complemento da edição 57 da revista exame pme

Music

Summary 266

North America 268

Europe, Middle East, Africa (EMEA) 273

Asia Pacific 282

Latin America 289

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266 PwC | Global entertainment and media outlook: 2012–2016

Market size and growth by regionGlobal spending on music rose 1.3 percent in 2011—the first increase in years, as growth in concerts and music festivals offset a modest decline in recorded music. Recorded music spending fell only 2.4 percent in 2011 compared with decreases averaging more than 8 percent annually in prior years. Beginning in 2013, growth in digital spending will offset the ongoing decline in physical spending, leading to a rebound in overall spending on recorded music. Even with recorded music increasing in 2013, spending will remain 38 percent lower than in 1999. Overall global spending on music, including concerts and music festivals, will increase at a 3.7 percent compound annual rate to $59.7 billion in 2016 from $49.9 billion in 2011.

EMEA, the largest region at $21.1 billion in 2011, will expand at a 3.0 percent compound annual rate to $24.4 billion in 2016. North America was the fastest-growing region in 2011, with a 3.2 percent increase, and will be the fastest growing during the next five years, averaging 5.4 percent on a compound annual basis to $21.5 billion in 2016 from

$16.5 billion in 2011. Asia Pacific will increase at a 2.2 percent compound annual rate to $12.3 billion in 2016 from $11 billion in 2011. Excluding Japan, growth in Asia Pacific will average 7.3 percent compounded annually. Latin America will increase at a 4.2 percent compound annual rate to $1.5 billion in 2016 from $1.3 billion in 2011.

Market size and growth by componentDigital distribution will increase from $7.7 billion in 2011 to $14 billion in 2016, a 12.6 percent compound annual advance. Physical distribution will decline at a 6.7 percent compound annual rate to $11.3 billion in 2016 from $16 billion in 2011. Globally, digital distribution will surpass physical distribution in 2015. Overall spending on recorded music will begin to expand in 2013 and will rise to $25.3 billion in 2016 from $23.7 billion in 2011, a 1.3 percent increase compounded annually. Spending on concerts and music festivals will increase from $26.2 billion in 2011 to $34.5 billion in 2016, a 5.6 percent compound annual advance.

Principal driversNew streaming services will fuel growth in digital distribution, helped by broadband, smartphone, and tablet penetration growth. The adoption of graduated-response systems, which involve Internet service providers’ issuing warnings to file sharers that escalate in severity with the ultimate threat of disconnecting a user’s Internet access, is proving to be effective in limiting peer-to-peer file sharing. The digital market also will benefit from social media activity, which stimulates interest in acts, contributing to the growth in downloads.

Physical distribution will continue to decline during the latter part of the forecast period but at moderating rates as the remaining physical market increasingly comes to consist of people who prefer music in physical formats. In Asia Pacific, piracy has decimated the physical market in a number of countries, which will limit future declines.

The touring market rebounded in 2011, and local festivals contributed to the expansion. We expect a healthy festival market to drive growth during the next five years. Growth in 360 deals with labels will enhance the market, as labels will be actively promoting tours as they share in performance revenues.

MusicThe music market consists of recorded music and live music. Recorded music comprises spending on physical formats—albums, single sound recordings, and music videos—as well as digital distribution. Digital distribution consists of music distributed to mobile devices and music downloaded from the Internet through licensed services or app stores. Revenue from subscription and advertiser-supported streaming services is also included.

For the first time, we have included estimates and forecasts for live music. Live music consists of concerts and music festivals and comprises end-user spending on tickets as well as sponsorships.

The recorded music market includes neither subscription fees paid to satellite radio providers nor advertising generated by Internet radio services, nor does it include revenues from music publishing.

Spending is measured at retail, which can be substantially higher than the wholesale or trade value revenues often reported.

Summary

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Music | Summary 267

Global music market by region (US$ millions)

Region 2007 2008 2009 2010 2011p 2012 2013 2014 2015 20162012–16

CAGR

North America 19,777 18,291 17,879 16,009 16,528 17,247 18,103 19,101 20,241 21,473

% Change –3.8 –7.5 –2.3 –10.5 3.2 4.4 5.0 5.5 6.0 6.1 5.4

EMEA 23,544 22,698 22,407 20,925 21,062 21,441 22,018 22,734 23,527 24,409

% Change –3.8 –3.6 –1.3 –6.6 0.7 1.8 2.7 3.3 3.5 3.7 3.0

Asia Pacific 12,136 11,972 11,605 11,096 11,037 11,138 11,303 11,563 11,911 12,316

% Change 1.0 –1.4 –3.1 –4.4 –0.5 0.9 1.5 2.3 3.0 3.4 2.2

Latin America 1,336 1,260 1,263 1,240 1,259 1,298 1,347 1,412 1,462 1,543

% Change –7.5 –5.7 0.2 –1.8 1.5 3.1 3.8 4.8 3.5 5.5 4.2

Total 56,793 54,221 53,154 49,270 49,886 51,124 52,771 54,810 57,141 59,741

% Change –2.9 –4.5 –2.0 –7.3 1.3 2.5 3.2 3.9 4.3 4.6 3.7

Sources: PricewaterhouseCoopers LLP, Wilkofsky Gruen Associates

Global music market by component (US$ millions)

Component 2007 2008 2009 2010 2011p 2012 2013 2014 2015 20162012–16

CAGR

Recorded music

Physical distribution 27,151 22,954 19,974 17,163 15,969 14,610 13,506 12,603 11,873 11,308

% Change –13.6 –15.5 –13.0 –14.1 –7.0 –8.5 –7.6 –6.7 –5.8 –4.8 –6.7

Digital distribution 5,173 6,204 6,799 7,114 7,731 8,864 10,063 11,326 12,631 13,966

% Change 42.0 19.9 9.6 4.6 8.7 14.7 13.5 12.6 11.5 10.6 12.6

Total recorded music 32,324 29,158 26,773 24,277 23,700 23,474 23,569 23,929 24,504 25,274

% Change –7.8 –9.8 –8.2 –9.3 –2.4 –1.0 0.4 1.5 2.4 3.1 1.3

Concerts and music festivals 24,469 25,063 26,381 24,993 26,186 27,650 29,202 30,881 32,637 34,467

% Change 4.5 2.4 5.3 –5.3 4.8 5.6 5.6 5.7 5.7 5.6 5.6

Total 56,793 54,221 53,154 49,270 49,886 51,124 52,771 54,810 57,141 59,741

% Change –2.9 –4.5 –2.0 –7.3 1.3 2.5 3.2 3.9 4.3 4.6 3.7


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The outlook in brief• Streaming services will boost digital spending.

• Declines in physical distribution will remain at single-digit levels as the remaining market increasingly consists of people who prefer physical music.

• New venues and growth in festivals will propel spending on live music.

Overview• The recorded music market fell 0.9 percent in 2011, the

smallest decrease in years as growth in digital distribution nearly offset a moderating decline in physical spending.

• Physical distribution will drop from $3.7 billion in 2011 to $2.4 billion in 2016, an 8.1 percent compound annual decrease.

• Digital distribution will overtake physical distribution in 2012 and will rise at an 11.7 percent compound annual rate to $5.7 billion in 2016 from $3.3 billion in 2011.

• Total spending on recorded music will begin to expand in 2012 and will rise at a 3.1 percent compound annual rate to $8.2 billion in 2016 from $7 billion in 2011.

• Spending on concerts and music festivals will expand at a 6.9 percent compound annual rate from $9.5 billion in 2011 to $13.3 billion in 2016.

• The overall music market will total $21.5 billion in 2016 from $16.5 billion in 2011, a 5.4 percent increase compounded annually.

