Industry Overview_PwC Outlook 2012

1. www.pwc.com/outlook
Global entertainment
and media outlook
2012–2016
Industry overview
13th annual edition
June 2012

2. Global entertainment
and media outlook
2012–2016
Industry overview
13th annual edition Each year, PwC’s global team of entertainment and media experts
generates unbiased, in-depth forecasts for 13 industry segments.
June 2012
Incorporating data from 4 principal regions comprising 48
countries and areas around the world, Global entertainment and
media outlook: 2012–2016 combines deep knowledge of local
markets with a truly global perspective—a powerful tool for
understanding critical business issues.
To learn more about the challenges and opportunities ahead for the
entertainment and media industry, please visit pwc.com/e&m

3. Global entertainment and media outlook: 2012–2016
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Media Practice: Outlook content must not be excerpted, used, and must not form the majority of
or presented in any portion that would render sourced information.
Deborah Bothun, Principal
it misleading in any manner or that fails to
James DePonte, Partner
provide sufficient context.
Sean DeWinter, Partner
Marcel Fenez, Global Leader, Entertainment & Media
Nick George, Partner
Stefanie Kane, Partner © 2012 PwC. All rights reserved. PwC refers to the PwC network and/or one or more of its member
Alexandra Maclean, Global E&M Marketing Manager firms, each of which is also a separate legal entity. Please see www.pwc.com/structure for further
Radhika Nanda, Global E&M Marketing Executive details. AT-12-0120
Pauline Orchard, Global E&M Marketing Leader
Kenneth Sharkey, Partner Global entertainment and media outlook is a trademark owned by PricewaterhouseCoopers LLP.
Phil Stokes, Partner
ISBN 978-1-931684-27-9
Many other professionals from the PwC
Global entertainment and media outlook: 2012–2016, Industry overview
Entertainment & Media Practice reviewed
and added local expertise to this publication. ISBN 978-1-931684-25-5
Global entertainment and media outlook: 2012–2016
For Wilkofsky Gruen Associates Inc.:
David Wilkofsky, Partner
Arthur Gruen, Partner
Norman D. Eisenberg, Vice President
2 PwC | Global entertainment and media outlook: 2012–2016

4. Contents: Industry overview
Letter from Global Leader, Entertainment & Media . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
PwC Entertainment & Media Practice—country contacts . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Scope and methodology
Scope . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Methodology . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Viewpoint
Preface and economic context . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
The end of the digital beginning:
E&M companies reshape and
retool for life in the new normal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
Summaries by segment and region
Global industry summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
Global market by segment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
Global market by region . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63
Index of tables and charts . . . . . . . . . . . . . . . . . . . . 91
This Industry Overview contains a top-line summary of industry data, along with PwC’s
viewpoint about industry trends. It does not approach the depth or granularity of the
full Outlook content, which provides more than 100,000 data points and in-depth
commentary for the 13 segments and 48 countries and areas covered.
For access to full data sets and commentary, visit the online
Outlook at www.pwc.com/outlook
Industry overview 3

5. Letter from Global Leader, Entertainment & Media
June 2012
To our clients and friends both in and beyond the entertainment and media industry:
Welcome to the 13th annual edition of PwC’s Global entertainment and media outlook, covering the forecast period 2012–2016. Our
forecasts and analyses for this edition focus on 13 major entertainment and media (E&M) industry segments. To reflect the ever-changing
nature of the industry, as well as the continuing growth of digital revenue streams, we continue seeking out new data sources and have
again increased the depth of data across the 48 countries and areas covered in the Outlook. Given those increases in the depth and breadth
of our content, you will now find certain of the data sets in the online Outlook only. I encourage you to get to know the online edition of the
Outlook, which offers significant additional functionality and flexibility for the user of the underlying data and which includes additional
territory-specific content.
During 2011, both advertising spending and, to a lesser extent, consumer/end-user spending grew as overall economic activity and demand
for high-quality content increased. Proliferation in the usage of smart mobile devices has enabled the convenience of consumption of
content anywhere and anytime to become a reality.
In the near term, economic prospects are mixed but should improve and lead to growth in the sector. However, we anticipate that overall
growth in the E&M industry will lag nominal GDP growth due to an ongoing consumption shift to lower-priced digital distribution.
Although rates of growth in China and India show some signs of moderating, those markets—as well as other fast-growing markets in Asia
and Latin America—are the engines of global growth.
The initial uncertainty of digital migration is giving way to a sharper focus on identifying and executing the business models, organizational
structures, and skill sets that will deliver rising future value in the changed environment. Put simply, digital is now established as the new
normal. The relative availability and affordability of fixed and mobile broadband in different markets set the pace of consumer adoption of
digital. And as a consequence, some markets will continue to see differing growth patterns.
Understanding how consumer behavior is changing and interpreting the mass of data that is being gathered about consumer preferences
are becoming core skills and are providing the basis for monetization either directly or through collaboration and partnering with others.
This is just one example of the areas where sources of value are changing.
All of us at PwC continue to stay on top of trends and developments that may impact your business now and in the future, and we look
forward to further sharing our thoughts with you. We appreciate your feedback and ask that you in turn continue telling us what we can do
to make the Outlook more useful to you. For additional clarification on any matters included in the Outlook or if we can be of service to your
business in any way, either contact one of the PwC E&M professionals listed on pages 5 and 6 or visit our Web site (www.pwc.com/e&m) for
details of the contact in your territory.
Finally, we thank you for your support and wish you an exciting and rewarding year ahead.
Sincerely,
Marcel Fenez
Global Leader
Entertainment & Media
4 PwC | Global entertainment and media outlook: 2012–2016

6. PwC Entertainment & Media Practice—country contacts
Global Marcel Fenez marcel.fenez@hk.pwc.com
North America
Canada Tracey Jennings tracey.l.jennings@ca.pwc.com
United States Kenneth Sharkey kenneth.j.sharkey@us.pwc.com
EMEA
Western Europe
Austria Bernd Hoffman bernd.hoffman@at.pwc.com
Belgium Eddy Dams eddy.dams@be.pwc.com
Denmark John Gabriel Sørensen john.gabriel.sorensen@dk.pwc.com
Finland Harri Valkonen harri.valkonen@fi.pwc.com
France Matthieu Aubusson de Cavarlay matthieu.aubusson@fr.pwc.com
Germany Werner Ballhaus werner.ballhaus@de.pwc.com
Greece Dinos Michalatos dinos.michalatos@gr.pwc.com
Ireland Paul O’Connor paul.w.oconnor@ie.pwc.com
Italy Andrea Samaja andrea.samaja@it.pwc.com
Netherlands Ennel van Eeden ennel.van.eeden@nl.pwc.com
Norway Eivind Nilsen eivind.nilsen@no.pwc.com
Portugal José Vitorino jose.vitorino@pt.pwc.com
Spain Virginia Arce virginia.arce@es.pwc.com
Sweden Nicklas Kullberg nicklas.kullberg@se.pwc.com
Switzerland Patrick Balkanyi patrick.balkanyi@ch.pwc.com
United Kingdom Phil Stokes phil.stokes@uk.pwc.com
Central and Eastern Europe
Czech Republic Jiri Moser jiri.moser@cz.pwc.com
Hungary Manfred Krawietz manfred.h.krawietz@hu.pwc.com
Poland Adam Krason adam.krason@pl.pwc.com
Romania John Webster john.webster@ro.pwc.com
Russia Natalia Yakovleva natalia.yakovleva@ru.pwc.com
Turkey Murat Colakoglu murat.colakoglu@tr.pwc.com
Middle East/Africa
Israel Eran Iohan eran.iohan@il.pwc.com
Middle East/North Africa †
Fouad Alaeddin fouad.alaeddin@jo.pwc.com
South Africa Vicky Myburgh vicky.myburgh@za.pwc.com
†Comprises Algeria, Bahrain, Egypt, Jordan, Kuwait, Lebanon, Libya, Morocco, Oman, Qatar, Saudi Arabia, Syria, and the United Arab Emirates.
Industry overview 5

