Despite the current fall-out in the advertising market and creeping negativity toward all things online, the internet is still as compelling a distribution medium this year as it was last. This is one of the findings of a new report from PricewaterhouseCoopers (PWC) – Global Entertainment And Media Outlook: 2001-2005.
The research claims that the global market for online advertising and internet access will grow from the $40 billion of last year to $90 billion by 2005. Growth in the US will be strongest, at a compound rate of 14% a year until 2005.
During the same period television content (comprised of broadcast and cable networks) will be the only other US segment to show double digit growth. It will expand at a 10.3% compound annual growth on the strength of digital cable and DBS (satellite), which are expected to reach 42 million and 26 million subscribers respectively by 2005.
| Compound annual growth rate (%): |
| |
Internet advertising and access spending |
| US |
14.0 |
| Latin America |
47.2 |
| Europe, Middle East & Africa |
17.4 |
| Asia Pacific |
26.3 |
| Source: PricewaterhouseCoopers |
|
As a result of these market growth rates, internet advertising and access spend will be the fastest growing sector of the global media and entertainment industry over the next four years.
One of the key difficulties that has faced internet publishers is how to make decent money from the medium. Content is rarely subscription, banner ads have never been particularly popular and may be the first to go in the current recession, according to Myers’ Advertising Confidence Report (see Forecasts).
However, the PWC survey says that growing consumer demand for online music, books, newspapers, and magazines, along with increased broadband access, will push forward the distribution of an ever greater depth of information. The online distribution of filmed entertainment will become a reality, it says. The outlook to 2005 sees the industry developing new business models that will usher in a move from free distribution to paid Net subscriptions, the survey predicts.