Music market by component† (US$ millions)

North America 2007 2008 2009 2010 2011p 2012 2013 2014 2015

2016

Recorded music





Total 19,777 18,291 17,879 16,009 16,528 17,247 18,103 19,101 20,241 21,473

†At average 2011 exchange rates.Sources: PricewaterhouseCoopers LLP, Wilkofsky Gruen Associates

Music market growth by component (%)

North America 2007 2008 2009 2010 2011p 2012 2013 2014 2015 20162012–16

CAGR

Recorded music

Physical distribution –19.1 –27.0 –20.2 –18.8 –8.0 –9.1 –8.7 –8.0 –7.6 –6.9 –8.1

Digital distribution 42.7 11.5 2.7 –2.1 8.7 12.2 12.3 12.2 11.4 10.6 11.7

Total recorded music –9.8 –17.8 –12.8 –12.4 –0.9 0.9 2.3 3.6 4.2 4.7 3.1

Concerts and music festivals 5.3 6.1 8.6 –8.8 6.5 6.9 6.8 6.8 7.1 7.0 6.9

Total –3.8 –7.5 –2.3 –10.5 3.2 4.4 5.0 5.5 6.0 6.1 5.4


North America

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Music | North America 269

• The US market rose 3.4 percent in 2011, benefiting from a rebound in live music that offset a modest decrease in recorded music. We expect growth to average 5.5 percent compounded annually from $15.2 billion in 2011 to $19.8 billion in 2016.

• Canada’s recorded music market continued to decline in 2011, although at a more moderate rate compared with prior years, as a turnaround in concerts and music festivals boosted overall spending by 2.0 percent. We project spending to increase at a 4.1 percent compound annual rate from $1.3 billion in 2011 to $1.6 billion in 2016.

Music market by country† (US$ millions)

North America 2007 2008 2009 2010 2011p 2012 2013 2014 2015 20162012–16

CAGR

United States 18,375 16,907 16,484 14,703 15,196 15,871 16,676 17,616 18,685 19,844 5.5

Canada 1,402 1,384 1,395 1,306 1,332 1,376 1,427 1,485 1,556 1,629 4.1

Total 19,777 18,291 17,879 16,009 16,528 17,247 18,103 19,101 20,241 21,473 5.4


Recorded music

Digital distribution

• After growing 2.7 percent in 2009 and declining 2.1 percent in 2010, the digital market rose 8.7 percent in 2011. Growth was fueled by a rebound in overall downloads and a growing share of higher-priced albums in the download mix.

• While a digital album generally costs more than a single-track download, an exception in 2011 was Lady Gaga’s Born This Way album, which was offered for 99 cents and sold 2.5 million copies, providing a lift for the overall market.

• Social media also are playing roles in boosting the digital market. Online commentary on American Idol and Glee are driving downloads from those shows; and general online commentary on acts and artists is stimulating interest and boosting downloads.

• Social media also help promote new acts. One Direction, a new boy band, launched in the United States with a social network campaign, resulting in significant downloads of the band’s single prior to radio airplay.

• The number of downloads increased by 5.0 percent in 2011. We expect growth to average 5.0 percent compounded annually during the next five years from 1.6 billion in 2011 to 2 billion in 2016.

• Popular music streaming service Spotify in Europe entered the US market in 2011 with a freemium package. A limited-access advertiser-supported option is available for free to users. Users can also pay for unlimited access at monthly fees of $4.99 for online access and $9.99 for mobile access. By year-end 2011, there were more than 10 million total Spotify users.

• Because of licensing issues, Spotify is not yet available in Canada but plans to enter that market.

• MOG and Rdio are other subscription streaming services. MOG provides users with a fixed amount of listening time per month that can be augmented if a user enrolls friends. Rdio also provides access on a time-based model.

• Rara launched in both the United States and Canada in 2011 offering more than 10 million tracks for $4.99 for online access and $9.99 for mobile access.

For digital recorded music unit sales data, visit www.pwc.com/outlook

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• Google Music also launched in 2011 with a cloud-based service that allows users to store up to 20,000 songs for free and is selling music through its Android platform.

• Amazon also launched a cloud service. Amazon Cloud Drive gives users 5 gigabytes of free storage with an option to expand that to up to 1,000 gigabytes at a cost of $1 per gigabyte. Purchases through Amazon can be stored for free, and users can access music through the Amazon Cloud Player.

• Rhapsody, which acquired Napster in 2011, and Vevo, which launched in 2009, are other streaming services in the market.

• In Canada, Galaxie Mobile, the first Canadian-owned subscription-based mobile streaming service, was launched in 2011.

• Growth in smartphone and tablet penetration will expand the potential market for streaming services and for digital music in general.

• The market also will benefit from new antipiracy developments. In a deal in the United States that was agreed to in 2011 and implemented in 2012, Internet service providers will send notices to copyright infringers that will escalate in severity, with the ultimate prospect of shutting off broadband access. Such plans have proved successful in other countries.

• We expect digital spending in the United States to grow at double-digit rates during the next five years, averaging 11.7 percent compounded annually to $5.5 billion in 2016 from $3.1 billion in 2011.

• We expect Canada, which is behind the US in its develop-ment of a licensed digital market, to continue to be the faster-growing country as its digital market catches up. We project spending on digital music in Canada to increase at a 12.8 percent compound annual rate to $276 million in 2016 from $151 million in 2011.

• The overall North American market will expand at an 11.7 percent compound annual rate to $5.7 billion in 2016 from $3.3 billion in 2011.

Digital recorded music market† (US$ millions)

North America 2007 2008 2009 2010 2011p 2012 2013 2014 2015 20162012–16

CAGR

United States 2,629 2,909 2,972 2,892 3,137 3,516 3,945 4,428 4,932 5,451 11.7

Canada 71 101 118 133 151 174 198 222 248 276 12.8

Total 2,700 3,010 3,090 3,025 3,288 3,690 4,143 4,650 5,180 5,727 11.7

†At average 2011 exchange rates.Sources: PricewaterhouseCoopers LLP, Recording Industry Association of America, Wilkofsky Gruen Associates

Physical distribution

• One of the more notable developments in 2011 was a sudden slowdown in the decline in physical sales in the United States. After falling at rates averaging more than 20 percent annually from 2007 to 2010, unit sales decreased only 4.4 percent in 2011.

• We believe that most of the people likely to shift from physical to digital music have already done so and that the remaining market contains a larger share of buyers who prefer physical music. The physical market also benefited in 2011 from the sale of $5 CDs at Best Buy and Walmart, which provided a boost for unit sales.

• We expect unit sales in the United States to fall at mid-single-digit rates that will average 6.4 percent compounded annually to 184 million in 2016 from 256 million in 2011.

• Unit sales in Canada fell 7.4 percent in 2011, a slower decline compared with the 12.9 percent decrease in 2010. We also expect declines to continue at single-digit rates averaging 8.5 percent compounded annually.

• Overall unit sales in North America will decline from 281 million in 2011 to 200 million in 2016, a 6.6 percent decrease compounded annually.

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Music | North America 271

• We project that spending on physical music in the United States will fall at an 8.0 percent compound annual rate to $2.2 billion in 2016 from $3.4 billion in 2011. In Canada, physical distribution will drop from $347 million in 2011 to $215 million in 2016, a 9.1 percent decrease compounded annually.

• The overall North American market will total $2.4 billion in 2016 from $3.7 billion in 2011, an 8.1 percent decline on a compound annual basis.

Physical recorded music market† (US$ millions)

North America 2007 2008 2009 2010 2011p 2012 2013 2014 2015 20162012–16

CAGR

United States 7,986 5,758 4,552 3,661 3,379 3,075 2,811 2,588 2,393 2,233 –8.0

Canada 588 499 438 389 347 312 283 257 236 215 –9.1

Total 8,574 6,257 4,990 4,050 3,726 3,387 3,094 2,845 2,629 2,448 –8.1


Total recorded music

• Digital spending nearly reached physical spending in the United States in 2011; in 2012, digital spending will become the larger component of the recorded music market. Total spending on recorded music in the United States will increase at a 3.4 percent compound annual rate to $7.7 billion in 2016 from $6.5 billion in 2011.

• In Canada, digital spending constituted 30 percent of the recorded music market in 2011, and we expect it will not

overtake physical spending until 2015. Total spending on recorded music will continue to decline through 2014 before edging up in 2015–16. For the forecast period as a whole, recorded music spending in Canada will fall at a 0.3 percent compound annual rate to $491 million in 2016 from $498 million in 2011.

• The overall recorded music market in North America will increase from $7 billion in 2011 to $8.2 billion in 2016, a 3.1 percent gain compounded annually.

