The Sound of Success _2_

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					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,
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 through more than
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 For more information, visit
 www.ibisworld.com or call
 1-800-330-3772.




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