ON THE LOOKOUT FOR GROWTH AUTHORS ROYALTIES IN 2011

ON THE LOOKOUT FOR GROWTH AUTHORS ROYALTIES IN 2011

CONTENTS PAGE 5 PART ONE OVERALL PICTURE AND TRENDS IN ROYALTY COLLECTIONS 2011 PAGE 12 PART TWO AN ECONOMIC PERSPECTIVE ON COLLECTIONS PAGE 14 PART THREE CISAC S OUTLOOK ON END USER CREATIVE SECTOR MARKETS PAGE 23 METHODOLOGY DETAILED METHODOLOGY STATEMENT 02

KEY NUMBERS IN 2011 EXECUTIVE SUMMARY 7. 6 60% 88% This survey provides a detailed analysis of the global royalty collections of the 231 member societies in 121 countries of CISAC (International Confederation of Societies of Authors and Composers) in 2011. Billion in total collections of the 231 CISAC member societies in 2011 Collections ( 4.5bn) made in Europe Musical repertoire accounted for 88% of collections ( 6.7bn) The figures presented in it provide a snapshot of the economic situation of authors rights worldwide and highlight the significant trends by type of rights, by repertoire and by geographical region. 75% 1.6% 55% PART ONE Overall picture and trends in royalty collections 2011 Collections ( 5.7bn) from public performance royalties Performing rights collections amount to1.6% of the global advertising market Growth in collections from digital channels to 205 million PART TWO An economic perspective on collections PART THREE CISAC s outlook on end user creative sector markets 1/3 7% 1% METHODOLOGY The report contains a detailed methodology statement on page 23. Radio and television remain the predominant source of revenues for creators across the globe (one third of total royalties collected by authors societies) Authors royalties from music phonographic and live performance amount to 7% of the total size of the global music industry (retail value recorded music and live) Growth in total worldwide collections made from 2010 to 2011 (in current ) 03

A NOTE ON CISAC AUTHORS ROYALTY COLLECTIONS CISAC the International Confederation of Societies of Authors and Composers aims to increase both the protection and the promotion of creators rights worldwide. As the leading worldwide network of authors societies, CISAC enables collective management organisations to seamlessly represent creators across the globe and ensure that royalties flow to authors for the use of their works anywhere in the world. To this end, CISAC provides the highest business, legal and IT standards to protect creators rights and to support the development of the international network of collective management societies. The CISAC survey shows a steady increase in the societies collections over the last 8 years since 2003 and a growth over that period of 23%, illustrating the viability and resilience of the collective management of authors rights. The growth in collections in 2011 out paced GDP growth in 50 of the territories surveyed, demonstrating the added value to the economies of the creative sector in those countries and the solidity of the network of authors societies. Efforts continue by the authors societies and performing rights organisations around the world to reduce their administration costs and to expand their coverage of the various forms of use of creative works across all repertoires. New uses of copyrighted works particularly in the digital sector, enabled the societies to increase the amount of royalties distributed to rights owners despite the current economic pressures. A new feature in this 2011 report is CISAC s outlook on end user creative sector markets. CISAC has done this in order to place the royalty collections figures in a strategic context and to provide a broad understanding of the trends driving those sectors that provide the source of royalties. This section looks at the main trends over the next few years as an indication of factors underpinning the health of authors royalties. The figures presented in this survey cover only the royalties collected in 2011 by authors societies which are CISAC members for the use of the global repertoire in their respective territories and thus do not cover all the royalties distributed to creators. International exchanges between sister societies (royalties that the societies may receive for use outside each society s own national territory) are excluded. In addition, the royalties collected directly by music publishers for songwriters and composers (like most synchronisation royalties) do not come within the scope of the survey. More details on methodology can be found on page 22. 04