Recorded music market by country† (US$ millions)

North America 2007 2008 2009 2010 2011p 2012 2013 2014 2015 20162012–16

CAGR

United States 10,615 8,667 7,524 6,553 6,516 6,591 6,756 7,016 7,325 7,684 3.4

Canada 659 600 556 522 498 486 481 479 484 491 –0.3

Total 11,274 9,267 8,080 7,075 7,014 7,077 7,237 7,495 7,809 8,175 3.1


For physical recorded music unit sales data, visit www.pwc.com/outlook

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Concerts and music festivals• After falling by 8.8 percent in 2010, the concert and music

festival market rebounded in 2011 with a 6.5 percent gain.

• U2 was the leading concert tour in North America in 2011, grossing $156 million. Taylor Swift, Kenny Chesney, Lady Gaga, Bon Jovi, and Elton John also had successful 2011 tours in North America.

• The market benefited in 2011 from fewer concert tours that were better promoted. Average attendance was more than 20 percent higher, and average grosses were up more than 30 percent.

• Music festivals also thrived in 2011, including Coachella, Bonnaroo, and Lollapalooza. Smaller festivals such as Rock on the Range and the Hangout Music Festival also did very well in 2011. Music festivals represent a less-expensive alternative for live music than concert tours do, and they provide a variety of performers. We expect festivals to be significant drivers of the overall market during the next five years.

• A number of high-profile tours in 2012—including the Beach Boys, Fleetwood Mac, Madonna, Bruce Springsteen, and the Rolling Stones—are being reflected in early sales growth.

• The market should also benefit from new and renovated venues. Among the new venues opening in 2012 are the Barclays Center in Brooklyn, New York, with a capacity of 19,000; LIVESTRONG Sporting Park in Kansas City, Kansas, with a capacity of 25,000; and the Ford Center in Evansville, Indiana, with a capacity of 11,000. Chesapeake Energy Arena in Oklahoma City with a capacity of 18,000 is one of the largest renovated venues.

• Artists are relying more on concerts than in the past, with the physical market having declined. Labels and artists are entering into 360 deals wherein they jointly participate in concert and recorded music revenues. The deals help cross-promote the recorded music market and the live performance market.

• Social media also are playing growing roles in concerts. Tours are marketing on Facebook and other sites, and social media activity generates interest in tours.

• A generally improving economy should also help the live-music market, which we expect will expand at a 6.9 percent compound annual rate to $13.3 billion in 2016 from $9.5 billion in 2011.

• The United States will rise from $8.7 billion in 2011 to $12.2 billion in 2016, a 7.0 percent compound annual increase, while Canada will average 6.4 percent com-pounded annually from $834 million in 2011 to $1.1 billion in 2016.

Concert and music festival market† (US$ millions)

North America 2007 2008 2009 2010 2011p 2012 2013 2014 2015 20162012–16

CAGR

United States 7,760 8,240 8,960 8,150 8,680 9,280 9,920 10,600 11,360 12,160 7.0

Canada 743 784 839 784 834 890 946 1,006 1,072 1,138 6.4

Total 8,503 9,024 9,799 8,934 9,514 10,170 10,866 11,606 12,432 13,298 6.9


Export your own data selections to Excel and PDF. Visit the online Outlook at www.pwc.com/outlook

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Music | EMEA 273

The outlook in brief• New streaming services and the adoption of graduated-

response antipiracy laws will fuel digital download spending.

• Physical declines will moderate as the remaining market increasingly consists of people who prefer physical music.

• Music festivals will boost spending on live music.

Overview• Spending on recorded music fell 4.3 percent in 2011,

less than half the 8.7 percent decrease in 2010. We expect spending to decline for an additional two years and then record low-single-digit increases as gains in digital distribution begin to offset moderating declines in physical distribution.

• Physical distribution will decline at a 7.2 percent com-pound annual rate, falling to $4.4 billion in 2016 from $6.4 billion in 2011.

• Digital distribution will grow at a 15.5 percent compound annual rate from $1.9 billion in 2011 to $3.9 billion in 2016, constituting 47 percent of total recorded music spending in 2016 compared with 23 percent in 2011.

• Increases during 2014–16 will offset declines during the next two years, leaving the recorded music market virtually flat at $8.4 billion from $8.3 billion in 2011.

• The concert and music festival market will grow at a 4.8 percent compound annual rate from $12.7 billion in 2011 to $16.1 billion in 2016.

• The overall music market will reach $24.4 billion in 2016 from $21.1 billion in 2011, a 3.0 percent increase compounded annually.


EMEA 2007 2008 2009 2010 2011p 2012 2013 2014 2015

2016

Recorded music


Digital distribution 749 1,069 1,355 1,589 1,901 2,240 2,639 3,051 3,471 3,909



Total 23,544 22,698 22,407 20,925 21,062 21,441 22,018 22,734 23,527 24,409



EMEA 2007 2008 2009 2010 2011p 2012 2013 2014 2015 20162012–16

CAGR

Recorded music


Digital distribution 41.6 42.7 26.8 17.3 19.6 17.8 17.8 15.6 13.8 12.6 15.5

Total recorded music –11.3 –7.0 –5.4 –8.7 –4.3 –2.8 –0.8 0.4 1.2 2.2 0.0

Concerts and music festivals 3.7 –0.7 2.0 –5.0 4.2 4.8 4.8 4.9 4.8 4.6 4.8

Total –3.8 –3.6 –1.3 –6.6 0.7 1.8 2.7 3.3 3.5 3.7 3.0


Europe, Middle East, Africa (EMEA)

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• The United Kingdom and Germany have the largest markets in the region, at $4.3 billion and $4.1 billion, respectively, in 2011, followed by France at $2.2 billion. Those three countries represented 50 percent of total spending in EMEA.

• The UK decreased 1.0 percent in 2011 after falling 7.8 percent in 2010. A double-digit decline in physical spending offset a 15.2 percent increase in digital spending, leading to an overall 5.8 percent decrease in recorded music. A 3.0 percent gain in concert and music festival spending limited the overall decline. We expect digital spending to overtake physical spending in 2015, while an expanding live music market will generate low-single-digit gains beginning in 2012. Overall music spending in the UK will rise to $4.9 billion in 2016, a 2.7 percent compound annual increase from 2011.

• Germany rose 2.2 percent in 2011, the largest gain in Western Europe. Recorded music spending rebounded with a 0.9 percent advance, as a 28.9 percent increase in digital spending offset a 3.5 percent drop in physical spending, which was less than half the 8.4 percent decline in physical spending in 2010. Growth was bolstered by a 3.6 percent increase in concert and music festival spending. We look for ongoing low-single-digit gains in recorded music that will be augmented by a 4.1 percent compound annual increase in live music. Germany will expand at a 2.7 percent compound annual rate to $4.7 billion in 2016.

• In France, spending dropped 1.4 percent as a 4.0 percent increase in concerts and music festivals was offset by a 6.4 percent decrease in recorded music. France’s physical market continued to fall by double digits in 2011, while digital spending rose 26.2 percent. We expect overall recorded music spending to decline through 2014, stabilize in 2015, and edge up 1.4 percent in 2016, for an overall 1.5 percent decline on a compound annual basis. That decrease will be offset by a 4.5 percent compound annual gain in live music, leading to an overall 1.7 percent increase compounded annually to $2.3 billion in 2016.

