The Music and Entertainment Industry

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The entertainment industry, also informally known as “show business,” is a crucial part of the global economy and includes a large number of subsectors. The term is often used to describe communications companies that control the production and distribution of content in various formats.

But in reality, this expression connotes commercially popular performing arts and is applied to film, television, radio, theater, and music.

THE SIZE AND SCOPE OF THE

ENTERTAINMENT INDUSTRY TODAY

The entertainment industry has benefited from the proliferation of digital applications and platforms. In this sense, the internet has triggered a revolution in human life, so now it is possible to have information and entertainment just a click away: we can find anything on the internet.

This tool has created a source of entertainment for all generations and thanks to it we have access to all the content we can imagine, no matter where or when we want to consult it.

Now more than ever it is easier to produce, distribute and consume content: the technology behind it all transforms the way we live in the 21st century.

In 2016 alone, the global media and entertainment (M&E) market, that is, the entertainment industry, reached US $ 1.9 trillion in revenue and is estimated to have grown by almost 5% to reach just under US $ 2 trillion in 2017.

Source:  United States Department of Commerce.

https://www.trade.gov/topmarkets/pdf/ Top% 20Markets% 20Media% 20and% 20Entertinment% 202017.pdf 

FACTS AND NUMBERS

In 2016, China, with a value of US $ 190 billion, became the second largest market after the United States, with a value of US $ 712 billion, followed by Japan with US $ 157 billion, Germany with US $ 97 billion and the United Kingdom with US $ 96 billion. France came in sixth place, worth US $ 69.3 billion.

For their part, the six largest Latin American M&E markets together reached US $ 96,000 in 2016. The M&E market is mainly made up of small companies, but large corporations, often diversified within the digital and technology sectors, dominate the industry.

Source: United States Department of Commerce.

https://www.trade.gov/topmarkets/pdf/Top%20Markets%20Media%20and%20Entertinment%202017.pdf

Digital income represents 50% of global income today.

The global market for recorded music grew by 5.9% in 2016, the highest rate since the International Federation of the Phonographic Industry (IFPI) began analyzing the market in 1997, according to the Global Report of Music 2017 made by IFPI.

Total revenue for 2016 was $ 15.7 billion.

At the end of 2016, there were 112 million users of paid music streaming subscriptions generating annual streaming revenue growth of 60.4%.

Digital revenue accounted for, for the first time, half of the total revenue generated last year by the recorded music industry globally.

Online streaming services are helping drive growth in developing music markets. China has grown 20.3%, India 26.2% and Mexico 23.6%, this outlook reveals strong growth in revenues.

Record companies have driven this revenue growth through continued investment not just in artists, but also in the systems that host digital platforms. This has allowed the authorized distribution of more than 40 million tracks on hundreds of services.

KEY INDICATORS

5.9%

Global revenue growth

50%

Digital share of global revenue

17.7%

Digital revenue growth

60.4%

Online streaming service revenue growth

-7.6%

Income from the sale of physical copies:

-20.5%

Income from downloads of music products:

Source: International Federation of the Phonographic Industry http://www.ifpi.org/news/IFPI-GLOBAL-MUSIC-REPORT-2017

SPONSORSHIPS, CONCERTS, TICKETS, MERCHANDISE AND SALARIES

The global music business, at least what is copyrighted, is worth more than $ 25 billion. It’s actually worth $ 25.3 billion, according to Will Page, Spotify’s chief financial officer. The estimate is calculated from the data that can be consulted in the reports of the IFPI, which covers audio recordings, and the International Confederation of

Societies of Authors and Composers (CISAC), which covers musical works.

The revenues of some publishing companies dedicated to the distribution of musical pieces are hidden from the public view and therefore are not included in the CISAC report. Revenues from direct licenses to transmit or distribute music represent $ 1.7 billion, according to a report by MIDia Research, a company dedicated to studying the

entertainment industry .

On the other hand, revenues of $ 423 million in royalties collected outside of CISAC by organizations such as the Harry Fox Agency were also accounted for. In addition, IFPI sales figures also include royalties paid to record companies, which are counted as income, and then paid to publishers, where they are also accounted for as income.

For music, the study of cultural and creative industries quantifies the impact of sound recordings, the business of distribution of recorded music and live events, in terms of income and employment.

In this way, the estimated figure of $ 25.3 billion is an income calculated solely from what is generated by the concept of copyright in music. This item includes both purchases and transmissions of recorded music and is made up of the sale of musical pieces, their performance or transmission on any platform, and the appearance of a piece in an advertisement, video or film. It is a compact and easy to understand number. If the music business were a series of concentric circles, revenue from music copyright would be at the center.

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