Table Of ContentREGIONAL STUDY
Michael Masnick
Michael Ho
GERMANY | FRANCE | UK | ITALY | RUSSIA | SPAIN
GERMANY | FRANCE | UK
ITALY | RUSSIA | SPAIN
REGIONAL STUDY
BOOKS GAMES MUSIC Video
MORE BOOKS ARE GAMING IS ON MORE LEGAL A RECORD YEAR
BEING PUBLISHED THE RISE ACROSS SERVICES APPEAR FOR THE EUROPEAN
THAN EVER BEFORE: EUROPE: EVERY YEAR: FILM INDUSTRY:
250 €6.4-billion
European box office gross, 2011
150
1995
2008 0.7% since 2010
327,264
40-Million
2011* 50
1,285 EU Feature films
= 10,000 562,633 produced in 2011
books = 1,000,000
*2010 data fOR gamers 07 08 09 10 11
Germany & Italy 2010 Number of Authorized Feature Films Produced
Books Published by Year 95-Million Music Services in All Studied Markets
GERMANY, FRANCE, UK, ITALY, RUSSIA, SPAIN Total European GERMANY, FRANCE, UK, ITALY, RUSSIA, SPAIN GERMANY, FRANCE, UK, ITALY, RUSSIA, SPAIN
Gaming Population
1,200
LIVE MUSIC MARKETS
EBOOK MARKETS ARE GROWING:
1000
ARE GROWING: ¼ of adults have played
a video game in the Live Revenues by Country
last 6 months (2010) 800
2010 2013 PROJECTION & Y.O.Y. CHANGE FROM 2007 05 06 07 08 09
(millions of euros) 351
Gaming isn’t just for the
GERMANY – $2.16B 20%
young. Almost 30% of 30 Films by Country
2009 to 49-year-olds are gamers. France – $1.2B 15% 2009 TOTAL & Y.O.Y. CHANGE FROM 2005
196
2008 GERMANY – 216 48%
117 Game Consoles In UK – $2.69B 10%
Europe, 2006-11 France – 230 4%
Total European ITALY – $800M 15%
Digital Book Market 150-mil UK – 126 19%
RUSSIA – $1.47b 105%
eBook Market 75-mil ITALY – 131 34%
SPAIN – $654M 11%
Growth by Country
RUSSIA – 253 57%
06 07 08 09 10 11 Live Music Revenues
GERMANY 77% (2010-11) with 2013 Projection SPAIN – 186 31%
France 315% UK, France, Italy, Spain, Germany, Russia
(2010-11)
$9-bil
UK 54% REVENUES TREND
(2010-11)
UPWARDS IN ALL TV MARKETS
$8.5-bil
ITALY 740% (2010-11) STUDIED MARKETS: ARE GROWING:
$8-bil
RUSSIA 30%
(2009-10) Total Video Game Television Revenues
SPAIN 37% Industry Revenues $7.5-bil in All Studied Markets
(2010-11) 07 08 09 10 11 12 13
GERMANY, FRANCE, UK, ITALY, RUSSIA, SPAIN GERMANY, FRANCE, UK, ITALY, RUSSIA, SPAIN
$15-Bil $100-bil
$10-Bil
$80-bil
$5-Bil
$60-bil
06 07 08 09 10 11 06 07 08 09 10 11 12
FACT SHEET
Germany
REGIONAL STUDY
Video Games
Game Industry Revenues
Source: PwC
» Social gaming upstart Wooga has
$3-bil
already hit 45-million monthly users
since it launched in 2009
$2.5-bil
» In 2009, the two fastest-growing IT
$2-bil
companies in Germany were video
game companies
$1.5-bil
06 07 08 09 10 11
Music Video
Authorized Online Music Services FIlms Produced
Source: UNESCO
250
2007 2011
68
175
11
518%
100
05 06 07 08 09
2011 Digital Music Revenues 2012 Box Office Gross
€247-million 21% €900-million 4.1%
Source: BVMI
Books
Number of Books Published
2010 Book Industry Revenues
Source: UNESCO
$6.3-billion 5% OVER 2008
2010
1995
95,838 » According to a Börsenverein study,
74,174
2-million ebooks were sold to 540,000
29% ebook consumers in 2010.