PART ONE OVERALL PICTURE AND TRENDS IN ROYALTY COLLECTIONS 2011 Total royalty collections reached another all time high at 7.6 billion in 2011, though overall growth in collections has slowed to 1%. Public performance royalty collections grew by 2.2% in 2011 to 5.7 billion, but this was countered by drop in mechanical royalties of 4.8% to 1.4 billion. As a result of these changes public performance now represents 75% of total collections. The growth in public performance was driven by growth in Radio and Television, which contributed to over two fifths of the growth in total collections. Digital (which grew by 55%) contributed to nearly one third of total public performance growth. Cable and satellite also helped to drive growth. Following a slight recovery in 2010, mechanical royalties returned to the long term trend reflected by the decline in physical recorded music sales and as a result now make up less than one fifth of global collections. 7. 6 BILLION IN TOTAL COLLECTIONS OF THE 231 CISAC MEMBER SOCIETIES IN 2011 Among the other types of rights, private copying fell back (by 20%) following a similar increase last year. However other rights (Reprography; Resale Right; Lending Right) grew overall in 2011 due to a number of new societies reporting these rights to CISAC for the first time. 05

FIGURE 1 LONG TERM TREND IN GLOBAL COLLECTIONS ( m) FIGURE 2 TREND IN COLLECTIONS BY REGION ( m) 2001 2002 2003 6,495 6,321 6,157 2009 AFRICA LATIN AMERICA ASIA PACIFIC CANADA US EUROPE 42 248 987 1,369 4,487 2004 6,502 2005 2006 2007 6,776 6,987 7,141 2010 AFRICA LATIN AMERICA ASIA PACIFIC CANADA US EUROPE 49 303 1,123 1,449 4,591 2008 7,035 2009 7,133 2010 2011 7,514 7,584 2011 AFRICA LATIN AMERICA ASIA PACIFIC CANADA US EUROPE 44 365 1,270 1,368 4,537 Although 2011 represents another record high in overall royalty collections, growth has slowed to 1% (in current ). The bulk of collections continue to come from Europe. However Asia Pacific and Latin America continue to account for a larger share each year. 06

FIGURE 3 SHARE OF COLLECTIONS IN 2011: BY REGION LATIN AMERICA 4.8% ASIA PACIFIC 16.7% 0.6% AFRICA 59.8% EUROPE CANADA USA 18.0% PUBLIC PERFORMANCE MECHANICAL REPRODUCTION OTHER RIGHTS Europe represents 60% of worldwide royalty collections. Collections from the Asia Pacific region now contribute to a share of worldwide collections comparable with Canada/USA. FIGURE 4 TREND IN COLLECTIONS BY TYPE OF RIGHTS ( m) 5,174 5,536 5,658 1,466 1,506 1,434 501 447 493 2009 75% 2010 2011 COLLECTIONS ( 5.7BN) WERE FROM PUBLIC PERFORMANCE ROYALTIES Public performance rights continue to grow while Mechanical rights fell back after a rebound in 2010. Other Rights includes: Private Copying; Reprography; Resale Right; Lending Right. 07

FIGURE 5 FIGURE 6 SHARE OF COLLECTIONS BY TYPE OF RIGHTS IN 2011: GLOBAL SHARE OF COLLECTIONS BY TYPE OF RIGHTS IN 2011: BY REGION 18% 7% 13% 2% EUROPE 75% CANADA-USA 85% 6.5% OTHER RIGHTS 18.9% MECHANICAL REPRODUCTION 6% 7% 8% GLOBAL 74.6% PUBLIC PERFORMANCE LATIN AMERICA 94% AFRICA 85% 9% 33% ASIA-PACIFIC 57% Public performance rights now make up three quarters of global royalty collections. Public performance rights make up the vast majority of royalty collections in all regions except Asia pacific where Mechanical royalties make up one third of collections (the majority of this from DVD and CD royalties). PUBLIC PERFORMANCE MECHANICAL REPRODUCTIONS OTHER RIGHTS 08

