi has told the French media he among the country’s cable carriers, including would like to extend Beckham’s stay at PSG. Time Warner Cable and Comcast Corporation. In the world of haute-couture fashion, Italian Should they refuse to retransmit Al Jazeera fashion-design icon Valentino was acquired by America, as has been alleged in media reports, the royal-family controlled Mayhoola for Invest- AJMN will have another setback overseas. ments (a segregated portfolio company) for The US scepticism targeted at AJMN intensi- €700m last year; and Qatar Luxury Group, fied when Al Gore found himself defending his which belongs to Sheikha Mozah bint Nasser Al decision to sell to the Qatar media company. Missned (the emir’s wife), bought a US$42m stake in UK designer Anya Hindmarch. This The future year, QIA has been boosting its stake in The Osama bin Laden scoop mentioned earlier, Tiffany’s, the famous US jewellery department the coverage of the Afghanistan war and its up- store and silversmith. to-the-minute reports on the Arab spring revolu- This excludes interests in a myriad number of tions in North Africa and the Middle East has other industries worldwide. While not directly won the Al Jazeera news services much praise. related, most of these investments by the Qatar It successfully exploited its Arabic origins to royal family and government illustrate the finan- gain access to original Arabic voices and opin- cial clout that Al Jazeera’s owner is wielding at ions. Al Gore has publicly stated that it agreed home and abroad. to sell Al Jazeera’s bid for Current TV because he is convinced it would provide an alternative Criticisms – FIFA World Cup voice to news reporting in the US. The close link between the TV network and AJMN’s problem stems from the fact that Qatar’s rulers has spurred suspicion on its when its Arabic neighbours have complained rivals’ part. Despite the extensive experience in about some of its frank journalistic reports criti- broadcasting sports events, Qatar’s triumph in cising their policies, it has relented, according to winning the bid to host the 2022 FIFA World former Al Jazeera executives. Cup has come with recriminations. This has undermined the TV service’s claim to In addition to accusations that the country is impartiality and, consequently, credibility physically too small to host such a mammoth remains an issue. event and that the climate’s extreme heat would However, it cannot pretend that its links to be unbearable for players, there were allega- Qatar’s government and royal family and its tions that the bid was won via bribery. Qatar has origins within the conflicted Middle East denied this. Its plans to revamp its capital Doha territories do not pose a problem. Still, as long for between US$130bn and US$150bn in prepa- as it has Qatar’s trillions of dollars in oil and nat- ration for the World Cup are going ahead. Qatar ural gas for support, it just might be able to bide did host the 2006 Asian Games, a regional its time to figure out what its long-term version of the Olympic Games. But gripes of its objectives are. MTF disorganisation are said to have contributed to the country losing the bid to host the 2016 36 MTF Diary London: David Bowie Is Sydney: Fashion Week Australia Until 11 August 2013 8-12 April 2013 @: Victoria and Albert Museum @: Carriageworks Organised by: V&A; Gucci Organised by: IMG Worldwide About: First international retrospective About: Runway shows, haute-couture, dis- of legendary rock star, including music, fash- plays from the latest designer labels ion, photos and film Details: http://australia.mbfashionweek.com Details: www.mipworld.com New York: Fashion and Technology New York: African Art, New York, and the Until 8 May 2013 Avant Garde @: Fashion & Textile History Gallery Until 2 September 2013 Organised by: Fashion Institute of @: Metropolitan Museum of Art Technology Organised by: Metropolitan Museum of Art About: Advances in technology in fashion About: Imported African art in New York Details: www.fitnyc.edu Details: http://www.metmuseum.org Prague: Urban Popcultures New York: The AIPAD Photography Show 12-14 May 2013 4-7 April 2013 @: Michna Palace Organised by: Inter-Disciplinary.Net @: Park Avenue Armory, NYC rd Organised by: The Association of Interna- About: 3 global conference on the impact of tional Photography Art Dealers alternative cultural movements and creative About: Contemporary, modern and vintage trends on urban life photography art for sale Details: www.inter-disciplinary.net Details: www.aipad.com London: Music 4.5 – Image Copyright… Cannes: MIPCube the new debate, the new boundaries of mu- 7-11 April 2013 sic licensing @: Palais des Festivals 14 May 2013 Organised by: Reed-MIDEM @: Lewis Silkin, Chancery Lane, EC4 About: Unique event for architects of Organised by: 2Pears tomorrow’s media/TV entertainment About: Conference debate about complexities Details: www.mipworld.com in music copyright and licensing Details: www.music4point5.com Cannes: MIPTV 8-11 April 2013 New York: BookExpo America @: Palais des Festivals 29 May to 1 June 2013 Organised by: Reed-MIDEM @: Javits Center, NYC About: 50th anniversary of biggest global TV Organised by: Reed Exhibitions and media entertainment gathering About: The US’ largest book-publishing Details: www.mipworld.com gathering for selling and buying rights Details: www.bookexpoamerica.com London: London Book Fair 15-17 April 2013 Venice: Art Biennale @: Earls Court Exhibition Centre 1 June-24 November 2013 Organised by: Reed Exhibitions @: Various venues, including the Giardini About: Global event for book rights sales and and the Arsenale negotiations Organised by: La Biennale Details: www.londonbookfair.co.uk About: Prestigious art exhibition Details: www.labiennale.org Lodz: FashionPhilosophy Fashion Week Poland Singapore: The Future of Ideas, 17-21 April 2013 Innovation & Creativity @: Ksiezy Mlyn, Lodz Special Economic Zone 3-7 June 2013 Organised by: FashionPhilosophy; ModaForte @: TBA Grupa Kreatywna Organised by: Ludvik + Partners st About: Biggest fashion event in Eastern/ About: Event on the uniquely 21 business Central Europe model of crowd-sourcing and crowd-funding Details: www.fahionweek.pl Details: www.crowdsourcingweek.com 37 MTF Diary Washington DC: World Creators Summit New York: US Open Tennis Championships 4-5 June 2013 26 August-9 September 2013 @: Ronald Reagan Center, Washington DC @: Billie Jean King National Tennis Organised by: CISAC Center, Flushing Meadows Corona Park About: International creators, policy makers Organised by: US Tennis Association and industry leaders debate the future and About: US edition of the four international protection of creativity in the digital world Grand Slam tennis competitions Details: www.creatorssummit.com Details: www.usopen.org