FACT SHEET
France
REGIONAL STUDY
Music
Digital Music Revenues Live Music Revenues
Source: IFPI With 2013 Projection. Source: PwC
$1.2-bil
2011
2010
$275m
$1.1-bil
$215m
27%
$1-bil
07 08 09 10 11 12 13
Video Video Games
Television Revenues Game Industry Revenues
Source: IHS Source: PwC
$20-bil $4-bil
$15-bil $3-bil
$10-bil $2-bil
06 07 08 09 10 11 12 06 07 08 09 10 11
2011 Box Office Record » France has had tax breaks for video
game developers since 2007, long
€1.4-billion 27%
before most European countries
Books
Number of Books Published
» France was the first EU nation to
Source: UNESCO
reduce VAT rates on eBooks to be
on par with printed books
2011 » The market share of eBooks in
1995
France grew from just 0.2% in 2010
62,278
34,766 to nearly 2% in 2011
79%
» Amidst economic turmoil, publishing
revenues held steady from 2008-10
FACT SHEET
United Kingdom
REGIONAL STUDY
Video
Box Office Gross Television Revenues
Source: IHS
£1-bil $25-bil
£0.8-bil
$20-bil
£0.6-bil
£0.4-bil $15-bil
00 01 02 03 04 05 06 07 08 09 06 07 08 09 10 11 12
Music Books
Authorized Online Music Services Number of Books Published
Source: UNESCO
2007 2011
2011
71
14 1995
149,800
101,764
407%
47%
» UK digital music revenues surpassed
physical revenues, leading to music » eBook market share grew from just
revenue growth of 2.7% from 2011-12 2-3% in 2010 to 7% in 2011
Video Games
Game Industry Revenues
Source: PwC » Video games have the highest growth
rate of all creative industries in the UK
$5-bil
» Video games account for a third of all
$4-bil creative industry exports
» In 2009, video game sales exceeded
$3-bil
consumer spending on films
$2-bil
06 07 08 09 10 11
FACT SHEET
Italy
REGIONAL STUDY
Music
Digital Music Revenues Live Music Revenues
Source: IFPI With 2013 Projection. Source: PwC
$800-mil
2011
2010
$49m
$700-mil
$42m
16%
$600-mil
07 08 09 10 11 12 13
Video Video Games
Television Revenues Game Industry Revenues
Source: IHS Source: PwC
$15-bil $1.5-bil
$12-bil $1.2-bil
$9-bil $0.9-bil
$6-bil $0.6-bil
06 07 08 09 10 11 12 06 07 08 09 10 11
Films Produced in 2009 » The Italian government has proposed
tax breaks for video game developers,
131 27% OVER 2005
though EU regulations could interfere
Books
Number of Books Published
» The market share of eBooks in Italy
Source: UNESCO
grew from less than 0.1% in 2010
to about 1% in 2011
2010 » Amidst economic turmoil, publishing
1995
revenues held steady from 2008-10
57,558
34,470
67%
FACT SHEET
Russia
REGIONAL STUDY
Video
Films Produced Television Revenues
Source: UNESCO Source: IHS
$8-bil
2009
2005
253
161 $6-bil
57%
$4-bil
06 07 08 09 10 11 12
Music Video Games
Live Music Revenues Game Industry Revenues
With 2013 Projection. Source: PwC Source: PwC
$1.5-bil $1.2-bil
$1.2-bil $1-bil
$0.9-bil $0.8-bil
$0.6-bil $0.6-bil
07 08 09 10 11 12 13 06 07 08 09 10 11
» Digital music revenues imploded from » Electronic Arts predicts the Russian
2010 to 2011, falling by 41% to $43-mil. game market will hit $1.5-bil by 2015
Books
Number of Books Published eBook Readers Sold
Source: UNESCO Source: India & Russia Report/Marina Rozhkova
2008
2011 2010
60,000
1995
122,915 470,000
33,623
266% 683%
FACT SHEET
Spain
REGIONAL STUDY
Music
Live Music Revenues Authorized Online Music Services
With 2013 Projection. Source: PwC
$700-mil
2011
2007 31
$600-mil 9
244%
$500-mil
07 08 09 10 11 12 13
Books Video Games
Number of Books Published Game Industry Revenues
Source: PwC
Source: UNESCO
$2-bil
2011
1995
$1.5-bil
74,244
48,467
53%
$1-bil
06 07 08 09 10 11
» Spain’s book market lost some ground » In 2010, 52% of 16-29 year olds and
during the global recession, falling from 27% of 30-49 year olds played video
$2.3-billion in 2008 to $2-billion in 2010 games (Source: ISFE/GameVision)
Video
FIlms Produced
Source: UNESCO
» The 2011 Spanish film No Habrá Paz
200
Para Los Malvados found success
without content windows: it was
150 released simultaneously in theaters,
on DVD, on pay-TV, and online.