7. Asia Pacific
Australia David Wiadrowski david.wiadrowski@au.pwc.com
China Marcel Fenez marcel.fenez@hk.pwc.com
Hong Kong Marcel Fenez marcel.fenez@hk.pwc.com
India Timmy Kandhari timmy.s.kandhari@in.pwc.com
Indonesia Chrisna Wardhana chrisna.wardhana@id.pwc.com
Japan Akihiko Nakamura akihiko.nakamura@jp.pwc.com
Korea Hum-Seok Park hum-seok.park@kr.pwc.com
Malaysia Neil Proudlove neil.proudlove@my.pwc.com
New Zealand Keren Blakey keren.blakey@nz.pwc.com
Pakistan Sohail Hasan sohail.hasan@pk.pwc.com
Philippines Mary Jade T. Roxas jade.roxas@ph.pwc.com
Singapore Charlotte Hsu charlotte.hsu@sg.pwc.com
Taiwan Han Wu han.wu@tw.pwc.com
Thailand Kajornkiet Aroonpirodkul kajornkiet.aroonpirodkul@th.pwc.com
Vietnam Ian Lydall ian.lydall@vn.pwc.com
Latin America
Argentina Jesús Estevéz jesus.estevez@ar.pwc.com
Brazil Estela Vieira estela.vieira@br.pwc.com
Chile Rafael Ruano rafael.ruano@cl.pwc.com
Colombia Diego Henao diego.henao@co.pwc.com
Mexico Luis Roberto Martínez del Barrio luis.roberto.martinez@mx.pwc.com
Venezuela Estela Vieira estela.vieira@br.pwc.com
6 PwC | Global entertainment and media outlook: 2012–2016

8. Scope and methodology
Scope 8
Methodology 9

9. Scope
The Outlook reflects the collective wisdom of our large team of professionals
who work with entertainment and media companies around the world. It is a
unique resource for the industry, offering a five-year outlook for global consumer
spending and advertising revenues, along with insights into the technology,
government, political, and business trends driving those forecasts.
New additions to the 2012 home distribution through pay TV Categories covered
Outlook providers and also for over-the-top
content accessed via the Internet. • Internet access spending:
There are a number of data breakouts wired and mobile
Because video-on-demand and pay-per-
included in this year’s Outlook that
view are major components of electronic • Internet advertising:
were not provided in the past. We have
home video distribution, we are now wired and mobile
added trade shows to the “Business-
including those revenue streams in
to-Business” chapter, and concerts and • Television subscriptions
“Filmed Entertainment.” And because
music festivals to the “Recorded Music” and license fees
“Television Subscriptions and License
chapter, which we renamed “Music.”
Fees” focuses principally on distribution, • Television advertising
Also in “Music,” we are providing data
we shifted to “Filmed Entertainment”
for unit sales of both physical and • Music
video-on-demand and pay-per-view to
digital recorded music, available in the
reflect payments for content. • Filmed entertainment
online edition. In “Consumer Magazine
Publishing,” we are providing per-issue • Video games
unit sales for print circulation and
paid unit sales for digital circulation, • Radio
also available in the online edition. • Out-of-home advertising
In “Filmed Entertainment,” we are
providing revenue data for electronic • Consumer magazine publishing
• Newspaper publishing
• Consumer and educational
book publishing
• Business-to-business
Regions/countries covered
North America EMEA Asia Pacific Latin America
Canada Western Europe Central and Eastern Europe Australia Argentina
United States Austria Czech Republic China Brazil
Belgium Hungary Hong Kong Chile
Denmark Poland India Colombia
Finland Romania Indonesia Mexico
France Russia Japan Venezuela
Germany Turkey Malaysia
Greece New Zealand
Ireland Middle East/Africa Pakistan
Italy Israel Philippines
Netherlands Middle East/North Africa (MENA)† Singapore
Norway South Africa South Korea
Portugal Taiwan
Spain Thailand
Sweden Vietnam
Switzerland
United Kingdom
†Comprises Algeria, Bahrain, Egypt, Jordan, Kuwait, Lebanon, Libya, Morocco, Oman, Qatar, Saudi Arabia, Syria, and the United Arab Emirates.
8 PwC | Global entertainment and media outlook: 2012–2016

10. Methodology
How we derive the data Forecast information How we report the data
Recent trends in industry performance in each chapter
Historical information are analyzed, and the factors underlying Segment spending consists of
those trends are identified. advertising and end-user spending
Historical information is obtained
The factors considered are economic, related directly to entertainment
principally from confidential and
demographic, technological, and media content. Each chapter
proprietary sources. In instances when
institutional, behavioral, and introduction begins with a definition of
third-party sources are consulted and
competitive, as well as certain other the spending streams that are included
their information is used directly—
drivers that may affect each of the in that segment. We do not include
from such sources as government
entertainment and media markets. spending on hardware or on services
agencies, trade associations, or related
that may be needed to access content.
entities that seek to have their data Models are then developed to quantify
disseminated in the public domain— the impact of each factor on industry End-user spending is counted at the
the sources of such information are spending. Next, a forecast scenario for consumer or end-user level, not at the
explicitly cited. In instances when the each causative factor is created, and wholesale level, and includes retail
information is used indirectly, as part of the contribution of each factor on a markups when applicable.
the calculus for the historical data, the prospective basis is identified. Advertising spending is measured net
sources are proprietary.
Those proprietary mathematical models of agency commissions in all territories
Each year, we look not only at data for and analytic algorithms are applied in except the United States and Russia,
the most recent year but also at the the process to provide an initial array where gross advertising is measured to
historical data to determine whether of prospective values. Our professional be consistent with the way advertising
there have been any revisions and expertise and institutional knowledge is generally reported.
whether new sources have emerged are then brought to bear in a review and In addition to annual-spending figures,
that provide a more complete or more adjustment of those values if required. we also present data that are measured
accurate picture of the market. In some The entire process is then examined for at a single point in time, such as TV
cases, that exercise leads us to revise internal consistency and transparency subscriptions, Internet subscriptions,
historical spending levels and growth vis-à-vis prevailing industry wisdom. mobile subscriptions, and newspaper
trends from one edition to the next.
Forecasts for 2012–2016 are also unit circulation. In those instances,
based on analysis of the dynamics of we show annual averages rather than
each segment in each region and on year-end totals because annual averages
factors that affect those dynamics. We more accurately connect the impact of
provide compound annual growth rates these figures to annual spending.
(CAGRs) that cover the 2012–2016
forecast period. In the calculation of Inflation
CAGRs, 2011 is the beginning year, with
five growth years during the forecast Across all chapters, figures are reported
period: 2012, 2013, 2014, 2015, in nominal terms reflecting actual
and 2016. The end year is 2016. The spending transactions and therefore
formula is: include the effects of inflation.
CAGR = 100 * [(Value in 2016/Value
in 2011)1/5 – 1]
Key to symbols used in the tables and charts
p = preliminary
NA = not available
— = no spending that year
Totals in tables and charts may not total arithmetically due to rounding.
Industry overview | Methodology 9

