Independent Film Market

Filmed Entertainment

The filmed entertainment market consists of consumer box office spending for theatrical motion pictures plus spending on renting and purchasing home video products in both DVD and VHS formats. It also includes online film rental subscription services, such as those whereby DVDs are delivered via overnight mail, and streaming services, whereby films are downloaded via a broadband Internet connection. The figures do not include music videos (which are counted in the Recorded Music chapter), or video-on-demand (VOD), or pay-per-view (PPV), or movie distribution by cable, satellite, or telephone companies (which are covered in the TV Distribution chapter).

Global facts and forecasts:

• "U.S. box office growth will average 4.3 percent compounded annually during the next five years from a weak 2005, taking total box office spending from $9.0 billion in 2005 to $11.1 billion in 2010. However, admissions in 2010 will remain below the levels achieved during 2002-04."
• "In EMEA online subscription services and video streaming services are entering the market. Together they will reach $2.2 billion by 2010 from only $216 million in 2005, averaging 59.1 percent growth compounded annually."
• "In Asia Pacific high-definition video and reduced piracy will stimulate the sell-through market. We project sell-through spending to grow at a 6.2 percent compound annual rate to $6.2 billion in 2010 from $4.6 billion in 2005."
• "Countries in Latin America are supporting local production through various subsidy programs. As the experience of 2004-05 indicates, the success of local films can have a dramatic impact on the overall market."

"In Canada sell-through growth will average 4.9 percent compounded annually to $3.8 billion, and rentals will be flat at $1.3 billion."


Television Networks: Broadcast and Cable

The television network market consists of advertiser spending on broadcast and cable networks, plus other sources of revenue that vary by region. In North America, the television network market includes license fees paid by cable systems and satellite providers to basic and premium cable networks. In EMEA (Europe, Middle East, Africa) and Asia Pacific it includes public TV license fees. Net advertising figures, consisting of spending less agency commissions and discounts, are tracked in EMEA, Asia Pacific, Latin America, and Canada. Advertising in the U.S. is reported with agency commissions included, as is customary. The television distribution market is covered in a separate chapter.

Multichannel advertising refers to advertising on networks that are accessed by viewers via cable (analog or digital), satellite, digital terrestrial television (DTT), or other means but that are not otherwise available without these services. Terrestrial advertising refers to advertising generated by free-to-air broadcast networks, even if viewers may receive such networks through a cable, satellite, or DTT service.

Global facts and forecasts:
 

• "In the U.S. digital video recorders (DVRs), digital television, and high-definition television (HDTV) will enhance the appeal of television, leading to increased viewership and advertising."
• "The United Kingdom and Germany are the two largest markets in EMEA, at $10.7 billion and $10.1 billion, respectively, in 2005. Italy ranks third, at $7.8 billion, and we expect it will reach the $10-billion threshold in 2010."
• "Japan is the dominant country in Asia Pacific in terms of value, at $19.7 billion in 2005, equivalent to 54 percent of total spending. Japan is slowly emerging from its long-term economic slump, and its television network market will expand at a 3.9 percent annual rate through 2010, a significant improvement compared with the 0.2 percent growth compounded annually during the past few years."
• "Venezuela will be the fastest-growing market in Latin America, at 14 percent compounded annually, but growth will be artificially augmented by continued high inflation, a factor no longer present to a significant degree in the rest of the region."

"The television network market in Canada will expand at a relatively steady 4.3 percent compound annual rate to $4.5 billion in 2010 from $3.7 billion in 2005."

Television Distribution

The television distribution market consists of revenues generated by distributors of television programming to viewers. It includes spending by consumers on subscriptions to basic and premium channels accessed from cable operators, satellite providers, or Internet protocol television (IPTV) services, as well as on video-on-demand (VOD). In the United States, EMEA (Europe, Middle East, Africa), and Canada, it also includes pay-per-view. VOD operates through a server and enables viewers to access a program at any time. Pay-per-view uses dedicated channels to show films at scheduled intervals. In the United States, advertising on local TV stations and local cable systems is also included.

Global facts and forecasts:

• "In the U.S. VOD will be the fastest-growing category, at 22.0 percent compounded annually, and will grow to $3.9 billion in 2010."
• "Italy will be the fastest-growing country in EMEA, with 22.9 percent compound annual growth, fueled by a rapidly expanding satellite market and growing IPTV."
• "In Asia Pacific Hong Kong has been the fastest-growing market during the past two years, more than doubling as a result of the introduction of new channels and a developing IPTV market. Although Hong Kong constituted less than 1 percent of all subscription households in Asia Pacific in 2005, it accounted for 57 percent of the region’s IPTV households."
• "The TV distribution market in Latin America, regardless of distribution platform, has been gaining momentum during the past three years and will post double-digit increases beginning in 2006 that will extend through 2009 before dropping to a high-single digit gain in 2010."

"In Canada, buoyed by the revitalization of cable, VOD is taking off and by 2009 will generate more revenue than pay-per-view will."

Recorded Music

The recorded music market consists of consumer spending on album and single sound recordings and music videos distributed in traditional formats and sold in record stores, including compact discs and cassette tapes. It also includes licensed digital distribution services that provide electronic files for use on computers, iPod devices, and MP3 players, as well as mobile music. Mobile music is music distributed to mobile phones through wireless carriers. Mobile music may be in the form of ring tones, which are monophonic or polyphonic tones that play aloud when the phone rings; or ring backs, which are ring tones or actual songs that the caller hears when a call is placed; or ring tunes, also known as master ring tones and true tones, which are either portions of or an entire actual music track with full vocals and orchestrations, heard either when the phone rings or as a ring back; or music video clips.

Global facts and forecasts:

• "Licensed digital distribution will rise from $653 million in 2005 to $4.9 billion in 2010, a 49.5 percent compound annual increase. From a 5 percent share in 2005, digital distribution will constitute 33 percent of recorded music spending in 2010."
• "The launch of new digital distribution services and growth in the number of broadband Internet subscribers in EMEA will fuel digital download spending."
• "In Asia Pacific piracy will continue to cut into sales, but improved enforcement, combined with an increasingly more sophisticated and enabled economy, will lessen its incremental impact as antipiracy efforts begin to yield results."
• "In Latin America antipiracy initiatives are beginning to yield results, and although still a major problem, piracy will have less of an adverse incremental impact on unit sales."

"New services and an expanding broadband market in Canada will boost licensed digital distribution services."