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EMEA 2007 2008 2009 2010 2011p 2012 2013 2014 2015 20162012–16

CAGR

Western Europe

Austria 598 579 586 538 544 554 566 576 589 603 2.1

Belgium 566 554 562 528 534 544 555 568 583 599 2.3

Denmark 492 498 506 478 484 492 504 519 535 554 2.7

Finland 235 234 229 217 219 223 229 235 244 252 2.8

France 2,710 2,431 2,350 2,183 2,152 2,157 2,177 2,219 2,268 2,344 1.7

Germany 5,011 4,686 4,299 3,992 4,080 4,174 4,271 4,397 4,514 4,654 2.7

Greece 309 305 293 263 251 241 237 237 239 247 –0.3

Ireland 313 303 295 274 266 260 259 262 266 271 0.4

Italy 1,242 1,156 1,094 1,056 1,076 1,106 1,146 1,192 1,241 1,291 3.7

Netherlands 1,132 1,079 1,078 968 953 954 980 1,020 1,066 1,114 3.2

Norway 668 646 656 622 632 645 663 682 704 726 2.8

Portugal 249 244 244 226 224 224 230 239 249 259 2.9

Spain 987 965 920 823 818 827 841 867 898 931 2.6

Sweden 725 731 765 744 758 776 796 822 851 880 3.0

Switzerland 1,047 1,045 1,050 1,015 1,033 1,060 1,093 1,127 1,167 1,209 3.2

United Kingdom 4,680 4,581 4,724 4,356 4,314 4,358 4,466 4,595 4,747 4,940 2.7

Western Europe total 20,964 20,037 19,651 18,283 18,338 18,595 19,013 19,557 20,161 20,874 2.6

Central and Eastern Europe

Czech Republic 81 75 73 62 61 61 62 62 64 66 1.6

Hungary 108 109 108 101 102 103 106 108 112 116 2.6

Poland 362 380 378 353 355 360 367 376 386 399 2.4

Romania 39 37 31 13 14 14 14 15 16 17 4.0

Russia 1,161 1,238 1,375 1,363 1,445 1,555 1,690 1,829 1,973 2,087 7.6

Turkey 297 298 295 277 283 290 298 308 318 330 3.1

Central and Eastern Europe total 2,048 2,137 2,260 2,169 2,260 2,383 2,537 2,698 2,869 3,015 5.9

Middle East/Africa

Israel 73 73 69 65 64 65 65 66 68 70 1.8

Middle East/North Africa (MENA)‡ 116 113 109 102 101 102 106 112 120 129 5.0

South Africa 343 338 318 306 299 296 297 301 309 321 1.4

Middle East/ Africa total 532 524 496 473 464 463 468 479 497 520 2.3

EMEA total 23,544 22,698 22,407 20,925 21,062 21,441 22,018 22,734 23,527 24,409 3.0

†At average 2011 exchange rates.‡Comprises Algeria, Bahrain, Egypt, Jordan, Kuwait, Lebanon, Libya, Morocco, Oman, Qatar, Saudi Arabia, Syria, and the United Arab Emirates. Sources: PricewaterhouseCoopers LLP, Wilkofsky Gruen Associates

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Recorded music


• Digital distribution rose 19.6 percent in 2011 to $1.9 billion, fueled by a 15.0 percent increase in number of downloads and by an emerging streaming market.

• The market also benefited from the implementation of antipiracy laws. In France, the HADOPI law called for stepped-up expenditures on education combined with warnings and the ultimate threat of sanctions. The number of peer-to-peer file sharers fell 26 percent, and the number of digital downloads rose 27.9 percent in 2011.

• Similar measures were adopted in Sweden and the UK with similar results. In Spain, the Sustainable Economy Act, which went into effect in early 2012, includes a provision requiring Internet service providers to block access to Web sites that contain infringing content. That provision and others will limit unauthorized file sharing while boosting the legitimate digital download market.

• At the same time, streaming services are becoming popular, while album downloads are becoming larger components of digital downloads. That pattern echoes physical music, wherein singles were the dominant format in the 1950s and 1960s; albums overtook them in the 1970s. We expect those developments to lead to slower growth in digital unit downloads. Growth will drop to single-digit levels in 2014–16 and will average 10.1 per-cent compounded annually for the forecast period as a whole, increasing to 1.1 billion in 2016 from 705 million in 2011.

• Streaming services are proving very popular in EMEA. Spotify offers (1) a free service with limited access that is advertiser supported and (2) paid options for online and mobile access. Spotify had more than 10 million users and nearly 2 million subscribers in EMEA at year-end 2011. In early 2012, Spotify launched a service in Germany. In the UK, Spotify partnered with Virgin Media to provide content for that market.

• Rara in 2011 launched in France, Germany, Spain, and the UK. The service was offered on Hewlett-Packard PCs shipped in Europe and offers 10 million tracks for around $5 per month online and around $10 per month through mobile devices.

• Deezer and Orange formed partnerships in France and the UK to bundle Deezer’s music service in Orange’s mobile packages.

• WiMP offers a subscription service in Norway, Sweden, Denmark, and Portugal and has nearly 400,000 subscribers. WiMP also is launching in Germany, Ireland, Belgium, and the Netherlands in 2012.

• There are numerous streaming services from wireless carriers throughout the region that are expanding the market.

• Labels and artists are entering into full-service or 360 deals that incorporate touring and music sales in a single package. Fan club subscriptions, merchandise, and digital music can be purchased through label Web sites, providing an incremental lift for the digital market.

• Social media sites also help stimulate interest in artists through discussions of recent releases, music videos, and other artist activities.

• Growing penetration by tablets and smartphones is also expanding the market, as these devices are popular platforms for entertainment.

• We project spending on digital music to increase at a 15.5 percent compound annual rate during the next five years to $3.9 billion in 2016.


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EMEA 2007 2008 2009 2010 2011p 2012 2013 2014 2015 20162012–16

CAGR

Western Europe

Austria 14 15 22 29 36 43 49 53 57 61 11.1

Belgium 11 14 18 22 26 32 38 43 49 54 15.7

Denmark 18 33 43 52 62 71 80 90 99 108 11.7

Finland 6 7 11 15 18 21 24 26 29 32 12.2

France 38 58 85 122 154 188 230 271 313 355 18.2

Germany 122 200 239 284 366 452 550 661 772 890 19.4

Greece 3 6 8 10 11 13 14 17 19 24 16.9

Ireland 6 8 10 11 13 14 17 21 25 29 17.4

Italy 38 38 47 53 63 82 109 134 161 188 24.4

Netherlands 22 24 28 33 43 53 64 77 90 103 19.1

Norway 14 20 30 39 44 49 55 62 70 77 11.8

Portugal 6 8 11 13 14 15 18 22 26 31 17.2

Spain 38 40 45 54 64 70 78 88 97 106 10.6

Sweden 8 16 31 37 45 55 64 74 85 96 16.4

Switzerland 65 87 108 124 143 164 186 209 231 254 12.2

United Kingdom 247 375 451 508 585 669 770 866 962 1,059 12.6

Western Europe total 656 949 1,187 1,406 1,687 1,991 2,346 2,714 3,085 3,467 15.5


Czech Republic 3 2 1 1 2 2 3 3 4 5 20.1

Hungary 6 9 10 11 12 13 15 16 18 20 10.8

Poland 5 7 9 10 12 14 17 19 21 24 14.9

Romania ‡ 1 1 1 2 2 3 4 5 6 24.6

Russia 33 38 75 78 87 99 113 128 145 164 13.5

Turkey 17 24 27 30 36 42 48 54 60 66 12.9

Central and Eastern Europe total 64 81 123 131 151 172 199 224 253 285 13.5

Middle East/Africa

Israel 7 10 11 12 14 16 18 21 23 26 13.2

Middle East/North Africa (MENA)†† 12 15 17 19 22 26 31 37 44 52 18.8

South Africa 10 14 17 21 27 35 45 55 66 79 24.0


EMEA total 749 1,069 1,355 1,589 1,901 2,240 2,639 3,051 3,471 3,909 15.5

†At average 2011 exchange rates.‡Less than US$500,000.††Comprises Algeria, Bahrain, Egypt, Jordan, Kuwait, Lebanon, Libya, Morocco, Oman, Qatar, Saudi Arabia, Syria, and the United Arab Emirates.Sources: PricewaterhouseCoopers LLP, Wilkofsky Gruen Associates

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• Physical unit sales fell 9.4 percent in 2011, and spending declined 9.6 percent, continuing the ongoing erosion of the physical market.

• Piracy and the migration of legitimate sales from physical to digital are shrinking the physical market. The decline in physical spending led to store closings that are exacer-bating the problem. In the UK, for example, HMV is the only remaining national chain, and it generates more than a third of total physical spending in that country.

• At the same time, we believe there is a core market for physical recorded music played on sophisticated sound systems. As that core level of activity is approached, declines in physical spending will moderate. We have seen this in the United States in 2011, and there was a smaller decline in EMEA in 2011 as well.

• We expect declines to further moderate, with decreases averaging 6.2 percent compounded annually.

• Spending on physical music will fall at a 7.2 percent com-pound annual rate to $4.4 billion in 2016 from $6.4 billion in 2011.