FIGURE 7 FIGURE 8 ORIGIN OF RIGHTS BY SECTOR IN 2011: GLOBAL ORIGIN OF PUBLIC PERFORMANCE RIGHTS BY SECTOR IN 2011: GLOBAL OTHER 16% DIGITAL 3% VIDEO & CINEMA 4% 32% RADIO & TV DIGITAL 2.2% OTHER 10.4% LIVE MUSIC & THEATRE 13.7% 1.6% CINEMA 39.1% RADIO & TV LIVE MUSIC & THEATRE 10% CABLE & SATELLITE 12% 22% PHONO CABLE & SATELLITE 16.2% 16.9% PHONO ANALYSIS BY TYPE OF RIGHTS Radio and television is the predominant source of creative royalties across the globe, followed by phonographic recorded music rights. Digital rights only make up 3% of global collections. Distinctive regional variations from the worldwide picture in the origin of rights include: A significant share of royalties represented by cable and satellite in North America (23% in Canada/USA) Video and cinema generate sizeable collections (13%) in Asia Other Rights in Asia at 37% driven by the sizeable contribution of Karaoke and Interactive Transmissions in Japan Live entertainment (music, theatre) are particularly significant in Latin America (21%) and Europe (14%) Radio and television is the predominant source of public performance royalties across the globe, followed by a fairly even contribution by phonographic recorded music rights, cable and satellite. Digital rights only make up 2.2% of global collections. 09

FIGURE 9 REGIONAL GROWTH IN PUBLIC PERFORMING RIGHTS 2010 2011 MARKET SHARE GROWTH EUROPE 60% 2% CANADA USA 20% 4% ASIA PACIFIC 13% 9% 88% LATIN AMERICA 6% 25% AFRICA 1% 3% MUSICAL REPERTOIRE ACCOUNTED FOR 88% OF COLLECTIONS ( 6.7BN) Although Europe has a 60% share of performing rights collections, growth is slowing as the market matures. On the other hand, despite the small share for Asia Pacific and Latin America, growth in performing rights is strong in these regions driven by TV & Radio and Digital. 10

FIGURE 10 DRIVERS OF GROWTH IN PUBLIC PERFORMANCE (contribution to global growth by value) TV & RADIO 44% DIGITAL 30% CABLE & SATELLITE 26% Overall, the growth in public performance was driven by a combination of Radio & TV, Cable & Satellite and Digital. Digital growth was especially strong in Europe and Asia Cable s contribution to growth came from Canada/USA, Asia and Europe TV & Radio grew particularly strongly in Asia and Latin America and was steady in Europe FIGURE 11 ORIGIN OF COLLECTIONS BY REPERTOIRE WORLDWIDE PICTURE 2011 2% DRAMATIC LITERARY 3% AUDIOVISUAL 6% 1% VISUAL ARTS ANALYSIS BY REPERTOIRE Some 88% ( 6.7 billion) of collections are from music repertoire. This is the result of the music sector s reliance on collective management for many types of rights when compared to other sectors, where most uses are negotiated and licensed directly by the creator, producer or publisher. 88% MUSICAL Music has a wide variety of uses and has historically built up a mature infrastructure of collections. Partly as a result of this maturity, musical repertoire remained flat in 2011. However, the other repertoires totalling 917 million grew in 2011 by nearly 8%, largely Musical Works make up the vast majority driven by a substantial increase in Literary of collections across the globe, with other Works as new societies joined CISAC. repertoires making up 12% of collections overall. 11

FIGURE 1 FIGURE 2 ANNUAL COLLECTIONS PER HEAD OF POPULATION ( per capita) ANNUAL COLLECTIONS PER GDP/CAPITA IN MAJOR COUNTRIES (ranking) PART TWO AN ECONOMIC PERSPECTIVE ON COLLECTIONS FRANCE UNITED STATES GERMANY BRAZIL ITALY JAPAN RUSSIAN FEDERATION UNITED KINGDOM SPAIN POLAND ARGENTINA AUSTRALIA SOUTH AFRICA CANADA HUNGARY MEXICO INDIA NETHERLANDS ROMANIA BELGIUM SWITZERLAND SERBIA CZECH REPUBLIC COLOMBIA DENMARK REPUBLIC OF KOREA AUSTRIA KENYA CHINA PORTUGAL TURKEY GREECE CHILE SWEDEN UKRAINE CROATIA FINLAND VENEZUELA MALAYSIA NORWAY Source: CISAC, World Bank 2012 39 (27 from Europe) countries exceed the world average figure of 1.1 collected by per head of population. Western Europe remains the region in which the average annual collections per head of population are the highest (above 6 per capita), as well as Australia, Japan and Canada. Source: CISAC, World Bank 2012 This indicates the performance of authors royalty collections by country according to total spending per head of population and so takes into account purchasing power parity or the relative wealth of inhabitants within countries. It is interesting that the BRICS economies emerge within this measure these are highlighted in green. There is a potential for growth of authors rights in the BRICS countries as their economies grow, particularly if the legislation and collective management is in place and properly implemented. 12

