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Spotlight on the Global Audiovisual Sector
The audiovisual sector has various dimensions but from an economic and business perspective it is useful to categorize the industry in terms of the ?nancial and trade ?ows associated with goods, services and intellectual property. A DVD is an audiovisual good, while advertisements and radio broadcastings are considered services and ?lms also generate income through copyright. The audiovisual industry involves the production of feature ?lms, documentaries, television dramas, sit-coms, animation, commercials and music videos to name a few. The World Trade Organization’s classi?cation goes further to include radio, advertising services, transmission services and sound recording.
The audiovisual industry as a whole is now on a long term path of transitioning from a traditional, linear "of?ine" distribution model that has served it well for the better part of a century, to an emerging digital future that will increasingly be depending on a connected world requiring on demand experiences.
ITVE, Global Audiovisual Market, 2009-2013
The global audiovisual market which is valued at US$ 471 billion in 2009 is projected to grow to $550 billion in 2013 despite the ongoing ?nancial and economic recession. What the data (see ?gure 1) indicates is that television will remain the dominant source of income with a steady eighty per cent of the market; ?lmed entertainment appears to have peaked and is trending downward slowly; online video is growing rapidly but from a low base. However, below the surface there are tectonic shifts that are impacting the structure of the industry and the viability of business models. Advertising revenue in television is slowing down but Pay TV is rising; traditional cinema is declining while alternative content in cinemas is growing; digital ?lm and online distribution is expanding rapidly but is insuf?cient to offset the drop in traditional revenue streams. The global cinema market remains highly concentrated even with the growth of world cinema. It is estimated that 5 countries (US 36%, Japan 7%, India 6%, France 5%, UK 4%) account for ?fty-eight per cent of worldwide box of?ce revenues (see ?gure 2). Similarly, in the realm of Pay TV the top ?fteen markets account for ninety per cent of global revenues with the US alone capturing ?fty-four per cent of global subscriptions. What is interesting to note is that among the top markets are large developing economies like China, Brazil, India, Argentina and Mexico. The rest of the world accounts for eleven per cent of the global market. So where does this leave ?lm industries from developing countries, especially from small states? The new technologies offer an opportunity for enhanced production but the cost of marketing and distribution can still be prohibitive. For small states, domestic and regional markets are often too small for ?rms in the sector to achieve economies of scale and scope, hence the need for a strong export orientation from the outset. So where are the opportunities? At the same time that traditional markets are declining new market opportunities are arising for new forms of content and alternative genres. Seizing the chance requires foresighting and the implementation of innovation and industrial policies. Linking with entrepreneurs and organizations in the diasporas is a critical resource in the new marketing thrust. Diasporas are both markets as well as levers to enter global markets. At home the entrepreneurs and the facilitating agencies need to be on cue with the quality and professionalism issues. Enhanced training, venture capital funding and intellectual property protection and promotion are but a short list of achievable requirements for making it in the global AV sector
Figure 1: Global Audiovisual Market, 2009-2013. Source: International Television Expert Group
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Figure 2: Worldwide Box Of?ce Revenues, 2009. Source: Dataxis Intelligence
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Volume 1 September - November 2010