• Total spending on recorded music will decline during the next two years and then begin to expand in 2014, edging up to $8.4 billion by 2016 from $8.3 billion in 2011.

Concerts and music festivals• The concert and music festival market rose 4.2 percent

in 2011, partially rebounding from a 5.0 percent decline in 2010. The international touring market improved following a disappointing year in 2010, when a number of concerts were canceled.

• The O2 Arena in London was the top-grossing venue in the world in 2011 for the third consecutive year. Glee Live, Usher, Kylie Minogue, Justin Bieber, Lady Gaga, and Roger Waters were among the leading acts playing at O2 in 2011.

• For EMEA as a whole, Take That, Justin Bieber, Lady Gaga, Usher, Roger Waters, Michael Bublé, and Taylor Swift were among the tours that stimulated the rebound in 2011.

• Take That was the biggest tour in UK history and the second-largest tour worldwide in 2011, behind U2, with more than $220 million, $185 million of which was generated in the UK and Ireland.

• The festival market was mixed in 2011. Poor weather hurt spending in the UK, and several festivals closed, including the Truck Festival, Vintage at Goodwood, and Northern Lights. At the same time, other festivals sold out, including Glastonbury, V Festival, Bestival, Creamfields, Secret Garden Party, and End of the Road.

• Weak economic conditions also hurt the festival market in some countries in 2011.

• We look for somewhat stronger growth in 2012, fueled by a strong roster of international tours. The 2012 Olympics in the UK will attract visitors, which should provide a boost for the festival market.

• Over the longer run, popular local festivals will sustain growth, as will a modestly improving economy.

• We project spending to rise at a 4.8 percent compound annual rate to $16.1 billion in 2016 from $12.7 billion in 2011.


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EMEA 2007 2008 2009 2010 2011p 2012 2013 2014 2015 20162012–16

CAGR

Western Europe

Austria 250 223 202 182 167 153 141 129 120 111 –7.8

Belgium 235 213 203 186 174 163 153 145 138 132 –5.4

Denmark 189 171 155 136 121 108 97 88 80 75 –9.1

Finland 100 93 79 70 63 57 53 50 49 47 –5.7

France 1,636 1,309 1,159 1,011 906 821 751 696 654 626 –7.1

Germany 2,176 2,058 1,952 1,788 1,725 1,642 1,558 1,482 1,405 1,336 –5.0

Greece 146 132 111 93 77 64 56 49 43 39 –12.7

Ireland 143 125 111 96 82 71 61 53 46 40 –13.4

Italy 508 395 296 287 269 252 237 223 210 199 –5.9

Netherlands 391 362 339 278 228 198 179 164 152 141 –9.2

Norway 239 197 180 161 146 132 121 111 103 96 –8.0

Portugal 90 79 70 60 50 43 39 36 35 33 –8.0

Spain 358 313 249 178 142 124 109 97 89 81 –10.6

Sweden 224 206 210 202 193 185 177 170 163 156 –4.2

Switzerland 294 259 231 203 184 169 157 145 135 126 –7.3

United Kingdom 1,987 1,800 1,724 1,474 1,283 1,123 1,010 922 850 802 –9.0

Western Europe total 8,966 7,935 7,271 6,405 5,810 5,305 4,899 4,560 4,272 4,040 –7.0


Czech Republic 37 31 28 20 16 14 12 10 9 8 –12.9

Hungary 42 38 33 29 26 23 21 19 18 16 –9.3

Poland 142 153 143 130 120 112 105 100 95 91 –5.4

Romania 31 27 21 4 3 3 2 1 1 1 –19.7

Russia 412 400 300 185 148 126 111 99 89 82 –11.1

Turkey 113 104 92 80 73 67 61 57 52 49 –7.7

Central and Eastern Europe total 777 753 617 448 386 345 312 286 264 247 –8.5

Middle East/Africa

Israel 46 42 37 33 30 28 25 23 22 20 –7.8

Middle East/North Africa (MENA)‡ 75 67 60 53 48 44 41 39 38 37 –5.1

South Africa 243 235 217 195 174 155 138 124 113 104 –9.8

Middle East/ Africa total 364 344 314 281 252 227 204 186 173 161 –8.6

EMEA total 10,107 9,032 8,202 7,134 6,448 5,877 5,415 5,032 4,709 4,448 –7.2


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EMEA 2007 2008 2009 2010 2011p 2012 2013 2014 2015 20162012–16

CAGR

Western Europe

Austria 264 238 224 211 203 196 190 182 177 172 –3.3

Belgium 246 227 221 208 200 195 191 188 187 186 –1.4

Denmark 207 204 198 188 183 179 177 178 179 183 0.0

Finland 106 100 90 85 81 78 77 76 78 79 –0.5

France 1,674 1,367 1,244 1,133 1,060 1,009 981 967 967 981 –1.5

Germany 2,298 2,258 2,191 2,072 2,091 2,094 2,108 2,143 2,177 2,226 1.3

Greece 149 138 119 103 88 77 70 66 62 63 –6.5

Ireland 149 133 121 107 95 85 78 74 71 69 –6.2

Italy 546 433 343 340 332 334 346 357 371 387 3.1

Netherlands 413 386 367 311 271 251 243 241 242 244 –2.1

Norway 253 217 210 200 190 181 176 173 173 173 –1.9

Portugal 96 87 81 73 64 58 57 58 61 64 0.0

Spain 396 353 294 232 206 194 187 185 186 187 –1.9

Sweden 232 222 241 239 238 240 241 244 248 252 1.1

Switzerland 359 346 339 327 327 333 343 354 366 380 3.0

United Kingdom 2,234 2,175 2,175 1,982 1,868 1,792 1,780 1,788 1,812 1,861 –0.1



Czech Republic 40 33 29 21 18 16 15 13 13 13 –6.3

Hungary 48 47 43 40 38 36 36 35 36 36 –1.1

Poland 147 160 152 140 132 126 122 119 116 115 –2.7

Romania 31 28 22 5 5 5 5 5 6 7 7.0

Russia 445 438 375 263 235 225 224 227 234 246 0.9

Turkey 130 128 119 110 109 109 109 111 112 115 1.1

Central and Eastern Europe total 841 834 740 579 537 517 511 510 517 532 –0.2

Middle East/Africa

Israel 53 52 48 45 44 44 43 44 45 46 0.9


South Africa 253 249 234 216 201 190 183 179 179 183 –1.9


EMEA total 10,856 10,101 9,557 8,723 8,349 8,117 8,054 8,083 8,180 8,357 0.0


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EMEA 2007 2008 2009 2010 2011p 2012 2013 2014 2015 20162012–16

CAGR

Western Europe

Austria 334 341 362 327 341 358 376 394 412 431 4.8

Belgium 320 327 341 320 334 349 364 380 396 413 4.3

Denmark 285 294 308 290 301 313 327 341 356 371 4.3

Finland 129 134 139 132 138 145 152 159 166 173 4.6

France 1,036 1,064 1,106 1,050 1,092 1,148 1,196 1,252 1,301 1,363 4.5

Germany 2,713 2,428 2,108 1,920 1,989 2,080 2,163 2,254 2,337 2,428 4.1

Greece 160 167 174 160 163 164 167 171 177 184 2.5

Ireland 164 170 174 167 171 175 181 188 195 202 3.4

Italy 696 723 751 716 744 772 800 835 870 904 4.0

Netherlands 719 693 711 657 682 703 737 779 824 870 5.0

Norway 415 429 446 422 442 464 487 509 531 553 4.6

Portugal 153 157 163 153 160 166 173 181 188 195 4.0

Spain 591 612 626 591 612 633 654 682 712 744 4.0

Sweden 493 509 524 505 520 536 555 578 603 628 3.8

Switzerland 688 699 711 688 706 727 750 773 801 829 3.3

United Kingdom 2,446 2,406 2,549 2,374 2,446 2,566 2,686 2,807 2,935 3,079 4.7



Czech Republic 41 42 44 41 43 45 47 49 51 53 4.3

Hungary 60 62 65 61 64 67 70 73 76 80 4.6

Poland 215 220 226 213 223 234 245 257 270 284 5.0

Romania 8 9 9 8 9 9 9 10 10 10 2.1

Russia 716 800 1,000 1,100 1,210 1,330 1,466 1,602 1,739 1,841 8.8

Turkey 167 170 176 167 174 181 189 197 206 215 4.3

Central and Eastern Europe total 1,207 1,303 1,520 1,590 1,723 1,866 2,026 2,188 2,352 2,483 7.6

Middle East/Africa

Israel 20 21 21 20 20 21 22 22 23 24 3.7


South Africa 90 89 84 90 98 106 114 122 130 138 7.1


EMEA total 12,688 12,597 12,850 12,202 12,713 13,324 13,964 14,651 15,347 16,052 4.8


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Asia Pacific

The outlook in brief• New streaming services and antipiracy initiatives will

drive spending on digital music.