Belfast: Belfast Photo Festival London: Music 4.5 – Smart Radio 2 6 June 2013 onwards 24 September 2013 @: Various venues in Belfast @: Lewis Silkin, Chancery Lane, EC4 Organised by: Northern Ireland Tourist Organised by: 2Pears Board; Arts Council of Northern Ireland; About: How the collection of data is making a Belfast City Council adding new value to music radio online About: Second edition of Northern Ireland’s top Details: www.music4point5.com visual-arts event, plus its Open Exhibition contest Details: www.belfastphotofestival.com Cannes: MIPCOM 2013 7-10 October 2013 Monaco: Monte Carlo Television Festival @: Palais des Festivals 9-13 June 2013 Organised by: Reed MIDEM @: Grimaldi Forum, Monaco About: International forum for creators and Organised by: Monaco Mediax vendors of multi-platform entertainment About: Glamour, stars and talent meet to Details: www.mipcom.com celebrate international TV entertainment and the coveted Golden Nymph awards Frankfurt: Book Fair Details: www.tvfestival.com 9-13 October 2013 @: Messegelande Cannes: Cannes Lions International Festival of Creativity Organised by: Frankfurter Buchmesse 16-22 June 2013 About: The biggest gathering of international @: Palais des Festivals, Cannes book publishing, rights sale and licensing Organised by: Cannes Lions Details: www.book-fair.com About: Global advertising industry vie for the Cannes Lions awards and debate impact of digital Amsterdam: Amsterdam Dance Event tech on marketing 16-20 October 2013 Details: www.canneslions.com @: Various venues in the city Organised by: ADE Foundation/BUMA Wimbledon: The Championships About: The 18th edition of the quintessential 24 June to 7 July 2013 dance-music festival and conference @: The Grounds; south-west London Details: www.amsterdam-dance-event.nl Organised by: All-England Lawn Tennis Club About: The UK leg of the four Grand Slams London: Frieze London Details: www.wimbledon.com/en_GB/index.html 17-20 October 2013 @: Pop-up venue in Regent’s Park Moscow: World Championships in Organised by: Frieze Athletics About: 170 contemporary-art galleries world- 10-18 August 2013 wide exhibit and sell latest works @: Luzhniki Stadium Details: http://friezelondon.com Organised by: IAAF About: Leading international athletics event London: Music 4.5 – The Rise of Video, Details: www.mos2013.org Video Fuelling the Music Business Model 26 November 2013 Cologne: GDC Europe @: Lewis Silkin, Chancery Lane, EC4 19-21 August 2013 Organised by: 2Pears @: Congress-Centrum Ost Koelnmesse About: Using videos to retain live-music fans’ Organised by: UMB Technology loyalty and drive ticket sales About: Games developers unite in Europe Details: www.music4point5.com Details: www.gdceurope.com 38 FEATURE FORUM 2013: Why it is the year of the e-bookconomy

