International Media Behind and Ahead

1
International Media Behind and Ahead
Communications Studies 197C Sept. 13, 2004
2
Large International Revenue Base
3
Fragmented International Revenues
4
International Markets

• Market Size 200MM
• large enough revenue
• Big enough sponsor/ad markets
• China
• India
• US
• Russia

5
International Market Snapshot
Source MPA
6
2003 Admissions per Capita U.S. vs Top 10
Territories
5.4
4.5
3.2
2.9
2.9
2.4
1.8
1.5
1.3
1.3
0.6
Source Local Market Estimates Informa Media
Group (Italy)
7
Big Mac Index vs. Movie TicketU.S. vs Top
Territories
Source Local Market Estimates, MPA, The Economist
8
2002-2003 Change in Box Office Top 10 Intl.
Markets(Local Currencies)
Source Local Market Estimates
9
Gross Box Office International vs. Domestic(US
Billions)
Source MPA
10
Top 10 International Markets2003 MPA Theatrical
Revenue(US)
of Territory International
Revenue Japan 13.7 449,913,339
Germany 12.0 391,840,392 United
Kingdom 10.5 344,323,525 Spain 7.6
248,157,567 France 7.4 241,717,137
Australia 5.1 166,381,322 Italy 4.7
153,867,264 Mexico 3.8 124,844,163 South
Korea 2.5 81,601,945 Brazil 2.4 80,080,14
8 Total Top 10 69.8 2,282,726,802
Source MPA
11
2003 Intl Gross Box OfficeBy Distributor
(US Billions)
Source Hollywood Reporter
12
International Television

• Each market is different
• Different mix of channels, cable, and satellite
  alternatives
• Different concentrations
• Different demographics, population, disposable
  income, and ad markets
• Different ownership
• Different local content
• Different relationship with US marketplace
• Syndication of shows
• Syndication of concepts (e.g. reality shows)
• Source or consumer of concepts (e.g. UK and
  Scandinavia)

13
Viva la Difference! -- Spain
Source Media Planning
14
Viva la Difference! United Kingdom
Source Broadcasters' Audience Research Board
15
Viva la Difference! -- Australia
Source OzTAM, 9/14-20/03
16
Viva la Difference! -- Italy
Source AuditelRAI public, three channels --
RAI 1, 2, 3Mediaset private, three channels --
Canale 5, Italia 1, Rete 4
17
International Distributors
18
International Theater Growth

• Between 1997 and 2002, the number of screens
  worldwide grew by nearly 12 (2.3 CAGR), though
  flat in 2002.
• Digital cinema screens are growing in some areas
  and are expected to increase significantly
• Increase in Day and Date releases due to piracy
• XMenII Largest Day and Date release schedule

19
Global Film Markets Monetizing Bets Scale
Challenges
Source MPA
20
Many tickets sold to reach 40 of Box Office
Internationally
21
Example 1 Harry Potter 2
Source Variety
22
Example 2 Oceans Eleven
Source Variety
23
Production/Year More Than You Think

• U.S. Majors about 200
• U.S. Independents about 225
• China about 100
• India about 800

24
International is not the Same

• Comedy -- weak
• Stars Action/Adventure
• Contracts often based on box office in U.S.

25
Growing DVD sales overseas
Source International Recording Media Association
26
UK Digital TV Wars

• Sky -- announced free-to-air digital satellite
  service
• Home of interactive TV
• 150 upfront fee can upgrade to subscription
• BBC announced Freeview is in 4 million UK HH
• Interactive Challenge to digital terrestrial
• Govt goal switch off analogue by 2010
• Source New Media Age. London Jun 24, 2004.

27
Brazil

• News Corp, w/DirecTV control of 2 sat. TV
  operators in Latin America
• Monopoly in Brazil
• Both large losses DirecTV Latin Am. 202MM loss
  Sky Brasil 386MM loss 2002
• ''Together, Sky and DirecTV in Brazil would have
  a 95 percent share of the market, a huge
  concentration of power,'' said Paulo Roberto
  Hisse de Castro, partner and director of
  marketing and new business at TecSat, the
  direct-to-home operator with the remaining 5
  percent.

28
Pan European Cable Channels

• Eurosport the most widely available channel in
  Europe
• 98 million homes and 250 million viewers in 54
  countries
• over 96 of Eurosport's viewers can watch their
  favorite sports in their native language
• RTL Group (Bertelsmann)
• 26 TV channels, 24 radio stations, 9 European
  countries
• US 3 billion in revenue

29
Future International Direction?

• Digital distribution enhancement of ability to
  distribute across languages?
• Further consolidation, but instead between
  countries (e.g. EU-driven)?
• Broadening international voice of world music?
• Further barbell effect tentpoles and very small
  films enhanced by capital markets?
• Competition for production spending causing major
  tax incentives transfers of wealth from govts
  to creative communitiesfor a while?
• Changing of established distribution carriers
  often based on publishing and broadcast wealth --
  due to satellite? Mobile phone? Internet?