11. Exchange rates are not distorted by fluctuations in
international exchange rates.
All figures are presented in US dollars
by using the average 2011 exchange The exchange rates used for the
rate held constant for each historical individual countries in each region are
year and forecast year. This means outlined in the following tables.
the figures reflect industry trends and
Exchange rates per US$ (2011 average) Exchange rates per US$ (2011 average)
North America Currency Exchange rate EMEA Currency Exchange rate
United States Dollar 1.0000 Western Europe
Canada Dollar 0.9888 Austria Euro 0.7188
Belgium Euro 0.7188
Exchange rates per US$ (2011 average) Denmark Krone 5.3552
Finland Euro 0.7188
Asia Pacific Currency Exchange rate France Euro 0.7188
Australia Dollar 0.9687 Germany Euro 0.7188
China Yuan (renminbi) 6.4544 Greece Euro 0.7188
Hong Kong Dollar 7.7839 Ireland Euro 0.7188
India Rupee 46.8466 Italy Euro 0.7188
Indonesia Rupiah 8,779.0000 Netherlands Euro 0.7188
Japan Yen 79.7000 Norway Kroner 5.6008
Malaysia Ringgit 3.0528 Portugal Euro 0.7188
New Zealand Dollar 1.2629 Spain Euro 0.7188
Pakistan Rupee 85.6576 Sweden Krona 6.4873
Philippines Peso 43.1844 Switzerland Franc 0.8866
Singapore Dollar 1.2567 United Kingdom Pound sterling 0.6235
South Korea Won 1,105.7300 Central and Eastern Europe
Taiwan Dollar 29.2632 Czech Republic Koruna 17.6870
Thailand Baht 30.4944 Hungary Forint 200.6790
Vietnam Dong 20,453.6000 Poland Zloty 2.9585
Romania New lei 3.0446
Exchange rates per US$ (2011 average) Russia Ruble 29.3303
Turkey New lira 1.6774
Latin America Currency Exchange rate Middle East/Africa
Argentina Peso 4.1213 Israel New shekel 3.5603
Brazil Real 1.6698 Middle East/North
Chile Peso 481.5800 Africa (MENA)† US dollar 1.0000
Colombia Peso 1,827.4900 South Africa Rand 7.2313
Mexico Peso 12.4183 †Comprises Algeria, Bahrain, Egypt, Jordan, Kuwait, Lebanon, Libya, Morocco,
Oman, Qatar, Saudi Arabia, Syria, and the United Arab Emirates.
Venezuela Bolivar fuerte 4.2897 Figures are estimated in US dollars.
10 PwC | Global entertainment and media outlook: 2012–2016

12. Because all figures are shown as actual and media spending. The following
spending, with the effects of inflation tables show historical and projected
included, nominal GDP growth has an growth rates for nominal GDP for the
important influence on entertainment individual countries in each region.
Nominal GDP growth by country in North America (%)
2012–16
North America 2007 2008 2009 2010 2011p 2012 2013 2014 2015 2016 CAGR
United States 4.9 2.2 –1.7 3.8 4.5 4.0 4.4 5.1 5.2 5.1 4.8
Canada 6.4 4.6 –4.7 4.9 5.0 4.1 4.3 4.7 4.5 4.4 4.4
Total 5.1 2.4 –2.0 3.9 4.6 4.0 4.4 5.1 5.1 5.0 4.7
View data in your local currency. Visit the online Outlook
at www.pwc.com/outlook
Industry overview | Methodology 11

13. Nominal GDP growth by country in EMEA (%)
2012–16
EMEA 2007 2008 2009 2010 2011p 2012 2013 2014 2015 2016 CAGR
Western Europe
Austria 5.8 4.1 –3.1 3.5 6.0 3.0 2.9 3.4 3.5 3.8 3.3
Belgium 5.3 2.9 –1.6 3.9 5.4 1.7 2.7 3.0 3.2 3.5 2.8
Denmark 3.9 2.7 –4.9 4.4 4.0 2.8 4.0 4.2 4.5 4.3 3.9
Finland 8.5 2.8 –7.3 4.4 6.2 3.6 4.4 4.6 4.8 5.0 4.5
France 4.9 2.7 –2.0 2.0 3.9 1.4 2.6 3.0 2.9 3.5 2.7
Germany 4.6 2.0 –3.4 4.7 4.9 3.7 4.0 3.9 3.5 2.7 3.6
Greece 7.5 4.3 –0.8 –2.0 –2.7 –3.6 –0.4 0.6 1.6 2.7 0.2
Ireland 6.8 –5.0 –11.3 –3.6 2.0 1.3 2.2 2.6 3.2 3.5 2.6
Italy 4.0 1.4 –3.0 2.3 3.3 –0.6 0.9 2.1 2.8 3.1 1.6
Netherlands 5.3 4.8 –4.3 3.1 4.1 2.9 3.4 3.7 3.0 2.5 3.1
Norway 5.2 10.8 –5.4 5.2 3.4 4.0 4.3 4.6 4.8 5.1 4.5
Portugal 5.3 1.9 –2.3 2.7 1.1 –2.1 0.4 1.2 1.7 2.6 0.7
Spain 7.1 3.2 –3.1 1.8 3.7 2.1 2.2 2.3 3.1 3.8 2.7
Sweden 6.2 2.5 –3.6 6.9 7.2 2.9 3.5 4.4 4.2 4.3 3.8
Switzerland 6.2 4.4 –1.6 2.0 2.5 0.7 2.9 3.1 2.9 3.4 2.6
United Kingdom 5.8 2.9 –3.5 4.4 5.8 3.5 4.2 4.2 4.5 4.4 4.2
Western Europe total 5.3 2.7 –3.3 3.2 4.3 2.1 3.0 3.3 3.4 3.5 3.1
Central and Eastern Europe
Czech Republic 9.7 4.3 –1.7 1.2 4.1 3.7 4.5 4.8 5.7 5.2 4.8
Hungary 6.7 5.7 –2.6 4.1 5.6 5.1 4.6 5.1 5.8 6.3 5.4
Poland 11.0 8.4 5.3 5.1 8.0 5.2 5.8 5.9 6.2 6.1 5.8
Romania 39.1 19.7 –20.1 –1.0 7.8 5.0 5.6 7.0 7.1 7.0 6.3
Russia 22.0 27.0 –5.7 11.1 12.7 9.9 10.1 10.7 10.4 9.8 10.2
Turkey 11.2 12.7 0.2 18.3 12.9 10.2 8.7 9.0 8.7 9.1 9.1
Central and Eastern
Europe total 16.9 17.7 –3.4 10.1 11.0 8.5 8.4 8.9 8.9 8.7 8.7
Middle East/Africa
Israel 6.0 5.2 5.9 5.8 8.4 5.3 5.8 5.8 6.0 5.9 5.7
Middle East/North
Africa (MENA)† 14.7 22.0 –11.1 10.4 11.5 9.2 9.5 9.7 10.0 9.8 9.6
South Africa 14.1 13.2 6.1 8.8 8.7 11.6 9.2 9.0 9.2 9.3 9.7
Middle East/
Africa total 13.4 18.2 –6.1 9.5 10.5 9.2 9.0 9.1 9.4 9.3 9.2
EMEA total 7.2 5.8 –3.5 4.7 5.8 3.7 4.4 4.8 5.0 5.0 4.6
†Comprises Algeria, Bahrain, Egypt, Jordan, Kuwait, Lebanon, Libya, Morocco, Oman, Qatar, Saudi Arabia, Syria, and the United Arab Emirates.
12 PwC | Global entertainment and media outlook: 2012–2016

