1
SONY BMG ITALY
Sony BMG Italy
Il mercato della musica digitale
Cagliari Apr. 9th 2008
2
3
4
Global Music Industry Digital Growth vs Physical Decline
($bn)0.4
1.1
2.1
2.9
3.9
2004 2005 2006 2007 2008 FC
21.1
19.7
18
15.8
14.2
2004 2005 2006 2007 2008 FC Digital Wholesale Revenues
Analysts suggest that digital revenues will be
greater than physical revenues
by 2012
Physical Wholesale Revenues
Sources: IFPI, PwC
+188% +91% +38% +35% -7% -9% -9% -12% -10%
Trade Revenue ($bn) 2004 2005 2006 2007 2008 FC
Total Music Revenues 21.5 20.8 20.1 18.7 18.1
Decline -3% -2% -7% 3%
5
Reinventing the music industry…
Source: IFPI
2003 2007
Number of legal services
Less than 50 Over 500
Licensed tracks 1 million 6 million
Value of digital music sales
$20m $2.9bn
Digital as a
percentage of total music sales
0% 15%
Number of formats available per artist release
Less than 10 Over 100
6
7 Sep 06 YTD
Global Digital Sales By Channel 2007
Source: IFPI 2007
48%
47%
5%
Online Mobile
Subscriptions
8
Products / Business Models 2008
2008
Ad Supported Music
Utility Deals
D2C
Ringles / Hybrid Products
Long-form Video Social Networks
Mobile Clubs
9
The Mobile Phone as Portable Music Device
10 15%
15%
18%
35%
36%
42%
44%
46%
55%
57%
61%
66%
70%
78%
88%
60%
98%
96%
96%
88%
85%
85%
85%
82%
65%
64%
58%
56%
54%
45%
43%
39%
34%
30%
22%
12%
40%
15%
GR CZ HU CH BE FI PO SE AT RU DE DK ZA NO IT PT TU UK FR ES EURO
7%
8%
19%
22%
26%
32%
33%
33%
41%
42%
54%
59%
70%
74%
74%
49%
100%
100%
98%
97%
96%
93%
92%
81%
78%
74%
68%
67%
67%
59%
59%
46%
41%
30%
26%
26%
51%
CZ PO TU RU GR PT ZA IT ES NO SE AT HU FR FI DK UK BE CH DE EURO
SBMG European Online/Mobile Revenue Mix 2006/7
92%
86%
63%
62%
61%
56%
56%
53%
46%
28%
22%
16%
13%
9%
57%
8% 14% 37%
38% 39% 44% 44% 47% 53%
54%
64%
72%
78%
84%
87%
91%
94%
95%
97%
100%
43% 47%
36%
DE BE NO UK DK HU CH FI FR SE IT AT PT CZ ES GR TU PO ZA RU Europe
Online Mobile
2006 2007
46% 54% 57% 43%
Source: Hyperion. Excludes ‘Other’ revenue.
11 Sep 06 YTD
Digital Music in Europe: Online vs Mobile Growth
Source: IFPI, Sony BMG
50%
0%
Online Mobile
Europe 2006/2007
12
0%
2%
4%
6%
8%
10%
12%
14%
16%
18%
20%
22%
DK GR RU CH TU UK SE NO PT ES BE HU FI AT PO FR DE IT CZ ZA 2007 2006
Digital % Total SBMG Revenue: 2006/7
Source: Sony BMG
US: 29.5%
Asia: 19.8%
LAM: 10.6%
WW: 18.0%
Europe 2007
= 7.1%
Europe 2006
= 5.3%
13
Digital Market in Italy – Official IFPI Data ‘07
SBMG IT Digital Market Share
62%
38% SonyBMG
Italy Others
Total Market Digital Sales '07: 15.220.000 €
Total Market - 10%
Mobile - 18%
Online + 26%
2007 Vs 2006
SBMG IT Online Market Share
69%
31%
Others SonyBMG Italy
SBMG IT Mobile Market Share
63%
37%
Others SonyBMG Italy
*
*
+ 41 % vs 200614
15
Music 2.0 – Lo scenario prossimo futuro
Da “ Eight Predictions for the Future of Music “ Gerd Leonard – October 2003
1. Music like Water: la musica non è più un prodotto ma un servizio
2. A bigger Pie, but cheaper Slices: crescita del 300% del potenziale mercato
3. Diverse and ubiquitous: la musica sarà ovunque
4. Access to music will replace ownership: non c’è più bisogno di possedere
5. Multi-Point access to music will be the default environment
6. Go direct: alcuni artisti si gestiranno direttamente la distribuzione
7. The software pro: il Drm verrà superato
8. Mobile Mania: esplosione dei devices mobili
