Growth in advertising and media expenditure will be modest this year, although somewhat higher than in 2002, according to the latest Global Entertainment And Media Outlook report from PricewaterhouseCoopers (PwC).
The report predicts that global media and entertainment spend will top $1.1 trillion in 2003, a 3.7% rise on last year. Following this, in the period to 2007, spend growth is expected to strengthen, reaching $1.4 trillion. This is a compound annual growth rate (CAGR) of 4.8% between 2002 and 2007.
On the whole growth rates across 2004-2007 will be slower than the 1998-2000 period, which was a time of very rapid industry expansion. “Even with the prediction of a more positive economy in 2004-05, the desire to avoid the repeat of the boom-bust cycle of the past few years will restrain investment and consumer spending,” says the report.
Europe, Middle East & Africa In the Europe, Middle East and Africa (EMEA) region, entertainment and media expenditure is forecast to increase from $341 billion in 2002 to $421 billion in 2007 – a 4.3% CAGR.
PwC says that video games, filmed entertainment, sports and internet advertising and access spending led the region with double-digit gains, offsetting decreases in recorded music, magazine and newspaper publishing and business information.
Advertising spend in EMEA dropped by 0.2% in 2002, a second consecutive year of decline. Weak trading in newspapers and magazines – which contribute around 51% of adspend to the region – was largely responsible for the overall decline. The press sector is forecast to remain weak, but improvements are expected in internet advertising.
EMEA growth for 2003-2007 as a whole will average 3.3% CAGR – up from $77.5 billion in 2002 to $91.1 billion by 2007.
“Although E&M growth is unlikely to outstrip GDP across Europe as it did in the ’90s, we continue to predict healthy growth in all areas and rapid growth in areas of new media such as video games and Internet advertising,” says Robert Boyle, head of the European Entertainment and Media division at PwC.