14. Nominal GDP growth by country in Asia Pacific (%)
2012–16
Asia Pacific 2007 2008 2009 2010 2011p 2012 2013 2014 2015 2016 CAGR
Australia 9.2 9.1 0.6 5.5 4.7 6.2 6.2 6.1 5.7 6.0 6.0
China 19.6 18.1 8.6 16.7 14.9 12.3 12.5 12.8 12.6 12.7 12.6
Hong Kong 9.6 3.8 –3.3 7.8 11.8 8.9 8.4 7.6 8.0 8.3 8.2
India 16.1 12.0 17.3 20.3 16.4 14.2 13.8 14.0 13.8 12.7 13.7
Indonesia 18.3 25.3 13.2 14.6 12.5 13.2 12.5 12.7 13.0 13.2 12.9
Japan 1.6 –2.0 –6.1 3.2 –0.9 2.0 1.5 1.7 2.1 2.1 1.9
Malaysia 11.8 15.4 –8.3 12.7 8.6 7.7 7.7 7.5 7.5 7.7 7.6
New Zealand 7.9 1.7 1.2 4.0 6.5 6.6 5.7 5.2 5.3 5.6 5.7
Pakistan 13.8 18.1 24.4 15.1 16.9 18.3 17.0 16.2 16.5 16.7 16.9
Philippines 10.2 11.4 3.6 10.9 9.4 9.2 9.1 9.3 9.5 9.7 9.4
Singapore 15.6 2.7 –3.1 17.7 9.2 7.3 6.7 6.5 6.7 6.8 6.8
South Korea 7.3 5.3 3.6 9.3 8.0 6.7 6.6 7.1 7.2 6.8 6.9
Taiwan 1.8 10.5 –2.8 11.9 7.1 6.9 7.0 7.1 7.3 7.6 7.2
Thailand 8.7 6.4 –0.4 11.7 7.6 9.1 9.2 8.6 8.7 8.8 8.9
Vietnam 17.4 29.8 11.7 16.6 25.7 19.2 13.2 13.1 12.9 13.2 14.3
Total 9.1 7.6 2.3 10.8 8.5 8.6 8.6 9.0 9.2 9.4 9.0
Nominal GDP growth by country in Latin America (%)
2012–16
Latin America 2007 2008 2009 2010 2011p 2012 2013 2014 2015 2016 CAGR
Argentina 24.1 27.8 10.3 25.9 17.8 15.2 14.7 15.0 12.9 12.6 14.1
Brazil 12.3 13.9 5.1 15.4 9.8 9.3 9.4 9.1 8.8 8.7 9.1
Chile 10.3 3.9 2.3 13.8 9.8 7.9 7.7 7.7 7.9 8.0 7.8
Colombia 27.5 17.3 –4.5 24.0 8.4 7.5 7.7 7.7 7.8 7.9 7.7
Mexico 9.2 7.8 –2.3 10.5 7.3 6.6 6.5 6.9 6.7 6.6 6.7
Venezuela 23.5 37.3 4.8 26.3 29.3 28.7 26.5 26.0 24.9 25.1 26.2
Total 13.6 14.5 2.7 16.4 11.6 11.1 11.2 11.5 11.3 11.6 11.3
Industry overview | Methodology 13

15. Global nominal GDP growth (%)
2012–16
2007 2008 2009 2010 2011p 2012 2013 2014 2015 2016 CAGR
Global 7.5 5.8 –1.0 7.1 6.7 5.9 6.3 6.8 7.0 7.1 6.6
The following tables show historical and
projected growth rates for consumer
price inflation for the individual
countries in each region.
Consumer price inflation by country in North America (%)
2012–16
North America 2007 2008 2009 2010 2011p 2012 2013 2014 2015 2016 CAGR
United States 2.9 3.8 –0.4 1.6 2.9 2.0 1.9 2.2 2.3 2.3 2.1
Canada 2.2 2.4 0.3 1.8 2.8 2.1 2.0 2.1 2.0 2.0 2.0
Total 2.8 3.7 –0.3 1.6 2.9 2.0 1.9 2.2 2.3 2.2 2.1
View year-on-year growth for every data line. Visit the online
Outlook at www.pwc.com/outlook
14 PwC | Global entertainment and media outlook: 2012–2016