• Growth in licensed services will continue to cut into physical distribution.

• New festivals and international players’ entrance will boost spending on concerts and music festivals.

Overview• Recorded music spending fell by 1.6 percent in 2011, a

relative improvement compared with annual decreases averaging more than 7 percent during the prior two years.

• We expect declines for an additional two years followed by modest gains during 2014–16. For the forecast period as a whole, spending on recorded music will rise from $7.7 billion in 2011 to $8 billion in 2016, a 0.9 percent compound annual increase.

• Physical distribution will decline at a 5.2 percent com-pound annual rate to $4.1 billion in 2016 from $5.3 billion in 2011.

• Digital distribution will rise to $4 billion in 2016, a 10.9 percent increase on a compound annual basis from $2.4 billion in 2011.

• Spending on concerts and music festivals will increase from $3.4 billion in 2011 to $4.3 billion in 2016, a 5.0 percent gain on a compound annual basis.

• Overall music spending will expand at a 2.2 percent compound annual rate to $12.3 billion in 2016 from $11 billion in 2011.


Asia Pacific

2007 2008 2009 2010 2011p 2012 2013 2014 2015 2016

Recorded music





Total 12,136 11,972 11,605 11,096 11,037 11,138 11,303 11,563 11,911 12,316



Asia Pacific 2007 2008 2009 2010 2011p 2012 2013 2014 2015 20162012–16

CAGR

Recorded music



Total recorded music –0.2 –3.2 –6.9 –7.4 –1.6 –0.7 –0.1 0.8 1.9 2.6 0.9

Concerts and music festivals 5.3 5.0 8.8 3.7 2.1 4.6 4.9 5.3 5.2 4.9 5.0

Total 1.0 –1.4 –3.1 –4.4 –0.5 0.9 1.5 2.3 3.0 3.4 2.2


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Music | Asia Pacific 283

• Japan is the dominant territory, at $7.3 billion, in 2011, 66 percent of total recorded music spending in Asia Pacific. Trends in Japan differed from those in other countries in 2011. Digital recorded music fell 16.3 percent in 2011 while growing at double-digit rates in every other country except Taiwan, where the increase was 7.1 percent. Meanwhile, spending on physical recorded music, which fell at double-digit or high-single-digit rates in every other country, edged down only 0.6 percent in Japan. In the concert and music festival market, Japan fell 3.2 percent, while every other country except Pakistan expanded. Overall spending fell 4.0 percent in 2011. It appears that the earthquake and tsunami put consumers in a mind-set of self-control that translated into maintaining traditional spending patterns that kept physical spending relatively steady while leading to a decline in digital spending and a decrease in attendance at live music events. We expect Japan to return in 2012 to a spending pattern that will be more charac-teristic of the overall market. Spending will decline at an 0.8 percent compound annual rate to $7 billion in 2016.

• Australia is the second-largest country and the only other market above $1 billion in 2011. Spending rose 4.5 percent in 2011 as growth in concerts and music festivals offset a modest decline in recorded music. In recorded music, a 34.2 percent jump in digital spending nearly offset a 13.1 percent decline in physical spending. Australia’s digital market will overtake its physical market in 2013, which will lead to mid-single-digit gains in recorded music spending during the latter part of the forecast period. Ongoing growth in concerts and music festivals will lead to an overall 5.0 percent compound annual increase to $1.5 billion in 2016 from $1.2 billion in 2011.

• South Korea, the third-largest market, at $857 million, rose 12.3 percent in 2011. The recorded music market is now 92 percent digital as piracy has long since decimated the physical market, while a hugely successful antipiracy initiative has propelled digital spending. South Korea will be one of the few countries where recorded music will grow faster than concerts and music festivals. Spending will increase at a 10.2 percent compound annual rate to $1.4 billion in 2016.

• In the People’s Republic of China (PRC), piracy is estimated at 99 percent, and total legitimate spending was only $348 million in 2011. Digital accounted for 81 percent of total recorded music spending in 2011, the second-highest share in the world, behind South Korea. Digital spending does not include fees paid to mobile telephone providers for subscription packages, music clubs, and other services that facilitate the downloading of music, ringtones, and other mobile music. Only those outlays directly related to actual music purchases are included. Overall spending rose 8.4 percent in 2011, the result of a 10.3 percent increase in recorded music and 6.1 percent growth in concerts and music festivals. Growth during the next five years will average 9.2 percent compounded annually to $541 million in 2016.

• India, next largest, at $255 million, was the fastest-growing country in 2011, with a 26.9 percent increase. The digital market, which represented 72 percent of recorded music spending, rose 58.3 percent, and concerts and music festivals jumped 22.9 percent. India will continue to be the fastest-growing country, with a 14.7 percent compound annual increase to $506 million in 2016.

• Thailand, at $228 million in 2011, was the only other country in Asia Pacific above $200 million. Spending rose 1.8 percent, boosted by a 5.1 percent increase in concerts and music festivals that offset an 0.8 percent decline in recorded music. In recorded music, a 12.5 percent decline in physical spending offset an 11.3 percent increase in digital spending. We expect recorded music spending to begin to increase in 2013, and continued growth in concerts and music festivals will lead to a 4.1 percent increase in overall spending to $279 million in 2016.

Filter digital and nondigital spending data. Visit the online Outlook at www.pwc.com/outlook

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Asia Pacific 2007 2008 2009 2010 2011p 2012 2013 2014 2015 20162012–16

CAGR

Australia 1,054 1,027 1,177 1,139 1,190 1,243 1,301 1,368 1,440 1,516 5.0

China 272 285 301 321 348 380 415 456 498 541 9.2

Hong Kong 155 157 157 158 163 168 174 182 191 199 4.1

India 168 148 158 201 255 295 344 390 447 506 14.7

Indonesia 164 168 177 183 193 204 216 227 239 251 5.4

Japan 9,058 8,889 8,222 7,636 7,327 7,161 7,035 6,976 6,979 7,045 –0.8

Malaysia 57 57 56 55 56 59 60 63 67 69 4.3

New Zealand 143 142 148 142 144 153 159 168 176 184 5.0

Pakistan 27 28 28 28 28 29 30 31 33 33 3.3

Philippines 51 52 53 54 55 58 61 63 66 68 4.3

Singapore 91 95 95 93 95 101 107 113 121 128 6.1

South Korea 553 593 698 763 857 957 1,062 1,173 1,288 1,394 10.2

Taiwan 126 113 107 99 98 96 96 99 100 103 1.0

Thailand 217 218 228 224 228 234 243 254 266 279 4.1

Vietnam NA NA NA NA NA NA NA NA NA NA —

Total 12,136 11,972 11,605 11,096 11,037 11,138 11,303 11,563 11,911 12,316 2.2


Recorded music


• Digital spending rose only 0.6 percent in 2011, as the 16.3 percent decline in Japan nearly offset the 25.8 per-cent increase in the other countries. We expect the Japan anomaly to reverse in 2012 and project overall digital spending to increase by 15.3 percent.

• The digital market in Asia Pacific is beginning to migrate from downloads to streaming services. Spotify, Deezer, and Rdio entered Australia in 2011. Spotify has a limited-access advertiser-supported service and an unlimited-access subscription-based service. Deezer is a subscription service, and Rdio offers an advertiser-supported service with time limits on usage.

• KKBOX offers streaming services in Hong Kong and Taiwan; MelOn and Mnet are popular streaming services in South Korea. Omusic was introduced in Taiwan in 2011.

