‘Convergent platforms’ will take up 50% of global entertainment, media spending

The global entertainment and media (E&M) industry is experiencing sustained growth and will increase at a 6.4% compound annual growth rate (CAGR) to $2 trln in 2011, according to the PricewaterhouseCoopers Global Entertainment and Media Outlook 2007-2011.

Double-digit growth is expected for digital and mobile spending during the next five years rising to $153 bln by 2011. Spending related to the distribution of entertainment and media on convergent platforms (convergence of the home computer, wireless handset and television) is also growing at double-digit rates and will exceed 50% of global spending by 2011, the PwC survey found.

Within the next five years, nearly half of the total industry growth is expected to be generated through online and wireless technologies and, during the same period, broadband households will grow by 300 mln to 540 mln subscribers and wireless subscribers will increase by 1.1 bln to 3.4 bln.  The migration to digital formats is having an adverse impact on competing revenue streams while consumer-generated media is accelerating content fragmentation, the report says.

Global advertising will increase at a 5.4% CAGR during the forecast period, rising to $531 bln in 2011 from $407 bln in 2006. Internet will remain the fastest-growing advertising medium, with a projected 18.3% compound annual increase to $73 bln in 2011. Advertising on the internet has truly come of age, and by 2011 will comprise 14% of the global advertising market. Out-of-home will be the second fastest growing advertising medium, with a projected 6.5% compound annual increase.

In every region, spending on convergent platforms will grow faster than other E&M platforms and will account for 72% of the total E&M growth during the next five years, the PwC report said.

Asia Pacific will be the fastest-growing convergent platform region with a projected 13.5% increase and double-digit growth is expected in Latin America as Internet and broadband penetration begins to gain momentum.

Economic expansion and a surging entertainment and media market are driving significant growth in Brazil, Russia, India and China (BRIC). Spending for the BRIC countries will increase by a 14.7% compounded annually, expanding from $127 bln in 2006, to $251.5 bln in 2011. That gain will be nearly three times the projected 5.5% compound annual increase for the rest of the world.

The US remains the largest but slowest growing E&M market, growing at a 5.3% compound annual growth rate reaching $754 bln in 2011. US spending on Internet advertising and access will surpass spending on newspaper publishing in 2009.

EMEA, the second largest market, will expand at a 5.5% CAGR to reach $617 bln in 2011. Led by Saudi Arabia/Pan Arab and South Africa, Middle East/Africa will continue to be the growth region, averaging 8.5% compounded annually during the forecast period. TV distribution, Internet advertising and access spending and video games will be the fastest growth segments for EMEA averaging double-digit compound annual increases during the next five years.

Asia Pacific will remain the fastest-growing region during the next five years, with the fastest economic growth and double digit increases in Internet, TV distribution, casino and other regulated gaming and video games. Spending in Asia Pacific will average 9.6% annual growth, the fastest of any region, increasing from $297 bln in 2006 to $470 bln in 2011. India will be the fastest growing during the next five years at 18.5% CAGR, while China will continue to record double-digit annual gains that will average 16.8% CAGR.