FIGURE 3 ANNUAL GROWTH IN GDP IN THE TOP 20 TERRITORIES FOR COLLECTIONS GDP GROWTH 1% 2% 3% 4% 5% 6% 7% 8% ARGENTINA RUSSIAN FEDERATION POLAND SWEDEN GERMANY 60% REPUBLIC OF KOREA AUSTRIA BRAZIL CANADA FRANCE SWITZERLAND UNITED STATES BELGIUM NETHERLANDS DENMARK COLLECTIONS ( 4.5BN) MADE IN EUROPE AUSTRALIA SPAIN UNITED KINGDOM ITALY JAPAN The chart shows the biggest markets for collections ranked by GDP growth in 2011. Territories marked in green saw growth in royalty collections outpace growth GDP in 2011. In the case of UK and Japan these territories saw a growth in collections despite flat and falling GDP. Source: CISAC, World Bank 2012 13

PART THREE CISAC S OUTLOOK ON CREATIVE SECTOR MARKETS The purpose of this section is to provide both a snapshot and outlook for each of the major source sectors of creative royalties, with very brief observations on the data from the perspective of collections. CISAC has done this in order to place the royalty collections figures in a strategic context and to provide a broad understanding of the trends driving those sectors that provide the source of royalties. Authors royalties are driven by advertising spending in the media sectors, particularly in TV, radio and via the internet. TV and radio are the predominant source of revenues for creators, representing 32% of royalty collections worldwide. Even though digital makes up just 3% of collections in 2011, digital will be the key source of future growth and this section highlights the digitally driven trends in the key sectors of advertising, TV, radio, music and film. CISAC has drawn from ZenithOptimedia s Advertising Expenditure Forecasts September 2012, PwC Global Entertainment and Media Outlook: 2012 2016 and other sources in order to place a broader context on the 2011 royalty collections data. 1.6% PERFORMING RIGHTS COLLECTIONS AMOUNT TO 1.6% OF THE GLOBAL ADVERTISING MARKET 14

FIGURE 1 TOTAL ADVERTISING REVENUES BY REGION 2011 2013 (ZENITHOPTIMEDIA) 2011 m GLOBAL ADVERTISING ZenithOptimedia predicts global advertising expenditure will grow by 3.8% in 2012 and again by 4.6% in 2013, reaching US$525 billion ( 380 billion) by the end of that year. As has been the case since the economic downturn began in 2007, advertising growth is being led by developing markets, which Zenith forecasts to grow by 8% in 2013. Central & Eastern Europe is expected to recover from a tough 2012 with 7.4% growth in advertising expenditure in 2013, while Asia Pacific (excluding Japan) will grow by 8.2% and Latin America by 10.1%. Key market drivers in Advertising: European football championships, the Olympics and US elections helped drive television advertising to a record share of global ad spend in 2012 Growth in internet and digital advertising expenditure, increasing by 15% in 2013 Developing markets to grow by 8% in 2013 with Asia Pacific and Latin America taking an increasing share of the global total REST OF WORLD 8,340 MIDDLE EAST & NORTH AFRICA 2,989 LATIN AMERICA 25,427 ASIA PACIFIC 95,088 EUROPE 97,0 06 NORTH AMERICA 118,780 GLOBAL 347,630 GROWTH 3.8% 2012 REST OF WORLD 8,864 MIDDLE EAST & NORTH AFRICA 3,020 LATIN AMERICA 27,396 ASIA PACIFIC 100,995 EUROPE 96,774 NORTH AMERICA 123,769 GLOBAL 360,818 GROWTH 3.8% 2013 REST OF WORLD 9,689 MIDDLE EAST & NORTH AFRICA 3,103 LATIN AMERICA 30,169 ASIA PACIFIC 106,779 EUROPE 99,468 NORTH AMERICA 128,283 GLOBAL 377,491 GROWTH 4.6% Eurozone ad expenditure to return to growth in 2013 after decline in 2012 N.B. Other sources of advertising trends appear in line with ZenithOptimedia which seems to provide a realistic view in terms of short term growth. Source: ZenithOptimedia 15