• In the PRC, Baidu entered into a licensing arrangement with OneStop China—a joint venture between Sony BMI, Warner Music, and Universal—to offer an ad-supported streaming service. Baidu pays the record companies for each download or stream, and the companies share ad revenues.

• The implementation of graduated-response systems has proved successful. In South Korea, 70 percent of infringers stopped their file-sharing activity after the first warning. In New Zealand, a similar system was enacted in 2011, and within the first three months, file sharing fell 16 percent. In India and Malaysia, Internet service providers are blocking access to Web sites that carry infringing content.

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• New streaming services and growing smartphone and tablet penetration will expand the market for digital access.

• We project digital music spending in Asia Pacific to increase at a 10.9 percent compound annual rate to $4 billion in 2016 from $2.4 billion in 2011.

• To some degree, growth in streaming will cut into digital downloads. We project growth in unit downloads to drop to low-single-digit gains by 2015–16 and to average 6.0 percent compounded annually from 1.3 billion in 2011 to 1.7 billion in 2016.


Asia Pacific 2007 2008 2009 2010 2011p 2012 2013 2014 2015 20162012–16

CAGR

Australia 53 75 110 146 196 243 294 346 397 449 18.0

China 75 95 111 132 156 182 209 240 271 302 14.1

Hong Kong 17 23 27 31 37 41 46 51 56 61 10.5

India 15 21 45 96 152 196 239 284 339 395 21.0

Indonesia 33 40 49 57 66 75 83 91 99 107 10.1

Japan 1,231 1,477 1,484 1,403 1,174 1,305 1,380 1,443 1,506 1,568 6.0

Malaysia 7 9 11 13 15 17 19 21 23 25 10.8

New Zealand 5 6 7 11 15 21 25 29 33 37 19.8

Pakistan 3 5 6 6 7 8 9 10 11 12 11.4

Philippines 6 8 10 12 14 16 18 20 22 23 10.4

Singapore 10 15 18 20 23 27 31 35 39 43 13.3

South Korea 144 176 271 339 416 493 574 656 737 809 14.2

Taiwan 12 13 14 14 15 16 17 19 20 22 8.0

Thailand 33 49 56 62 69 75 82 89 95 102 8.1


Total 1,644 2,012 2,219 2,342 2,355 2,715 3,026 3,334 3,648 3,955 10.9



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• With the physical market having nearly disappeared in a number of countries, further declines will necessarily be limited.

• Japan accounted for 56 percent of all physical unit sales in Asia Pacific in 2011 and 86 percent of physical spending. Japan’s physical market has held up relatively well com-pared with many other countries’, and we expect that pattern to continue.

• Overall physical unit sales will fall at a 5.2 percent com-pound annual rate to 352 million in 2016 from 461 million in 2011.

• We project physical spending to fall at a 5.2 percent com-pound annual rate from $5.3 billion in 2011 to $4.1 billion in 2016.


• Total spending on recorded music will decline during the next two years and then expand beginning in 2014, rising to $8 billion in 2016 from $7.7 billion in 2011, a 0.9 percent compound annual increase.


Asia Pacific 2007 2008 2009 2010 2011p 2012 2013 2014 2015 20162012–16

CAGR

Australia 588 516 510 389 338 303 274 248 227 210 –9.1

China 77 62 51 42 36 31 28 26 24 22 –9.4

Hong Kong 64 57 49 43 39 35 32 30 28 26 –7.8

India 139 113 85 70 60 49 41 34 30 27 –14.8

Indonesia 60 54 48 42 38 34 31 28 26 24 –8.8

Japan 6,380 5,901 5,163 4,626 4,597 4,266 4,015 3,827 3,701 3,639 –4.6

Malaysia 28 25 21 17 15 14 12 11 11 10 –7.8

New Zealand 65 58 56 40 31 27 22 19 16 13 –16.0

Pakistan 13 11 10 9 8 7 7 6 6 5 –9.0

Philippines 23 21 19 17 15 14 13 12 11 10 –7.8

Singapore 40 36 31 26 23 21 19 18 18 17 –5.9

South Korea 70 55 47 40 34 30 27 24 22 20 –10.1

Taiwan 73 57 48 40 35 30 26 24 21 19 –11.5

Thailand 95 77 75 64 56 49 44 40 37 34 –9.5


Total 7,715 7,043 6,213 5,465 5,325 4,910 4,591 4,347 4,178 4,076 –5.2



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Asia Pacific 2007 2008 2009 2010 2011p 2012 2013 2014 2015 20162012–16

CAGR

Australia 641 591 620 535 534 546 568 594 624 659 4.3

China 152 157 162 174 192 213 237 266 295 324 11.0

Hong Kong 81 80 76 74 76 76 78 81 84 87 2.7

India 154 134 130 166 212 245 280 318 369 422 14.8

Indonesia 93 94 97 99 104 109 114 119 125 131 4.7

Japan 7,611 7,378 6,647 6,029 5,771 5,571 5,395 5,270 5,207 5,207 –2.0

Malaysia 35 34 32 30 30 31 31 32 34 35 3.1

New Zealand 70 64 63 51 46 48 47 48 49 50 1.7

Pakistan 16 16 16 15 15 15 16 16 17 17 2.5

Philippines 29 29 29 29 29 30 31 32 33 33 2.6

Singapore 50 51 49 46 46 48 50 53 57 60 5.5

South Korea 214 231 318 379 450 523 601 680 759 829 13.0

Taiwan 85 70 62 54 50 46 43 43 41 41 –3.9

Thailand 128 126 131 126 125 124 126 129 132 136 1.7


Total 9,359 9,055 8,432 7,807 7,680 7,625 7,617 7,681 7,826 8,031 0.9


Concerts and music festivals• The concert and music festival market rose 2.1 percent in

2011. Excluding Japan, which fell 3.2 percent, spending rose 7.1 percent.

• Australia attracts international tours and also has a thriving local festival market. Rod Laver Arena was the second-largest-grossing venue in the world in 2011, attracting star acts such as Usher, Michael Bublé, the Eagles, Kylie Minogue, and Metallica.

• Bob Dylan played in the PRC in 2011, and Janet Jackson toured in a number of countries in Asia.

• Popular Australian-based festivals are expanding into other countries. Laneway launched festivals in Singapore and will be expanding into Thailand and South Korea in the next few years. Future Entertainment plans to introduce a Future Music Festival in Malaysia. Australian bands also are touring in Asia.

• Live Nation Entertainment, the largest international promoter, is entering Japan in a joint venture with Creativeman to form Live Nation Japan.

• New festivals and more-aggressive promotion should propel the concert and music festival market, which we expect will expand at a 5.0 percent compound annual rate to $4.3 billion in 2016 from $3.4 billion in 2011.

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Asia Pacific 2007 2008 2009 2010 2011p 2012 2013 2014 2015 20162012–16

CAGR

Australia 413 436 557 604 656 697 733 774 816 857 5.5

China 120 128 139 147 156 167 178 190 203 217 6.8

Hong Kong 74 77 81 84 87 92 96 101 107 112 5.2

India 14 14 28 35 43 50 64 72 78 84 14.3

Indonesia 71 74 80 84 89 95 102 108 114 120 6.2

Japan 1,447 1,511 1,575 1,607 1,556 1,590 1,640 1,706 1,772 1,838 3.4

Malaysia 22 23 24 25 26 28 29 31 33 34 5.5

New Zealand 73 78 85 91 98 105 112 120 127 134 6.5

Pakistan 11 12 12 13 13 14 14 15 16 16 4.2

Philippines 22 23 24 25 26 28 30 31 33 35 6.1

Singapore 41 44 46 47 49 53 57 60 64 68 6.8

South Korea 339 362 380 384 407 434 461 493 529 565 6.8

Taiwan 41 43 45 45 48 50 53 56 59 62 5.3

Thailand 89 92 97 98 103 110 117 125 134 143 6.8


Total 2,777 2,917 3,173 3,289 3,357 3,513 3,686 3,882 4,085 4,285 5.0


Drill down through data across segments, components, and territories. Visit the online Outlook at www.pwc.com/outlookFor P

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Music | Latin America 289

The outlook in brief• Broadband growth, rising smartphone and tablet pene-

tration, and new services will drive digital spending.