16. Consumer price inflation by country in EMEA (%)
2012–16
EMEA 2007 2008 2009 2010 2011p 2012 2013 2014 2015 2016 CAGR
Western Europe
Austria 2.2 3.1 0.5 1.7 3.1 2.8 2.4 2.3 2.1 2.2 2.4
Belgium 1.8 4.5 –0.1 2.2 3.2 2.0 2.0 2.0 2.1 2.1 2.0
Denmark 1.7 3.4 1.4 2.3 2.5 1.7 2.3 2.2 2.0 1.9 2.0
Finland 2.5 4.1 0.0 1.3 3.4 3.0 2.5 2.3 2.1 2.1 2.4
France 1.5 2.8 0.1 1.7 2.2 1.8 1.6 1.9 1.3 1.9 1.7
Germany 2.3 2.6 0.4 1.2 2.3 2.8 2.5 2.3 1.7 1.3 2.1
Greece 2.9 4.1 1.2 4.7 2.8 1.3 1.2 1.1 1.3 1.4 1.3
Ireland 4.9 4.0 –4.5 –1.6 1.1 2.3 2.5 2.1 2.0 2.1 2.2
Italy 1.7 3.4 0.7 1.6 2.7 0.8 1.5 1.7 1.9 2.0 1.6
Netherlands 1.6 2.4 1.2 0.9 2.3 2.6 2.2 2.1 1.4 0.7 1.8
Norway 0.8 3.7 2.2 2.3 1.6 2.0 2.1 2.3 2.5 2.5 2.3
Portugal 2.8 2.6 –0.8 1.4 3.3 1.3 1.4 1.5 1.6 1.7 1.5
Spain 2.8 4.0 –0.4 2.0 3.1 2.8 2.0 1.4 1.6 1.8 1.9
Sweden 2.2 3.4 –0.3 1.9 2.9 1.8 1.8 2.0 1.9 2.0 1.9
Switzerland 2.6 3.3 –3.9 0.7 0.5 0.1 1.3 1.3 1.4 1.7 1.1
United Kingdom 4.3 4.0 –0.5 3.3 4.8 2.5 2.1 2.0 2.1 2.1 2.2
Western Europe total 2.4 3.3 0.0 1.8 2.8 2.0 2.0 2.0 1.7 1.8 1.9
Central and Eastern Europe
Czech Republic 3.0 6.4 1.1 1.4 2.0 3.0 2.5 2.4 2.3 2.2 2.5
Hungary 7.9 6.1 4.2 4.9 4.0 4.8 3.4 3.2 3.3 3.0 3.5
Poland 2.3 4.4 3.9 2.7 4.1 2.7 2.6 2.5 2.6 2.6 2.6
Romania 4.9 7.8 5.6 6.1 6.3 3.5 3.2 3.1 3.1 3.5 3.3
Russia 9.0 14.1 11.7 6.9 8.3 6.5 6.4 6.6 6.2 5.7 6.3
Turkey 8.7 10.4 6.3 8.6 5.9 8.3 5.5 5.2 4.6 4.9 5.7
Central and Eastern
Europe total 6.4 9.7 7.9 6.0 6.5 6.0 5.3 5.4 5.0 4.9 5.3
Middle East/Africa
Israel 0.4 4.7 3.3 2.7 3.4 1.5 1.9 2.0 2.2 2.5 2.0
Middle East/North
Africa (MENA)† 5.7 10.0 3.6 4.6 5.6 5.7 5.5 5.5 5.7 5.9 5.7
South Africa 7.2 11.5 7.1 4.3 5.0 5.5 5.4 5.3 5.4 5.7 5.5
Middle East/
Africa total 5.0 9.5 4.2 4.3 5.2 5.2 5.1 5.2 5.4 5.6 5.3
EMEA total 2.7 4.2 1.4 2.6 3.6 3.1 3.0 3.1 2.9 3.2 3.1
†Comprises Algeria, Bahrain, Egypt, Jordan, Kuwait, Lebanon, Libya, Morocco, Oman, Qatar, Saudi Arabia, Syria, and the United Arab Emirates.
Industry overview | Methodology 15

17. Consumer price inflation by country in Asia Pacific (%)
2012–16
Asia Pacific 2007 2008 2009 2010 2011p 2012 2013 2014 2015 2016 CAGR
Australia 2.3 4.4 1.8 2.8 3.2 2.8 3.0 2.8 2.6 2.7 2.8
China 4.8 5.9 –0.7 3.3 5.6 3.9 3.9 3.7 3.6 3.8 3.8
Hong Kong 1.9 4.3 0.6 2.4 5.5 4.5 3.5 3.0 2.6 2.7 3.3
India 6.3 8.4 10.9 9.6 9.0 6.5 6.0 5.8 5.5 5.2 5.8
Indonesia 9.1 11.0 2.8 6.9 5.7 6.5 5.4 5.3 5.2 5.0 5.5
Japan 0.1 1.4 –1.4 –0.7 –0.4 –0.1 0.2 0.5 0.6 0.8 0.4
Malaysia 2.0 5.5 0.6 1.7 3.2 2.5 2.4 2.4 2.3 2.2 2.4
New Zealand 2.6 3.8 1.9 1.8 4.4 2.7 2.4 2.4 2.3 2.3 2.4
Pakistan 7.6 20.3 13.6 13.9 13.9 14.0 12.0 10.5 10.0 10.0 11.3
Philippines 2.8 9.3 3.3 4.5 4.5 4.1 4.0 4.0 4.0 4.0 4.0
Singapore 2.1 6.6 0.5 2.8 3.7 2.9 2.4 2.1 2.0 2.0 2.3
South Korea 2.6 4.6 2.8 3.0 4.2 3.2 3.0 2.9 2.9 3.0 3.0
Taiwan 2.3 3.5 –0.9 1.0 1.8 1.8 2.0 2.0 2.1 2.1 2.0
Thailand 2.2 5.4 –0.9 3.3 4.0 4.1 4.2 3.5 3.5 3.4 3.7
Vietnam 8.3 23.1 7.1 8.9 18.8 12.1 6.0 5.5 5.4 5.7 6.9
Total 1.9 3.9 0.2 2.6 4.0 3.4 3.5 3.7 3.6 3.9 3.6
Consumer price inflation by country in Latin America (%)
2012–16
Latin America 2007 2008 2009 2010 2011p 2012 2013 2014 2015 2016 CAGR
Argentina 8.8 8.6 6.3 10.4 10.8 11.8 12.7 11.0 9.0 8.5 10.6
Brazil 3.6 5.6 4.9 5.0 6.4 5.6 5.2 4.7 4.5 4.4 4.9
Chile 4.3 8.8 1.7 1.2 3.1 3.1 3.0 3.0 3.0 3.1 3.0
Colombia 5.6 6.9 4.2 2.3 3.3 2.9 3.1 3.0 3.0 3.0 3.0
Mexico 4.0 5.2 5.3 4.2 3.3 3.4 3.2 3.4 3.3 3.1 3.3
Venezuela 18.8 31.4 28.6 29.1 25.8 24.3 23.9 23.5 22.9 21.1 23.1
Total 4.3 6.4 6.2 6.5 7.8 8.6 9.6 10.9 12.1 13.3 10.9
Global consumer price inflation (%)
2012–16
2007 2008 2009 2010 2011p 2012 2013 2014 2015 2016 CAGR
Global 2.5 4.0 0.8 2.6 3.8 3.5 3.5 4.0 4.2 4.7 4.0
16 PwC | Global entertainment and media outlook: 2012–2016

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

19. Preface and economic context
We are pleased to present the 13th edition of PwC’s Global
entertainment and media outlook.
The purpose of this Industry Overview is to provide a brief overview of
the data presented in the 2012–2016 Outlook and to present a thought
piece on our insights related to the trends that drive the industry and
the growth forecasts.
2011:
The recovery progresses
The global economy began to recover in
2010 from its steep decline in 2009 and
continued to advance in 2011, although
the hoped-for pickup in momentum did
not materialize consistently around the
globe. Global entertainment and media
(E&M) spending rose 4.9 percent in
2011—a bit faster than the 4.5 percent
increase in 2010 but still below gains
in prior expansion years. Advertising
increased 3.6 percent, down from
the 7.0 percent gain in 2010 that was
augmented by advertising associated
with the FIFA World Cup and Winter
Olympics and by the rebound from a
sluggish 2009. Consumer/end-user
spending rose 2.0 percent, up from the
1.3 percent rise in 2010. Internet access
recorded the largest improvement, rising
by 15.1 percent from the 10.0 percent
gain in 2010.
18 PwC | Global entertainment and media outlook: 2012–2016