FIGURE 2 GLOBAL ADVERTISING SPEND BY MEDIUM 2011 ( m, ZENITHOPTIMEDIA) TELEVISION 138,063 NEWSPAPERS 69,439 INTERNET 55,121 MAGAZINES 32,326 RADIO 24,281 OUTDOOR 22,835 CINEMA 1,778 In 2011 Television makes up 40% of total ad spend, Internet 16%, Radio 7% and Cinema just 1%. ADVERTISING: A PERSPECTIVE ON COLLECTIONS Source: ZenithOptimedia FIGURE 3 TOTAL PUBLIC PERFORMANCE COLLECTIONS COMPARED WITH GLOBAL ADVERTISING REVENUES ( m) AD SPEND IN 2011 PERFORMANCE RIGHTS COLLECTIONS COLLECTIONS AS % ADVERTISING Global public performance collections were 5.7 billion in 2011, which amounted to 1.6% of global advertising revenues as measured by ZenithOptimedia. NORTH AMERICA EUROPE ASIA PACIFIC 118,780 97,0 06 95,088 1,158 3,392 726 1.0% 3.5% 0.8% The expected growth in advertising points to a positive outlook for Authors societies in general, as collections closely follow advertising expenditure. Europe significantly outweighs other regions with collections amounting to 3.5% of advertising revenues. LATIN AMERICA MIDDLE EAST & NORTH AFRICA GLOBAL 25,427 11,329 347,630 Source: ZenithOptimedia and CISAC 344 37 5,658 1.4% 0.3% 1.6% 16

TELEVISION AND RADIO TELEVISION ADVERTISING TV advertising was worth 133 billion in 2011 according to PwC. The sector is predicted to grow steadily by 6.6% per annum through to 2016. Broadcast advertising growth is driven by the expansion into multichannel platforms (including Internet Protocol television), the shift from analogue to digital distribution and the steady growth in high definition (HD) penetration. Key market drivers in TV Advertising: In 2012 the quadrennial effect of the Olympics and US Presidential elections Catch up services and over the top launches to drive online viewing of television, which in turn will drive growth in online TV advertising Growing penetration of Web connected TV sets in North America and EMEA, facilitating online viewing on full screen TV sets Growth in online TV viewing on tablet devices. Tablet sales in 2011 were estimated at circa. 70m (units shipped, average of analyst estimates by CISAC) RADIO The radio industry has shown remarkable resilience both to economic forces and the digitisation of global alternative entertainment channels including on demand music. Radio advertising and subscription fee revenues increased in 2011 to 34 billion, though growth is slowing. However PwC predicts radio s growth will continue at a steady 3.5% per year up until 2016. Key market drivers in Radio: Terrestrial radio broadcasters looking to build additional revenue streams through digital channels Satellite radio continues to drive subscription spending in North America Modest increases in public radio license fees will help maintain the radio markets in EMEA and Asia Pacific 1/3 RADIO AND TELEVISION REMAIN THE PREDOMINANT SOURCE OF REVENUES FOR CREATORS ACROSS THE GLOBE (ONE THIRD OF TOTAL ROYALTIES COLLECTED BY AUTHORS SOCIETIES) 17