• Piracy and growth in legitimate digital formats will lead to declines in physical distribution.

• Local festivals will boost the concert and music festival market.

Overview• Spending rose 1.5 percent in 2011 as a 6.0 percent

increase in concerts and festivals offset a 2.2 percent decline in recorded music.

• The recorded music market will turn around in 2013 as gains in digital spending begin to offset ongoing declines in physical spending.

• Overall recorded music spending will rise from $657 mil-lion in 2011 to $711 million in 2016, a 1.6 percent increase on a compound annual basis.

• Physical distribution will decline from $470 million in 2011 to $336 million in 2016, a 6.5 percent decrease compounded annually.

• Digital distribution will reach $375 million in 2016, growing at a 14.9 percent compound annual rate from $187 million in 2011.

• Concerts and music festivals will grow from $602 million in 2011 to $832 million in 2016, a 6.7 percent compound annual increase.

• The overall music market will expand at a 4.2 percent compound annual rate to $1.5 billion in 2016 from $1.3 billion in 2011.


Latin America 2007 2008 2009 2010 2011p 2012 2013 2014 2015

2016

Recorded music

Physical distribution 755 622 569 514 470 436 406 379 357 336

Digital distribution 80 113 135 158 187 219 255 291 332 375

Total recorded music 835 735 704 672 657 655 661 670 689 711

Concerts and music festivals 501 525 559 568 602 643 686 742 773 832

Total 1,336 1,260 1,263 1,240 1,259 1,298 1,347 1,412 1,462 1,543



Latin America 2007 2008 2009 2010 2011p 2012 2013 2014 2015 20162012–16

CAGR

Recorded music



Total recorded music –13.8 –12.0 –4.2 –4.5 –2.2 –0.3 0.9 1.4 2.8 3.2 1.6

Concerts and music festivals 5.3 4.8 6.5 1.6 6.0 6.8 6.7 8.2 4.2 7.6 6.7

Total –7.5 –5.7 0.2 –1.8 1.5 3.1 3.8 4.8 3.5 5.5 4.2


Latin America

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• Mexico and Brazil are the largest markets, at $454 million and $453 million, respectively, in 2011. In Mexico, spend-ing was flat in 2011 as a 5.3 percent decline in recorded music was offset by a 6.3 percent increase in concerts and music festivals.

• Brazil rose 4.6 percent fueled by a 3.4 percent increase in recorded music, the only country in Latin America to register in 2011 a gain in recorded music and a 6.1 percent increase in concerts and music festivals.

• Colombia and Argentina were next, at $155 million and $108 million, respectively, in 2011. Colombia rose 1.3 percent as a 5.7 percent increase in concerts and music festivals offset a 2.4 percent drop in recorded music.

• Argentina recorded the steepest decline of any country in Latin America in 2011, with a 2.7 percent decrease. Recorded music fell 10.0 percent, offsetting a 5.9 percent increase in concerts and music festivals.


Latin America 2007 2008 2009 2010 2011p 2012 2013 2014 2015 20162012–16

CAGR

Argentina 135 127 120 111 108 107 108 109 112 115 1.3

Brazil 457 393 419 433 453 477 501 539 548 587 5.3

Chile 69 69 70 69 68 69 72 73 77 80 3.3

Colombia 150 155 157 153 155 158 162 167 173 179 2.9

Mexico 506 495 476 454 454 466 482 502 528 558 4.2

Venezuela 19 21 21 20 21 21 22 22 24 24 2.7

Total 1,336 1,260 1,263 1,240 1,259 1,298 1,347 1,412 1,462 1,543 4.2


Recorded music


• Digital unit downloads rose 13.6 percent in 2011, and digital spending increased by 18.4 percent.

• Apple’s iTunes, the hugely popular digital download service, launched throughout the region in 2011 following its introduction into Mexico in 2009.

• New streaming service Rara launched in Mexico in 2011, and Sonora is available in Brazil, Colombia, and Argentina.

• Except for Venezuela, a wide array of digital services is now available in each country, which is stimulating the market.

• Broadband penetration is growing rapidly in Latin America, and high-speed wireless networks are being rolled out. Smartphones and tablets also are penetrating the market, which is expanding the potential market for digital music and attracting new services.

• We project digital unit downloads to increase at a 9.3 percent compound annual rate during the next five years from 158 million in 2011 to 248 million in 2016.

• We project spending on digital music to increase to $375 million in 2016, a 14.9 percent compound annual gain from $187 million in 2011.


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Music | Latin America 291


Latin America 2007 2008 2009 2010 2011p 2012 2013 2014 2015 20162012–16

CAGR

Argentina 4 5 6 7 8 9 11 12 14 16 14.9

Brazil 14 26 38 49 63 78 93 108 123 138 17.0

Chile 4 6 7 8 9 10 12 13 15 17 13.6

Colombia 10 13 15 16 18 21 23 26 29 32 12.2

Mexico 47 62 68 77 87 99 113 129 147 167 13.9

Venezuela 1 1 1 1 2 2 3 3 4 5 20.1

Total 80 113 135 158 187 219 255 291 332 375 14.9



• Physical unit sales fell 10.1 percent in 2011. Piracy and competition from legitimate digital services continue to erode the physical market.

• We look for this trend to continue, with unit sales falling at a 7.6 percent compound annual rate to 49 million by 2016 from 73 million in 2011.

• We project spending on physical music to fall at a 6.5 percent compound annual rate to $336 million in 2016 from $470 million in 2011.


• Gains in digital spending will begin to offset declines in physical spending in 2013. Total spending on recorded music will increase at a 1.6 percent compound annual rate to $711 million in 2016 from $657 million in 2011.


Latin America 2007 2008 2009 2010 2011p 2012 2013 2014 2015 20162012–16

CAGR

Argentina 87 76 64 53 46 41 36 33 30 27 –10.1

Brazil 272 187 189 186 180 174 168 162 156 150 –3.6

Chile 37 34 32 29 26 24 23 21 20 19 –6.1

Colombia 77 76 72 67 63 59 56 53 51 49 –4.9

Mexico 272 238 201 169 146 129 115 103 93 85 –10.3

Venezuela 10 11 11 10 9 9 8 7 7 6 –7.8

Total 755 622 569 514 470 436 406 379 357 336 –6.5



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Latin America 2007 2008 2009 2010 2011p 2012 2013 2014 2015 20162012–16

CAGR

Argentina 91 81 70 60 54 50 47 45 44 43 –4.5

Brazil 286 213 227 235 243 252 261 270 279 288 3.5

Chile 41 40 39 37 35 34 35 34 35 36 0.6

Colombia 87 89 87 83 81 80 79 79 80 81 0.0

Mexico 319 300 269 246 233 228 228 232 240 252 1.6

Venezuela 11 12 12 11 11 11 11 10 11 11 0.0

Total 835 735 704 672 657 655 661 670 689 711 1.6


Concerts and music festivals• The concert and music festival market rose 6.0 percent

in 2011 to $602 million.

• The popular Lollapalooza Festivals in the United States also are presences in Brazil and Chile, attracting name acts in 2011 such as Foo Fighters and Arctic Monkeys. In Brazil in 2011, the Rock in Rio festival attracted a daily audience of more than 100,000 to see international and local acts. Rock in Rio will return to Brazil in 2013. Rock festivals in Brazil are being boosted by economic growth.

• We expect that the market in Brazil will benefit in 2014 and 2016 from international visitors for the FIFA World Cup and Summer Olympics, respectively.

• In Latin America there is strong interest in music, and local festivals are doing well.

• An expanding economy should continue to propel this market, which we expect will expand at a 6.7 percent compound annual rate to $832 million in 2016.


Latin America 2007 2008 2009 2010 2011p 2012 2013 2014 2015 20162012–16

CAGR

Argentina 44 46 50 51 54 57 61 64 68 72 5.9

Brazil 171 180 192 198 210 225 240 269 269 299 7.3

Chile 28 29 31 32 33 35 37 39 42 44 5.9

Colombia 63 66 70 70 74 78 83 88 93 98 5.8

Mexico 187 195 207 208 221 238 254 270 288 306 6.7

Venezuela 8 9 9 9 10 10 11 12 13 13 5.4

Total 501 525 559 568 602 643 686 742 773 832 6.7


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