100
05 06 07 08 09
Introduction
At the beginning of 2012, we released our report, “The Sky is Rising,” which looked at the state of the global
entertainment industry, focusing on four key creative sectors: music, books, video and video games. What we
found, in going through a significant amount of data, was that contrary to the stories of doom and gloom
concerning content, we are actually living in a true renaissance period of abundance, with each industry
growing in terms of revenue — but even more impressively in terms of content output, often expanding at
unheard of rates.
We looked at traditional metrics as well as some new business models that were either catching on, or
which were at least drawing significant interest. What we found was a world full of opportunity and growth.
At the same time, we noted that there were significant challenges for content creators: mainly in learning
to navigate this new world where (1) the process for becoming successful was not as clear on a map — even
if there were many more opportunities to succeed and (2) that there was much greater competition, both
within the specific field they were in, but also across other fields of entertainment.
In our follow-up report, which you’re now reading, we wanted to focus in on a few additional countries to
get a better understanding of whether or not the same patterns are true within specific economies. The
concern, of course, is that within the larger aggregate data, it’s possible that significant differences in cer-
tain countries could skew the overall data. For this report, we chose to focus on these six major economies:
Germany, France, the UK, Italy, Russia and Spain.
What we found was, as expected, not all economies are the same — and some of those economies are in
serious turmoil — but that the overall trend lines are similar in direction. Even as the growth may not have
been as strong or as clear in all of these countries, time and time again we found evidence that entertain-
ment industry output and options have been expanding over the last decade. This wasn’t true in every case
in every country — but even the small areas or periods of struggle appear to have been greatly outweighed
when looking at the overall economy.
That the same basic patterns remain tells quite a fascinating story: one that suggests that “content creation
will always find a way.” There are, certainly, significant challenges that content creators and related compa-
nies face in these countries — but over and over again, the evidence showed greater and greater creativity,
even in the face of these challenges.
1 Music ......................................................................................................2
2 Video ...................................................................................................10
3 Books .................................................................................................. 15
4 Video Games .......................................................................................22
Sources ...................................................................................................28
Acknowledgements ............................................................................... 29
Floor64 The Sky Is Rising Regional Study 1
1 MUSIC
The music industry has been portrayed as the harbinger of doom when it comes to the cre-
ative industries. Digital file sharing caught the recording industry by surprise and disrupted the
traditional economics of distributing music. Certainly, there are metrics that show a decline in
sales for music on physical media, but the larger picture doesn’t suggest that music is dying or
that the industry surrounding music is waning. The business landscape has definitely changed
significantly for musicians, and the way forward should focus on adapting to new digital tech-
nologies and business models — not looking to preserve outdated distribution methods.
MUSIC PRODUCTION
The world is producing music at a greater rate than ever before. Unfortunately, it’s difficult to aggregate exact num-
bers for how much music is produced every year, but several estimates point to undeniable growth. At the turn of
the millenium, the US produced an estimated 27,000 albums per year. By 2009, roughly 100,000 digital albums were
released in the US, more than tripling American music production in about a decade with about 1 million tracks
recorded per year now.
Globally, the media metadata service Gracenote has indexed over 130 million music tracks, and over the years, it has
been adding about 10-15 million songs to its database in a remarkably consistent manner, year after year. This rate
of indexing is not exactly equivalent to the rate of music production, however, as Gracenote’s indexing includes older
music as well as newly-produced
TRACKS INDEXED BY GRACENOTE 2001–12
works. Still, Gracenote’s indexing
rate is a reasonable proxy for music
150
S) 130 production since Gracenote admits
N
O that its metadata is biased towards
LI
MIL 120 100 commercially popular music and is
N likely to be gathered on newer mu-
D (I 90 sic rather than obscure, decades-
E
X
E 55 old music from around the world.
ND 60 46 Gracenote’s mission is not to create
S I
K an exhaustive archive of recorded
C
A 30 11 music, but its database still points
R
T
to an impressive amount of music
creation.
2001 02 03 04 05 06 07 08 08 10 11 12
Gracenote’s database is, unfortunately, a proprietary product that doesn’t publish more specific data on a per country
basis. (Another company with music metadata, Last.fm, also stopped allowing users access to its complete database
in 2007.) However, other music collections, such as MusicBrainz, are completely open about music metadata, but cur-
2 Floor64 The Sky Is Rising Regional Study