FIGURE 4 TOTAL CISAC COLLECTIONS IN RADIO AND TV COMPARED WITH GLOBAL SECTOR REVENUES ( m) RADIO REVENUE TV AD REVENUES TOTAL COLLECTIONS IN RADIO & TV COLLECTIONS AS PERCENTAGE OF REVENUES NORTH AMERICA 14,509 53,806 610 0.9% EUROPE 11,333 29,634 1,364 3.3% TELEVISION & RADIO: A PERSPECTIVE ON COLLECTIONS ASIA PACIFIC LATIN AMERICA MIDDLE EAST & NORTH AFRICA GLOBAL 6,543 1,131 451 33,967 34,669 12,293 2,578 132,982 323 143 23 2,463 0.8% 1.1% 0.8% 1.5% Global CISAC collections in Radio and Television were 2.5 billion in 2011, which amounted to 1.5% of revenues in these two sectors (as measured by PwC). In 2010 figures were in line with a similar 1.5% ratio. As with advertising this suggests a positive outlook for authors royalties as the two sectors are pedicted to rise steadily over the next few years. Europe differs significantly from other regions with collections amounting to 3.3% of sector revenues. N.B. 2010 Global figures: Radio & TV revenues in 2010: 162, 464m/2010 Collections in radio & TV: 2,387/ratio = 1.5% Source: CISAC, PwC Global Entertainment and Media Outlook 2012:2016 Television Advertising includes both terrestrial and digital & online channels (including IPTV). TV industry revenues and annual collections are for advertising funded television sector and exclude Cable & Satellite. 18

INTERNET ADVERTISING Internet advertising continues to grow as a proportion of total advertising spend across the globe as brands shift spend from traditional to digital channels. According to ZenithOptimedia, digital advertising (worth 55 billion) made up 16% of total advertising in 2011 and is set to increase to over 20% over the next two years. Key market drivers in Digital Advertising: An increase in the digital advertising budgets of major global and national companies Broadband household growth continuing to drive wired Internet advertising Growing traffic on social networking sites and increased time spent online Faster broadband speeds and increased TV streaming from broadcasters and over the top video services 55% GROWTH IN COLLECTIONS FROM DIGITAL CHANNELS TO 205 MILLION Growing tablet and smartphone penetration and growth in the mobile Internet access subscriber base will boost mobile advertising 19

MUSIC The IFPI measures global recorded music revenues at trade value to record labels. In 2011 the IFPI global figure for recorded music (excluding performance rights and synchronisation) was $15.4 billion ( 11.1 billion). Global revenues for live music are harder to estimate as these tend to be compiled from a wide variety of national sources including Pollstar (US ticket sales), some authors societies and many others covering the major markets. However, the PwC estimates of 19 billion would seem reasonable when compared with national data on live music. PwC measures the global music market as the total of recorded music (measured at retail values) and live music. Recorded music comprises spending on physical formats CD albums and DVD music videos as well as digital distribution via platforms such as itunes, Spotify and Deezer. It estimated the music sector was worth 36 billion in 2011 ( 17m recorded, 19m live). PwC predicts the sector to grow by 3.7% per annum through to 2016. Key market drivers in Recorded Music: Continuing and accelerating decline in physical formats (CD and DVD) Steady but slowing growth in digital single track sales Steady growth in digital album sales Rapid growth in digital subscription services (such as Deezer and Spotify) A shift from consumer product sales to licensing of music catalogues to subscription services and internet service providers and mobile operators Continued downward pressure on price partly attributable to music piracy Key market drivers in Live Music: The touring market rebounded in 2011/12 driven by local festivals Despite an overall reduction in concert ticket prices in North America, the secondary ticketing market and concert tours of superstar acts continue to attract high prices due to scarcity of supply Elsewhere primary ticket prices continue to rise 7% AUTHORS ROYALTIES FROM MUSIC PHONOGRAPHIC AND LIVE PERFORMANCE AMOUNT TO 7% OF THE TOTAL SIZE OF THE GLOBAL MUSIC INDUSTRY (RETAIL VALUE RECORDED MUSIC AND LIVE) 20

