Entertainment And Media Spend Set For 5.2% Growth To 2006, Says PWC
Global entertainment and media (E&M) spend grew by 1.5% in 2001, exceeding the $1 trillion mark, according to a new report from PricewaterhouseCoopers (PWC). The Global Entertainment And Media Outlook: 2002-2006 report predicts continued growth, with E&M spend reaching $1.4 trillion by 2006 – a compound annual growth rate (CAGR) of 5.2%.
Globally, weak economic conditions will continue to dampen spend in 2002 and 2003, but faster growth should return between 2004 and 2006, says the report. The report also forecasts that global advertising spend will show a CAGR of 4.8% between now and 2006 (see Global Adspend To Grow By Average Of 4.8% Until 2006).
Digital drivers Digital distribution of E&M content – aided particularly by rising broadband penetration – will be the greatest driver of E&M spending from 2005-2006, says PWC.
In the US, the number of households with broadband connections is forecast to grow from 9.4 million in 2001 to 35.3 million in 2006. This will almost equal the narrowband (dial-up) sector, at 38.2 million. Broadband growth will in turn be driven by music and video-on-demand content, which require a faster connection than offered by narrowband platforms.
“To see where the ‘digital evolution’ is headed, take a look at the surge in spending for digital cable and broadband Internet access. Consumers who’ve demanded a more diverse entertainment experience are leading the charge by subscribing to these upgraded distribution platforms, and new and more diverse content offerings will follow,” says Kevin Carton, global leader of PricewaterhouseCoopers’ Entertainment & Media Practice.
Growth by region At $438 billion in 2001, the US was the largest market in terms of overall E&M spending. It is projected to expand at a 5.5% CAGR through to 2006.
Internet advertising and access spending will show significant growth, primarily due to broadband and subscriber upgrades to higher-priced access packages. This segment will experience double-digit CAGR of 10.8% in the US, with spend reaching $40 billion by 2006, according to PWC.
Europe, Middle East and Africa (EMEA) is the second largest region with 2001 E&M spending of $339 billion. Once again, the Net will be the fastest growing segment, followed by sports, which will be bolstered by the 2006 World Cup in Germany and its associated television rights. EMEA will continue to experience moderate growth during the forecast period, with spending reaching $426 billion by 2006.
“EMEA will continue to grow at a pace reflecting consumer demand for new entertainment and information options. We project strong growth in internet and TV networks and distribution, fueled by consumer desire for digital technology and multi-platform access to premium content such as sports, movies, news and business information,” said Robert Boyle, European leader for PricewaterhouseCoopers’ Entertainment & Media Practice.
Asia/Pacific’s E&M industry will be fueled by telecommunications deregulation, low current internet penetration levels that leave room for substantial growth – 17.3% CAGR is expected. In addition, the current World Cup in Japan and Korea will bolster the sports market.