20. Projected and actual global 2011 E&M growth by category (%)
Category Projected Actual
Advertising 3.1 3.6
Consumer/end user 3.4 2.0
Internet access:
wired and mobile 8.8 15.1
Total 4.3 4.9
Sources: PricewaterhouseCoopers LLP, Wilkofsky Gruen Associates
Projected and actual global 2011 E&M growth by segment (%)
Segment Projected Actual
Internet access:
wired and mobile 8.8 15.1
Internet advertising:
wired and mobile 13.6 18.7
TV subscriptions and
license fees† 7.0 7.2
TV advertising 3.3 3.1
Recorded music‡ –5.7 –2.4
Filmed entertainment ††
5.1 0.1
Video games 6.8 2.2
Consumer magazine
publishing 0.6 –0.8
Newspaper publishing –0.1 –0.7
Radio 3.1 1.5
Out-of-home advertising 2.0 5.0
Consumer and educational
book publishing 0.7 –1.3
Business-to-business‡‡ 0.9 0.6
Total 4.3 4.9
†Excludes video-on-demand, pay-per-view, and over-the-top.
‡Excludes concerts and music festivals.
††Excludes video-on-demand and pay-per-view.
‡‡Excludes trade shows.
Industry overview | Preface and economic context 19

21. In the 2011–15 Outlook, we pre- On a segment basis, in addition to floor may exist in terms of spending
dicted a 3.1 percent increase in global Internet access, Internet advertising, on physical music. In filmed entertain-
advertising, which was a bit lower recorded music, and out-of-home ment, box office spending in a number
than the 3.6 percent actual increase. advertising substantially outperformed of countries was disappointing, reflect-
Consumer/end-user spending rose our expectations in 2011, while filmed ing less-appealing movies. In home
2.0 percent, a somewhat smaller gain entertainment, video games, and video, Blu-ray gains were smaller than
than our 3.4 percent projection. We consumer and educational books grew expected, while DVDs were pretty much
expected Internet access spending to less than we expected. TV subscrip- as anticipated, with the result that
increase by 8.8 percent in 2011, but tions and license fees, TV advertising, overall physical spending declined. In
actual growth was nearly twice as fast, and business-to-business materially video games, growth in online gaming
with a 15.1 percent increase. A jump matched our forecasts, while consumer cut into the console market, leading to
in infrastructure spending combined magazine and newspaper publishing slower growth in overall spending than
with a surge in smart-device pene- and radio were within two percentage we expected. In consumer and educa-
tration fueled large gains in mobile points of our projections. tional books, lower-priced electronic
access and propelled the overall access books surged in 2011, cutting into print
In recorded music, declines in physical
market. Overall global E&M growth of sales. Overall spending declined even
spending moderated in a number of
4.9 percent was marginally ahead of as reading picked up.
countries, most notably in the United
the 4.3 percent increase we projected
States, leading to a smaller decline than
last year.
we expected and hinting that a natural
Global E&M spending and nominal GDP growth (%)
10
5
0
–5
–10
–15
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
Global nominal GDP Global advertising
Global consumer/end user Global E&M spending
Sources: PricewaterhouseCoopers LLP, Wilkofsky Gruen Associates
20 PwC | Global entertainment and media outlook: 2012–2016

22. Looking forward Over the longer run, we expect the E&M spending is affected by the
economic climate to improve, which economy, and countries experiencing
The economic prospects in the short healthy economic growth will see
will lead to faster growth in E&M
term are mixed. Europe’s economy large gains in E&M spending. By
spending during the next five years
remains weak, North America appears contrast, weak economies will dampen
compared with the 2008–11 period.
to be improving, Latin America is growth in other countries. We expect
Nevertheless, we expect E&M growth
relatively healthy, and the People’s gains averaging less than 3 percent
to continue to lag nominal GDP growth,
Republic of China (PRC) and India annually in Japan, Germany, Ireland,
principally because of the ongoing shift
continue to record strong, if moder- Denmark, Spain, and Greece and
from higher-priced physical distribution
ating, growth. We expect the varied gains averaging less than 3.5 percent
to lower-priced digital distribution. As
economic prospects to be reflected in compounded annually in the UK, Italy,
the experience of the book publishing
E&M spending growth in 2012. We France, Austria, the Netherlands,
industry in 2011 reveals, the shift in
project Europe, Middle East, Africa and Switzerland. Full data on E&M
usage from traditional media to digital
(EMEA) to be the slowest-growing spending by country and major
media limits growth because end-user
region, with a 3.5 percent increase, category can be found in the sections
prices for digital content are generally
which will be less than the 5.2 percent on regional spending.
lower than prices for physical content.
advance in 2011. Latin America will
During the next five years, we project
be the fastest-growing region, with a
that E&M spending will grow at a
9.2 percent gain, nearly matching the
5.7 percent compound annual rate—
9.5 percent gain in 2011. Asia Pacific
below the projected 6.6 percent com-
will increase by 6.6 percent. Excluding
pound annual increase in nominal GDP.
the relatively sluggish Japanese market,
the remainder of Asia Pacific is expected The average growth rate masks wide
to grow by 9.0 percent. North America disparities in growth, resulting from
will grow by a projected 5.7 percent in economic disparities around the world.
2012, helped by an inflow of election- A number of countries in Asia and
related advertising in the United States Latin America along with Middle East/
as well as advertising associated with North Africa (MENA), South Africa,
the Summer Olympics. and Russia will average double-digit
increases during the next five years.
Create customized bar charts and line graphs instantly. Visit the
online Outlook at www.pwc.com/outlook
Industry overview | Preface and economic context 21

