WWW.IBISWORLD.COM SpecialReportOctober 2010 1 Special Report TheSoundOfSuccess October 2010 The sound of success Glee, American Idol and other music-based TV shows boost industry sales Agata Kaczanowska, entertainment industry analyst Kathleen Ripley, music industry analyst With 75 singles from the hit TV show Glee landing on the Billboard Hot 100 chart – breaking the Beatles’ record for most songs by a group act – music-based TV is proving to be big business for many associated industries. In fact, the television production and forecast to grow at an annualized rate television broadcasting industries will of 3.8% to total $41.8 billion. earn 5.5% of their 2010 revenue from music-related content. Channels like Major Label Music Production MTV and CMT contribute to this While major labels have been struggling revenue; however, the fastest growth with diminishing revenue in the digital comes from primetime music-focused age, they have been benefiting from programming, including shows like strategic partnerships with some of TV’s American Idol and Glee. hottest shows. The industry’s revenue is estimated to have fallen by 9.7% per year Television Production over the five years to 2010, while revenue Musical television is expected to garner from TV deals has grown 15.3% during $1.7 billion in production revenue this the same period. year and is anticipated to grow at an The Emmy-winning series Glee has annualized rate of 5.8% over the five sold more than 11.5 million digital music years to 2015 to $2.2 billion. This is downloads as of October 2010, significant growth considering that the according to Billboard. Sony, which has television production industry as a whole licensing rights to American Idol is expected to increase at an average through 2010, has partnered with Fox annual rate of 3.3% during this time to TV as Glee’s record label under an total $36.2 billion in 2015. all-encompassing deal. The deal gives Sony rights to release all of the show’s Television Broadcasting music (digital and physical); the first Expected to earn $1.9 billion in rights to recording contracts with the television broadcasting revenue in show’s cast; and a percentage of sales 2010, music-focused television is from merchandising, endorsements, projected to grow at an average rate of ringtones and live shows. These “360” 6.4% per year to total $2.5 billion in deals have been growing in popularity 2015. Over the same time the television over the past five years, as the recording broadcasting industry as a whole is industry has been clamoring to create www.ibisworld.com|1-800-330-3772|info @ibisworld.com WWW.IBISWORLD.COM SpecialReportOctober 2010 2 TheSoundOfSuccess new revenue streams in the face of Music licensing is extremely profitable plummeting CD sales. for publishers. The show pays publishers The week after Glee dedicated an a synchronization fee to record the song episode to the music of Madonna, the and then under the licensing contract show’s soundtrack debuted at the top of must pay royalties for every time the the Billboard 200 chart. The show also song is aired, downloaded or sold in a boosted sales of Madonna’s new concert physical album. This revenue stream is CD released a week prior and brought her propagated over a longer period of time greatest hits album, Celebration (released than the music production side. in 2009), back onto the chart, ranking at number 86. Britney Spears album sales Concert promotion experienced a similar boost in September. In 2010, approximately 1.0% (or $215 Her latest release “The Singles Collection” million) of the live music, sports and (which was released Nov. 2009) re- event promotion industry’s revenue will entered the billboard Top 200 album come from the concert tours associated chart after her appearance on Glee. with popular music-related TV shows and their stars. Music Publishing Glee’s summer 2010 tour was The publishing arms of major labels have originally intended to include seven been outperforming their production shows, but due to high demand, six counterparts, growing at an average more were added. All 13 shows sold out, annual rate of 1.92% over the five years to and the four-city tour grossed an 2010. IBISWorld estimates publishing impressive $5.03 million, according revenue from television partnerships and to Billboard. licensing is growing at an even faster American Idols Live, promoted by average rate of 8.7% over the same concert giant Live Nation period, and a 9.7% per year increase is Entertainment, was the 28th best forecast over the five years to 2015. grossing tour of the past decade Therefore, Glee is a gold mine for (2000-2009), according to Pollstar, at music publishers that own copyrights. $156.8 million gross revenue. TotalRevenuefrom MusicTelevision Industry ($ millions) Description 2010 2015 5-year CAGR* Live Music, Sports $215 $457 16.3% Concert promotion for current TV shows (e.g. American and Event Promotion Idol, Glee) as well as alumni (e.g. Adam Lambert, Carrie Underwood) Major Label Music $120 $245 15.3% Current TV singles, soundtracks and recording contracts Production with TV stars (e.g. Kelly Clarkson, Susan Boyle) Music Publishing $467 $744 9.7% All music featured on TV Television $1,913 $2,594 6.3% Music-specific channels and shows featuring music Broadcasting Television Production $1,696 $2,244 5.8% Music-specific channels and shows featuring music Beauty, Cosmetics $223 $259 3.1% Celebrity-sponsored perfumes and Fragrance Stores * Compound annual growth rate WWW.IBISWORLD.COM SpecialReportOctober 2010 3 TheSoundOfSuccess Additional industries watch the show religiously and flocked to About IBISWorld, Inc. Other industries that benefit from the the concert series. Such avid vocal and Recognized as the nation’s marriage of TV and music entertainment financial support may entice celebrities most trusted independent include movie production and industries such as Bruce Springsteen or Beyoncé source of industry and with celebrity-sponsored products, like onto the show. In fact, “gleeks” are so market research, IBISWorld perfume (part of the Beauty, Cosmetics pepped that there is a Glee-based reality offers a comprehensive and Fragrance stores industry). show in the making. Furthermore, database of unique Simon Cowell’s X Factor is also due to information and analysis on Can’t stop the music premier in the US next season and every U.S. industry. With an Audiences cannot seem to get enough of Universal has taken over American Idol extensive online portfolio, Glee; they download the featured songs, in hopes of making it bigger than ever. valued for its depth and scope, the company equips clients with the insight necessary to make better business decisions. Headquartered in Los Angeles, IBISWorld serves a range of business, professional service and government organizations through more than 10 locations worldwide. For more information, visit www.ibisworld.com or call 1-800-330-3772. Contact: SavannahHaspel Vice President – Public Relations IBISWorld Phone: (310) 866-5044 email@example.com www.ibisworld.com www.ibisworld.com|1-800-330-3772|info @ibisworld.com At IBISWorld we know that industry intelligence is more than assembling facts. 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