FIGURE 5 TOTAL COLLECTIONS IN PHONOGRAPHIC AND LIVE COMPARED WITH GLOBAL MUSIC SECTOR REVENUES ( m) MUSIC REVENUES TOTAL PHONO & LIVE COLLECTIONS COLLECTIONS AS PERCENTAGE OF REVENUES NORTH AMERICA 11,880 183 1.5% EUROPE 14,805 1,934 13.1% MUSIC: A PERSPECTIVE ON COLLECTIONS ASIA PACIFIC LATIN AMERICA MIDDLE EAST & NORTH AFRICA GLOBAL 7,933 905 334 35,858 207 130 12 2,467 2.6% 14.4% 3.7% 6.9% Global collections in phonographic and live performance were 2.5 billion in 2011, which amounted to 7% of revenues in recorded and live music. Europe and Latin America differ significantly from other regions with collections amounting to 13% and 14% of sector revenues respectively far greater than any of the other regions. Source: CISAC, PwC Global Entertainment and Media Outlook 2012:2016 2010 Global figures: Music sector revenues 35,415m; Collections 2,577; ratio 7.3% 21

Filmed Entertainment (Cinema, in home video and subscription & on demand movies) was worth 61 billion in 2011 and PwC predicts the sector to grow by 3.1% per annum through to 2016. Falling box office revenues in North America and a steadily declining DVD market in North America and Europe are being offset by multiple growth factors. FILM, CINEMA & VIDEO Moderate price growth, new multiplexes, and growth in digital and 3D screens have driven box office growth in recent years to a record high in 2011 of $33 billion ( 24 billion) according to IHS Screen Digest. Key market drivers in Filmed Entertainment: Growth in box office especially in China, India and Latin America Attractive audience demographics and growth in digital screens continuing to boost drive cinema advertising A shortening home video window and experiments in modification of the current windowing structure (e.g. premium VOD and day and date digital releases) will benefit video growth Growth in the Blu ray platform will vlimit declines in physical home video Emerging over the top/streaming services and growth in digital cable and telephone company TV subscription services that promote video on demand will boost digital distribution 22

METHODOLOGY DATA COLLECTIONS METHODOLOGY The 2011 collection figures presented in this report are based on the CISAC member societies gross national collections, as notified to CISAC in November 2012 (Declaration of Income and Expenditure). These figures correspond to the royalties collected by authors societies which are members of CISAC for the use of the global repertoire in their respective territories. International exchanges between sister societies are not covered. In other words, royalties that the societies may receive for use outside each society s own national territory are excluded. More details on methodology: If there were any missing or incomplete figures when this report was published, some societies national collections may have been estimated by reference to the figures for the previous year. Certain estimates could prove to be too optimistic or too pessimistic in relation to the actual figures (subsequently notified by some societies) and this could affect the end result for some sub regions. For comparative purposes, the collection figures are calculated in current EUR, unless otherwise stated. Therefore, the figures for the previous years were not recalculated based on the value of the Euro in 2011. The exchange rate is calculated by reference to the average exchange rate over the whole calendar year. Exchange rate volatility may have an impact on the aggregate results in some sub regions. The figures presented in this survey cover only the royalties collected by the collective management societies which are CISAC members and thus do not cover all the royalties distributed to creators. Hence, for example, the royalties collected directly by music publishers for songwriters and composers (like most synchronisation royalties) do not come within the ambit of the survey. The regional division adopted for this survey reflects the territorial remit of the five CISAC regions (Africa, Latin America and the Caribbean, Canada/USA, Asia Pacific and Europe) rather than the regions as defined by the United Nations. 1% GROWTH IN TOTAL WORLDWIDE COLLECTIONS MADE FROM 2010 TO 2011 (IN CURRENT ) 23

ATTRIBUTIONS AND NOTES Report prepared by Report produced by Keith Jopling, MIDiA Consulting (www.midiaconsulting.com) on behalf of CISAC Coordination of the report: Anne Fortier, Marianne Rollet and Miriam Orozco Layout and design: ostreet.co.uk Thanks to ZenithOptimedia for the use of ZenithOptimedia Advertising and Expenditure Forecasts: September 2012 Thanks to PwC for the use of PwC Entertainment and Media Outlook: 2012 2016 The report will be available in French and Spanish on CISAC website: www.cisac.org For more information, please contact: cisac@cisac.org 24