24. The end of the digital beginning:
E&M companies reshape and
retool for life in the new normal
Despite ongoing economic uncertainty, the past year has seen global
sales of tablets and smartphones reach record levels once again—thus
underlining the growing revenue opportunities in the digital delivery
of entertainment and media (E&M) content and advertising to
increasingly connected and, particularly, mobile customers.
However, behind the headlines, an Digital migration has two main impli- The Outlook also confirms that the
even more important milestone for the cations for E&M companies: One is parallel global shifts we’ve highlighted
E&M industry is upcoming: the onset of the need to make clear and commit- in recent years will continue to play
the digital new normal. Digital is now ted choices about the role or roles out and strengthen through 2016, with
embedded in business as usual. And companies should play in the digital value shifting as follows.
as digital moves to the heart of many value chain. The other is that behaviors
• From print to digital: For example,
media companies and begins to present are changing rapidly and irreversibly
electronic books’ share of total global
the greatest opportunities for growth, within organizations and organizations’
spending on consumer and educa-
what previously looked like a wide gap customer bases—and leaders need to
tional books will rise from 5 percent
between old media models and new understand and harness those behav-
in 2011 to 18 percent in 2016.
ones is being bridged. ioral changes to grow future revenues.
• From fixed to mobile-driven con-
Companies are planning out and execut-
sumption: Mobile Internet access
ing their strategies to cross to the new Three global shifts increased from 26 percent of total
normal, and with that, we’re hearing
Changing consumer behavior is driving Internet access spending in 2007
clearer and more-consistent language
both of the implications. Consumers’ to 40 percent in 2011—and will
from industry CEOs as they articulate
ongoing migration to digital modes of account for 45 percent in 2016.
the new landscape. That clearer lan-
guage signals that the initial uncertainty consumption got accelerated by the eco- • From West to East, North to South:
triggered by digital migration is giving nomic downturn. And it is now continu- During the next five years, total
way to a sharper focus on identifying, ing to gain pace during the recovery, E&M revenue growth in the East
choosing, and executing the business fueled by three forces now commonly (Central and Eastern Europe/Asia
models, organizational structures, and summarized as “social, mobile, and Pacific) will average 7.2 percent
skill sets that will harness new consumer local,” to which others add, variously, compounded annually, compared
behaviors to deliver rising future value “global” and “commercial.” Together with a 4.3 percent CAGR for the
in the changed environment. those forces will help companies tap West (North America/Western
into an expanding pool of value: this Europe). And growth in the South
edition of Global entertainment and (Latin America/Middle East/Africa)
media outlook projects that total global will average 10.0 percent com-
E&M revenues will rise from $1.6 trillion pounded annually—more than twice
in 2011 to $2.1 trillion by 2016. the 4.5 percent CAGR in the North
(North America/Europe).
Industry overview | The end of the digital beginning 23

25. Looking beyond the …to map out the industry’s • For the industry: Development of
impact of digital… future topography the right organizational and opera-
tional models to understand and
In last year’s Industry Overview, we Against this background, we believe harness new behaviors inside and
noted that those shifts—spearheaded the reshaping of the industry will take outside organizations in order to
by digital migration—were driving place based on the perspectives of three grow their revenues and/or margins
change in three dimensions: the main groups: in the new normal.
empowered consumer, the involved
• For consumers: The creation of We’ll examine each of those perspec-
advertiser, and transformation of
more-compelling, more-immersive, tives in turn.
the business for digital. The outcome
and increasingly shared experiences
of that transformation was a new
by understanding what connected
type of organization we termed the
consumers want—by finding the
Collaborative Digital Enterprise (CDE),
right little data amid the big data.
heralding a wider shift to a collabora-
tive ecosystem-based economy. • For advertisers and value chain
partners: The design of new
The developments of the past year rein-
business models that reinvent
force that view while also underlining
and expand the value proposi-
the fact that talking specifically about
tion of advertising and content
“digital” increasingly misses the point.
through innovation.
Digital marketing, for example, now
means marketing in a digital world. And
as digital becomes the new normal, its
rising penetration ceases to be a topic for
discussion. What matters is how compa-
nies capitalize on it and operate within it.
24 PwC | Global entertainment and media outlook: 2012–2016

26. 1. Understanding the connected consumer
Any discussion or analysis of what’s 2011, which will rise to 55 percent content. But today’s younger gener­
happening in entertainment and media in 2016. In contrast, other segments ations expect consuming media to
must begin with consumers. Why? are at the start of the journey: in the involve multifaceted, personalized
Because change in today’s consumer consumer magazine circulation mar- experiences that they can touch and
behavior is both pervasive and acceler- ket, digital paid circulation accounted influence—meaning, they feel not just
ating—and E&M is in the front line of for only 0.4 percent of total circulation engaged but also immersed.
that change. spending in 2011. But during the next
Those ideas aren’t new for consum-
five years, digital spending will surge,
PwC’s 15th Annual Global CEO Survey ers who were early adopters of digital
at a 76.1 percent CAGR, accounting for
finds that some 74 percent of CEOs in behaviors. But the difference today—
6.5 percent of total circulation spending
E&M are “somewhat concerned” or and the challenge for E&M companies—
by 2016.
“extremely concerned” about a perma- is that the expectation of an immersive
nent shift in consumer spending and content experience has now extended
behavior—the highest level of concern Demanding immersive and across the mass market, meaning that
in any sector. Other PwC research bears socialized experiences providers not only have to deliver on this
out the scale of the shifts under way: promise; they also must do so at ever-
more than 80 percent of respondents So, what kinds of media experiences are greater scale.
to PwC’s multichannel shopper survey1 these increasingly digital and connected
consumers seeking? They’re often The drive for immersion is increasingly
now research their purchases online
characterized as more demanding. In evident in the growth of such behaviors
before buying electronics, computers,
practice, this encompasses three specific as personal marathoning and social
books, music, and movies.
shifts. Today’s consumers want to: marathoning—consuming an entire
As the Outlook highlights, those changes series end-to-end either alone or socially.
reflect an underlying and ongoing • Watch, read, or listen to what they With smart devices now enabling easier
migration in consumer behavior and want and when they want to— and fuller social interaction around such
spending toward digital consump- ranging from “now” to “in my own content as newspapers and magazines,
tion and digital experiences. Growth good time.” that same sense of socialized immersion
in digital spending—defined here as • Access and consume content simul- is emerging in other media and is driving
spending over Internet protocol plat- taneously via multiple devices and spending choices.
forms in such segments as broadband connections: TV, smartphone, tablet
and mobile Internet access, mobile TV app, social media.
subscriptions, music, home video, video
games, newspapers, magazines, and • Find and engage with provocative
books—will continue to outpace growth and relevant media experiences that
in nondigital spending during the next cross the traditional boundaries of
five years. genre and immediacy—and ones
they can share, shape, and control.
Different segments are at different
stages of this industry-wide journey. These characteristics add up to a search
Recorded music—which already has for immersive experiences that unite
a well-developed digital market—saw the personal with the social. Past gen-
digital formats increase from 16 percent erations could feel engaged through the
of spending in 2007 to 33 percent in passive consumption of mass-market
1 “Customers take control,” PwC, December
2011; http://download.pwc.com/ie/pubs/2011_
customers_take_control.pdf.
Industry overview | The end of the digital beginning 25

27. Online gaming: the connected shape of things to come
A useful historical parallel for the connected and socialized future may be the rise
of online video games in Asia, where spending on online games overtook console/
handheld games in 2010. Such online games—especially advanced casual games
and massive multiplayer online games—were providing consumers with connected
social media experiences before people were even talking about social networks.
As the chart below shows, Asian countries—which also have huge cultures of social
media, such as China, which leads the way—have maintained their lead in terms
of growth in online/mobile gaming revenues. And outside Asia Pacific, such
markets as the US and Russia are also seeing healthy growth.
Many reasons have been suggested for Asian populations’ eager embrace of online
and social gaming, ranging from Asians’ relatively low participation in physical
sports to a simply game-friendly culture. But what’s clear is that online and mobile
gaming acted as a precursor of the socialization of other media in Asia and could
play the same role in other territories where online gaming takes off quickly when
the necessary connectivity becomes available.
In addition, as we’ll highlight later, online gaming has led the way in creating
flexible and sophisticated revenue models. To see the future of socialized media,
online gaming is a good place to start.
2007–11 growth in online/mobile video games (US$ millions)
Russia 687
United States 1,286
Japan 1,376
South Korea 1,750
China 4,707
0 1,000 2,000 3,000 4,000 5,000
26 PwC | Global entertainment and media outlook: 2012–2016

