European E&M Industry To Remain Buoyant, Says Report
Spending on entertainment and media in Europe’s largest economies will grow at a compound annual growth rate (CAGR) of 3.4% between now and 2007, according to a report published by PricewaterhouseCoopers (PwC).
The study, Entertainment And Media Outlook: 2003-2007 Europe defines E&M spending as expenditure by both advertisers and end-users across the full range of entertainment and media services, products and platforms.
PwC claims that growth will be limited to 2.4% in 2003 as there is no major sporting event (e.g. World Cup) to boost sports spending. For the remainder of the forecast period, the organisation anticipates “a modest but steady improvement” in the six countries as a whole with expenditure predicted to reach ₏243 billion by 2007. Global E&M spend is expected to be in the region of $1.4 trillion (₏1.2 trillion) at that point (see Media & Entertainment Spend To Show 4.8% Growth Over Five Years).
| Entertainment & Media Spending Forecasts – Major European Countries | ||
| Year | Spend (₏m) | Growth (%) |
| 2001 | 199,446 | 1.7 |
| 2002 | 204,984 | 2.8 |
| 2003 | 209,830 | 2.4 |
| 2004 | 217,365 | 3.6 |
| 2005 | 225,269 | 3.6 |
| 2006 | 235,316 | 4.5 |
| 2007 | 242,759 | 3.2 |
| Source: PricewaterhouseCoopers LLP, October 2003 | ||
Media and country breakdowns E&M growth will continue to outstrip GDP growth but by a smaller margin than in the 1990s. It is reckoned that the fastest growing sectors will be television distribution, internet access spending and advertising and filmed entertainment, each averaging annual increases of more than 7%. Key factors will be the rising number of multichannel households, the spread of broadband, growth in online advertising and the expanding DVD market.
Spending on traditional media sectors such as recorded music and magazine, newspaper and book publishing will grow less rapidly (under 2% annually) between now and 2007.
Robert Boyle, European Leader, Entertainment & Media practice, PricewaterhouseCoopers, commented: “The clear picture is of an industry continuing to make strong progress amid challenging economic, regulatory and geopolitical conditions, whilst demonstrating the cyclical resilience of some mature sectors.”
Of the countries studied, Germany is the largest in terms of entertainment and media spending (₏63 billion in 2002) but the slowest growing and this is set to remain the case for the foreseeable future. The relatively immature markets of Italy and Spain will be the fastest-growing, with compound annual increases averaging 4.8% and 4.4% respectively.
| Entertainment & Media Spending Growth By Country (%) | |||||||
| Country | 2002 | 2003 | 2004 | 2005 | 2006 | 2007 | 2003-07 CAGR |
| France | 3.9 | 2.9 | 3.9 | 3.6 | 4.2 | 3.5 | 3.6 |
| Germany | 0.3 | 1.0 | 2.2 | 2.4 | 3.6 | 1.9 | 2.2 |
| Italy | 3.8 | 2.8 | 4.9 | 4.7 | 5.9 | 3.8 | 4.4 |
| Netherlands | 5.1 | 1.9 | 3.9 | 3.2 | 4.7 | 4.0 | 3.5 |
| Spain | 3.3 | 3.5 | 4.9 | 5.6 | 5.9 | 4.4 | 4.8 |
| United Kingdom | 4.0 | 3.2 | 3.9 | 4.1 | 4.4 | 3.4 | 3.8 |
| Source: PricewaterhouseCoopers LLP, October 2003 | |||||||