The advertising market appears more confident than at any time since the downturn of 2008/9 and we expect positive economic conditions to last until the next general election due in 2015

This encouraging outlook for the UK economy underpins our advertising expenditure forecast of CAGR 4.2% for 2013-2015

Internet advertising will increasingly dominate while television (CAGR 2%) and other media will see modest growth with the exception of print, still in sharp decline though less severely than feared a few months ago

Global consumer expenditure on recorded music fell 4% in 2012 to $20.7 billion on the continued decline of sales of the CD and other physical formats to $12.3 billion in 2012, while retail spending on digital formats rose 8% to $7.1 billion. We predict the global market will turn the corner in 2014 and reach $22.4 billion in 2017

For 2012, we estimate the share of digital at 35% of retail sales in the top five markets of the US, Japan, Germany, the UK and France. In Japan, the rebound in CD sales and difficult mobile-to-internet transition reduced the share of digital in 2012 to just 15% of retail. For the other markets, sliding CD sales and digital growth continue to increase the share of digital in retail sales, with the US in the lead with 55% digital share

A key theme in 2013 and in our forecasts is the take-off in revenues from subscriptions to access services, both stand-alone and bundles from mobile carriers. Bundling leverages the personal, mobile and connected nature of smartphone music activity, reduces decision-making and price barriers, and is a more powerful driver of adoption than stand-alone offerings. At this point, we still expect ownership to remain more important than access in the market for digital music by 2017

Recorded music retail sales in Japan were flat in 2012 at $5.8 billion on the unexpected bounceback of CD sales, amidst the ongoing collapse of mobile music sales

Smartphone adoption is driving up internet track sales, which topped mobile track sales in 2012, but the internet’s price discount to mobile is squeezing track revenues

Japan will be dynamic in 2013 and beyond for ‘access’ subscription services, newly launched by Sony, J-pop label-backed RecoChoku, and carriers

Apple’s iTunes will add free-to-the-user online and mobile radio to the platform in the autumn of 2013, meshing music purchase with enhanced tools for discovery.

iTunes Radio also meshes with Match, the cloud-based music storage and retrieval utility sold for $24.99/year, whose users will enjoy ad-free online and mobile radio.

The main casualty of iTunes Radio is likely to be #1 US internet station Pandora, which this week launched the next phase of its battle to win the better royalty terms of commercial radio.

Google Play, the digital content platform from Google for Android devices, has added a music subscription service to the sale of music, ebooks, videos and apps.

All Access, available only in the US initially, benefits from integration in Google Play, the default storefront on Android smartphones and tablets (excepting Amazon’s Kindle Fire). All Access isn’t available on Apple devices, in the majority in the US, severely limiting its reach.

Google’s main objective with Google Play is to support the Android ecosystem and attract and retain Android device owners, and thus OEMs and developers. We expect Google Play to operate slightly above break even like iTunes.

This report provides an update on the UK commercial radio sector, covering listening trends, digital platforms, group strategies and advertising expenditure.

Over the last few years, Global Radio has cleverly exploited the regulatory framework to rebrand, merge and share programming across its stations, creating the quasi-national Heart and Capital networks and slashing its operating costs in the process. But Global appears to have misjudged the competition regulators’ attitude towards local media mergers in its purchase of GMG Radio and has been ordered to sell off eight stations in seven local markets.

With at least eight stations to be divested from the Global/GMG portfolio and Absolute Radio still potentially up for sale, hot on the heels of Bauer's recent acquisition of Planet Rock, the radio industry is in the midst of a new wave of M&A activity. This report assesses the performance of the leading commercial groups and the strategies they have employed in recent years.

Alongside the formation of branded networks, another key development has been the launch of digital spin-off stations, first by Absolute Radio and more recently by Smooth and Kiss. We also discuss the impact of DAB growth on listening behaviour, the continuing challenge of getting digital radio into cars and the potential for smartphone listening growth.

UK recorded music retail sales fell 8% in 2012 to £1 billion, as CD sales fell 21% to £540 million whilst digital formats rose 15% to £484 million on a huge 70% climb in subscriptions.

HMV store closures in 2013 will further dent CD sales, but accelerate the point of inflection (at least 50% digital sales) of the UK’s retail market.

The UK remains a robust source of royalties from performance of sound recordings, with PPL reporting revenues in 2011 of £153.5 million, up 7%.

The Competition Commission has provisionally decided that local (but not national) advertisers will suffer if the Global/GMG radio merger is passed and its suggested remedies are for Global to divest stations outside London and the West Midlands or simply unravel the whole transaction.

If these provisional findings are confirmed in May 2013, Global will find itself in the unenviable position of looking for a purchaser or more of radio assets, since the transaction was finalised in June 2012.

Although the Competition Commission is likely to prefer a single buyer of the portfolio to minimize the purchaser’s risk, it may be content with a carve up of the GMG stations, in which case we see Bauer Media as being a strong contender for stations out-with its current footprint.

The US recorded music market (at retail level) touched bottom in 2012 on strong digital sales and adoption of digital subscription services, and will grow in 2013 The industry’s licensing revenues in 2012 were also boosted by much higher performance revenues collected by SoundExchange from digital radio services such as webcaster Pandora and satellite provider Sirius XM The margin enhancing effect of an improved sales mix as the physical to digital transition proceeds to a licensing model is mirrored in the results of Warner Music Group, which also includes a music publishing segment

Enders Analysis co-hosted its annual conference, in conjunction with BNP Paribas and Deloitte, in London on 15 January 2013. The event featured talks by 14 of the most influential figures in media and telecoms, and was chaired by Sir Peter Bazalgette. This report provides edited transcripts of the talks given by nine of those speakers: Sir Martin Sorrell, CEO, WPP Tim Davie, Acting Director General, BBC Dan Cobley, Managing Director, Google UK & Ireland Michael Tobin, CEO, Telecity Group Liv Garfield, CEO, Openreach Dido Harding, CEO, TalkTalk Group Victor Zhang, CEO, Huawei UK & Ireland Cindy Rose, Executive Director of Digital Entertainment, Virgin Media Q&A: Dido Harding, Victor Zhang and Cindy Rose Ed Richards, CEO, Ofcom