28. The medium formerly …and turning the second analog TV in the living room put the
known as TV: toward the screen into the consumer’s family circle at the center of the shared
media hub… social nexus content experience, the media hub will
shift the center of gravity toward a more
Amid these developments, one clear With the advent of smart devices, the geographically spread community of
trend is the continued strength of the concept of the media hub has now friends with shared interests, often of
medium formerly known as televi- gained a so-called second screen for similar ages. This extended circle of
sion—or, more accurately today, video. sharing and enjoying these experiences friends could become the media hub’s
The consumption of professional video anywhere. And with formerly print- killer application, glued together by the
content has never been more popular, based media such as magazines and shared content experience.
partly reflecting the explosion in the newspapers launching smart-device
ways people can access it. apps, these forms of content could also
The growing number of ways and become part of the overall media pack- Smart devices
contexts in which people can experi- age—as part of a multisegment media spearheading change…
ence video content is creating a blend bundle accessed via the media hub and
The first signs of the socialized mul-
of confusion, excitement, and choice for its connected screens.
tiscreen future are already emerging.
consumers. It’s also raising questions Some companies are already making But how is the consumer experiencing
around the value proposition and pricing the early running in this direction, such them? The answer lies in the rocketing
of TV-only content bundles—especially as Technicolor, with its MediaNavi and take-up of smart devices.
given the advent of a rising generation M-GO multiscreen content platform,
of savvy and increasingly urbanized Since the launch of the original iPad in
whereby MediaNavi serves as the
consumers who still love television but April 2010, tablets have brought home
socialized and personalized hub for
want more flexibility: first, in the ways to consumers—like no other device
navigating and accessing the universe
they access and pay for content and has—what the future of media might
of content, and the M-GO app expands
second, what content they get. look like. For the first time, consumers
that access across a range of connected
became willing to watch premium video
Like previous generations, the new con- devices. With social media incorporated
content on the go. And in addition to
sumers are passionate about other media into the media hub concept, consum-
cutting into PC sales, the tablet provides
experiences as well as television: live ers can take the logical next step from
a metaphor for the feel of a future with
concerts, radio, magazines, books, and watching “everything whenever and
ever-available mobile video and non-
so on. But unlike previous generations, wherever I want” to having friends and
video content.
they demand, consume, and function family log in to share the experience in
in a world of globally connected social real time. As soon as consumers held tablets, they
media. And they’re increasingly adept could imagine a large one fixed on the liv-
This could lead to an environment
at incorporating the various elements ing room wall for “big” content and fam-
where all content is streamed as a
of content and connectivity into their ily viewing; a handy-size one for a decent
cheap, easily available, cloud-based
media consumption mix. All of this personal or social content experience on
utility-style service, with the streamed
points toward the multichannel, multi- the move; and a small one in the form of
and shared live experience becoming
content, multiexperience future: a con- a smartphone, for times when connec-
the premium form of content. The digi-
cept we’ve termed here the media hub, tivity, information, and immediacy are
tal locker may also play a role, enabling
wherein a mass of content is available for the priorities. Each device suits differ-
consumers to store recorded content
an agreed price on all devices and where ent content and contexts. But the key is
remotely and access it from anywhere
the live experience—be it US basketball that portability, accessibility to content,
on any device.
or FIFA World Cup football or Lady Gaga on-demand capability, high resolution,
in concert—comes at a premium. In such a world, the multicontent, and acceptable screen size—all of those
multidevice media hub could regain the formerly conflicting goals—have finally
role that TV held as the nexus of the col- been reconciled.
lective social experience from the 1950s
through the 1990s. However, while the
Industry overview | The end of the digital beginning 27

29. …across broadcast and Consumer trends knock on …creating opportunities
print media into B2B business models… for curators and B2B2C
Smart devices bring transformational Consumers’ behavioral changes are also
providers
opportunities across EM segments. driving change in business-to-business For B2B information providers, the
For example, TV companies could give (B2B) publishing. Most consumers are most direct and most sustainable way to
consumers a customizable tablet/smart- members of the business workforce— maximize their proposition to advertis-
phone app that brings up a consumer’s who are increasingly mobile as well as ers is to be a curator of information for
own personal My Media on the TV, with accustomed to accessing information the target community. This information
the consumer’s favorite shows, mov- via an ever-wider range of devices. They is often publicly available elsewhere: if
ies, and apps. For instance, hotel guests expect the same immersive quality people have the time and inclination,
could get their own personal channels and consistency of experience at work they can now trawl around to find a
loaded straight up on the connected as in their private lives and are incor- mass of information on mergers-and-
TVs in their rooms by pointing their porating social behaviors into their acquisitions deals on the Internet. But
tablets at the TV. business behaviors. subscribers to the Financial Times’
mergermarket, for example, prefer to
Tablets are also enabling print pub- For companies, these trends present
pay mergermarket to act as their curator
lishers to present consumers with a challenges in terms of security and
for such information, by providing them
value proposition previously lacking in access, but they also open up business
with tailored, convenient deal data seg-
those publishers’ online products, thus opportunities. One outcome is that
mented by sector on their smart devices
convincing consumers to pay for addi- corporations are setting up social net-
as they travel to work.
tional and premium content. Examples works to encourage collaboration and
include the New York Times’ paid-for innovation. Another is that formerly
fashion app called The Collection, print-based B2B information publishers
which draws from a number of the are starting to view their businesses in
newspaper’s products and repackages a different way. It’s no coincidence that
them together stylishly. on its Web site, Wolters Kluwer of the
Netherlands now calls itself “a global
More generally, as the Outlook high-
provider of information, software, and
lights, tablets’ superior content experi-
services” rather than a publisher.
ence is enabling growing numbers of
print publishers to harness rising digital This is a major shift. For B2B informa-
revenues. E-books are claiming a ris- tion providers, the core value of their
ing share of the paid-for book market. business used to lie in their original
And more and more newspapers are product, such as a trade magazine or
both launching apps and putting their directory, whether physical or online.
content behind paywalls—often with a But today, these businesses’ real asset
free incentive so as to win over commit- is the deeply engaged specialist com-
ted print consumers. When Australia’s munity with deep domain expertise for
Herald Sun launched its new paywall- whom they provide information and
protected Web site and m-site alongside interaction, thereby acting as a gateway
its iPad app in early 2012, for example, for advertisers.
it offered an initial two-month free trial
of its Digital Pass.
28 PwC | Global entertainment and media outlook: 2012–2016