Entertainment Industry Continues To Enjoy Strong Performance
The latest Entertainment and Media Outlook from PricewaterhouseCoopers predicts steady growth for the sector over the next four years with new technology and the internet forecast to impact on this lucrative industry.
Despite industry fears that the fast forward technology may detract from the effectiveness of television adverts, with consumers skipping through them, PwC asserts that although PVRs in the US are increasing in popularity, they will not materially cut into TV adspend.
TV distribution also looks set to continue to perform steadily, with PwC predicting the market in Europe, Middle East and Africa (EMEA) to increase at double digit rates until 2007, then dropping high single digit increases, averaging 10.5% compounded annually for 2005-09.
New devices in the TV sector will see services such as video on demand (VoD) and multi-channel presence rise. PwC expects new digital launches to drive multi-channel penetration and fuel spending, resulting in Asia/Pacific becoming the fastest growing region in the world.
Elsewhere, PwC predicts VoD in Canada to experience rapid take-up, forecasting the media to reach $153 million in 2009.
The music industry is expected to expand due to the advent of digital and new streams such as mobile and internet music.
In EMEA, mobile music accounted for 10% of the market in 2004 and will constitute nearly a third of spend on recorded music, with spend increasing to $6.4 billion in 2009, a 33.9% compound annual increase.
Overall spend on the industry in the Asia/Pacific region will reach $14.7 billion in 2009, while in Latin America total spend will reach $925 million in 2009.
Radio and out-of-home advertising expenditure in Asia/Pacific will grow at a 8% compound annual rate, rising to $12.6 billion in 2009, from $10.5 billion in 2004. In the US, PwC claims that digital technology attracts listeners to radio, which in turn attracts advertisers and bolsters radio ad rates.
Internet advertising continues to enjoy healthy projections for the future, with growth in the EMEA region fastest in central and eastern Europe, at 13.5%, with spending rising to $8.8 billion from $4.7 billion in 2004. China is estimated to account for 77% of the expected growth for the Asia/Pacific region, with online adspend reaching $90.7 billion in 2009.
Magazine publishing looks set to continue to compete against the increasing popularity of online publications, with PwC forecasting that in the US, the growing use of cable and the internet for image advertising will cut into long-term growth for the medium.
In Asia/Pacific, magazine advertising is expected to rise at a 4.5% compound annual rate, reaching $7.6 billion in 2009, up from, $6.1 billion in 2004, with low-price newsstand titles and increased subscriptions boosting circulation spend in Latin America.
The internet’s encroachment is echoed in the newspaper publishing market, with PwC predicting Latin America and Canada to is worst hit by online publications.
In the US, however, although the migration of classifieds to the internet is expected to cut into print classified growth, PwC asserts that the rising amount of online advertising on newspaper sites will cushion the loss.
Western Europe is predicted to advance at a rate of 2.6% compound annual rate over the next four years, with faster growth of 6.6% and 6.4% anticipated in Central and Eastern Europe, and Middle/East Africa, respectively.
Forecasts published earlier this year by PwC predicted the overall global entertainment industry to rise at a compound annual growth rate (CAGR) of 7.3%, reaching $1.8 trillion in 2009 (see Strong Growth For Entertainment Industry Led By Online Games).
New revenue streams, such as online and wireless video games, are expected to account for a significant portion of total growth in global spending, with combined revenues expected to rise to $73 billion by 2009, up from $11.4 billion in 2004.