The creative industries should open their eyes and take a closer look at the still clunky devices known as e-readers. They are gradually turning into a predominant digital mass-media distribution channel, and 2013 could be the year in which we see that happen. While the general media recently thought it unusual for the long financially suffering eMusic, one of the first international subscription-funded online music services, to merge with e-book distributor K-NFB Reading to survive, MTF was not surprised. Digital technology is not disruptive out of a whim. It is bringing together creative industries that might once have been thought incongruous, especially if they originate from different creative disciplines. And why not? Media Arc, as the merged eMusic and K-NFB will be called, now has the rights to 17 million songs, 600,000 e-books and 40,000 audio books to offer its digital customers. And increasingly, technology is allowing those same customers to access the three different content formats on one digital device.

MULTI-CONTENT DEVELOPMENT Here is another e-book-influenced digital development. 40 Years of Queen is a massive physical coffee-table book published last year. It features everything there is to know about Queen, the flamboyant British rock band and one of the most influential rock- music brands ever. In December, the digital arm of its publisher Carlton Books released an e-book version for Apple’s iPad or iPad Mini, the portable computer tablets that can be converted into e- book readers using the iBook software. 40 Years of Queen is described as “the most advanced interactive music e-book in the market”. It has photos, audio interviews with members of the band, puzzles, animation, copies of handwritten lyrics and letters and links to tracks on Apple’s iTunes store. And while the book’s original print version costs £30.00, this interactive digital treasure costs only £9.99. As Queen guitarist Brian May told UK trade magazine The Bookseller: “Technology is causing us to rethink once again and rediscover what a book really is and what it has the potential to be.” By being dismissive of e-readers, makers of smartphones and video-friendly tablets allowed Amazon.com, the pioneering online seller of physical books and e-books, to de- velop the increasingly popular Kindle e-reader in 2007. It has since used the device to disrupt old and new media businesses.

39 FEATURE FORUM

Amazon has challenged the traditional brick-and-mortar book stores and won a place in book-retail history. Astonishingly, it has also grown into a fearsome book publisher and a revered conduit for the growing number of competent self-publishing authors out there. Thanks to Kindle and Amazon’s online network, they can sell directly to consum- ers without needing a gargantuan printing plant to churn out paper books. Moreover, the newer Kindle Fire, a mini multi-functional version of the Kindle, not only accesses e-books, but also digital music, streaming movies, social games, mobile apps, social media and email via the Internet. The content is stored on ‘cloud’ servers, ena- bling access anytime, anywhere, anyhow. As avid readers take to their Kindle Fire, the strategy is to spur the impromptu pur- chase of music, videos, games, and more books while they are online. OK, global sales of single-function e-book devices will start declining rapidly from its peak of 23.2 million units in 2011, according to a report by IHS iSuppli Research. First, it doesn’t mean e-books sales are dropping, just the reading devices. Additional- ly, it shows e-reader makers might be realising that book-loving consumers just might want to interact with other content on the same device. NOOK, the e-reader created by US bookstore giant Barnes & Noble, now has offshoots called the NOOK HD and NOOK HD+ tablets, which enable us- ers to read books as well as stream movies, TV shows and other content apps. Like the Kindle Fire, NOOK HD (which launched in the US last September and is already in the UK) makes its apps compatible to other reading devices and tablets, including Apple’s iPad. Their users can buy e-books and other content from NOOK online stores. That Microsoft, the software giant with digital- entertainment ambitions, in- vested US$300m in NOOK last year shows how the e-book business is luring investors.

E-BOOK INTERESTS GO INTERNATIONAL Other ambitious e-reader brands are supported by companies experienced in media and entertainment. Kobo (anagram of the word ‘book’), Canada’s leading e-reader mak- er, was sold by Indigo Books & Music to Japanese global conglomerate and e-commerce website Rakuten a year ago. Rakuten has been an investor in TV broadcasting (Tokyo Broadcasting System), owns a baseball team, led a US$100m investment round in social-media darling Pinterest, and operates Wuaki.tv, Spain’s answer to Netflix. Vintage Books, part of Knopf Doubleday Publishing Group, paid US$1m for the rights. To date, the Fifty Shades trilogy has sold more than 65 million copies worldwide as hardbacks, paperbacks and digital files. media business for US$89.5m. The book-publishing sector itself is beginning to get the picture. It sees there is no need to market one digital-device type for watching videos, another for music listening, and yet another for reading books. Sony Corp, a global entertainment conglomerate, owns a line in e-readers. South Korea’s iRiver Story e-reader is made by an electronics and entertainment group founded by former Samsung executives.

40 FEATURE FORUM

It was when major book publishers noticed how the erotically charged Fifty Shades of Grey, licensed to a tiny Australian independent publisher, was shooting to the top of the New York Times fiction e-books chart, that they realised reaching e-book readers generated cash. This success contributed to Vintage’s owner Random House, a subsidiary of German media conglomerate Bertelsmann, going one step further with its e-book ambitions. It has announced plans to merge with iconic UK publisher Penguin to form the world’s big- gest consumer book-publishing group. The enlarged Penguin Random House is expected to use US digital-media agency Smashing Ideas, a Random House subsidiary acquired in 2011, and future acquisitions to produce apps based on TV programmes adapted from Random House books. The programmes will be made by Random House’s TV-production sister company FremantleMedia. Meanwhile, in December, Penguin’s seller Pearson grabbed 5% of NOOK’s digital-media business for US$89.5m.

FILM, TV, MUSIC, PHOTOS Other enterprises are making imaginative use of e-books and digital reading devices. As far back as 2010, Penguin Book joined forces with TV producer/distributor Starz En- tertainment to issue the first e-book tied to a DVD release. Purchasers of Ken Follett’s epic fiction The Pillars of the Earth in the iPad e-book format could watch a trailer of the star-studded eight-hour TV drama produced by Germany’s Tandem Communications. An Amplified Edition allowed readers to access regularly updated videos based on the book and the series. In the US, Barnes & Noble’s NOOK Media has licensed several movies and TV shows for the NOOK tablet from heavyweight Hollywood studios like Lionsgate, Paramount Pic- tures and MGM. As mentioned earlier, the UK’s Carlton Digital has made rock band Queen’s music available via an interactive e-book featuring links to iTunes. Before then, a small UK publisher Bedford Books had used the same music-links strategy for The Biographical Dictionary of Popular Music, which was published in May. NBC Publishing, part of the US’ NBC TV network, recently decided an e-book on iPad was more user friendly than an app for the second-screen experience accompanying Grimm, the fantasy crime TV series. Marvel Comics joined forces with music-production company CORD Worldwide and branded-content agency to develop Project Gamma, a technology that enables readers of its digital graphic novels to listen to soundtracks or sound effects as the narrative progresses.

ADVERTISING-FUNDED BOOKS A Silicon Valley start-up in Palo Alto called eBookPlus offers a platform that will enable publishers and authors to sell advertising space in their e-books, an option that it be- lieves will counter online piracy by making money for the rights owners. Now, to continue colliding against the traditional, Amazon has entered the book- publishing fray again. It has filed a patent for a technology that will allow the sale of second-hand e-books. This is controversial because, currently, purchasers can only lend e-books to friends, they cannot re-sell them; the technological infrastructure will not allow it. But, with its new patent, Amazon could bypass that hurdle. The e-book economy might not be firing our imaginations the way streaming videos, premium music services, and social mobile games are doing. And book fans continue to love touching the paper and printed text that makes the oldest media platform still a force to reckon with today. But while a book publisher is unlikely to ensnare a games player to read a bestseller via a games console, a games publisher has a pretty damn good chance of getting an e -book reader to take a shot at its latest digital release, and listen to the soundtrack, and watch the film…we could go on. MTF

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