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The editors at www.dancewithshadows.com
are grinning like cheshire cats. The just-released PwC report on global entertainment and media (E&M) industry says the sector is in its strongest position since 2000. The growth will climb at a steady 7.3% compound annual growth rate (CAGR) to $1.8 trillion in just five years, says PricewaterhouseCoopers' Global Entertainment and Media Outlook: 2005-2009.
Better economic conditions and upswing in advertising, coupled with rising online distribution of books, music, films and video games will be key drivers which fuel end-user spending, the report says.
Said John Middelweerd, European leader of PricewaterhouseCoopers' Entertainment & Media Practice: "we're forecasting healthy growth in EMEA with double-digit increases in video games, including console games, handheld games, PC games, online games, and wireless games, as well as Internet advertising and access spending, and TV distribution. Recorded music, one of the slowest-growing segments over the past few years, will experience an enormous turnaround to become one of the fastest-growing segments in EMEA during the next five years, as spending on mobile music and legal digital distribution services take off."
According to the PWC report, new spending streams fuelled by broadband Internet and wireless technologies will make for a significant chunk of growth in international spending. Total turnover from new spending streams will go up substantially from $11.4 billion in 2004 to nearly $73 billion across the world by 2009, if the PWC predictions are to believed.
Says Wayne Jackson, global leader of PricewaterhouseCoopers' Entertainment & Media Practice: "the entertainment and media industry continues to show an extraordinary ability to reinvent itself and create new revenue streams through novel offerings which did not exist as recently as five years ago. Online and wireless video games, licensed digital distribution of music, online film rental subscriptions and the rapid adoption of ring tones and mobile music downloads are becoming key components of the industry and driving significant revenues across all regions."
The fastest-growing region during the next five years will be
Asia/Pacific, (where, incidentally, DWS is headquartered!) says the PWC report. PWC sees powerful growth ahead in China, which is on way to beat Japan as the region's largest market by 2008. China will show the highest spending growth in the world, at a 14.2 percent CAGR excluding Internet access spending, and 25.2 percent after accounting for the explosion in Internet access spending. Growth in the region will be led by double-digit increases in the Internet, video games, casino gaming, TV distribution and recorded music segments.
Positive economic surroundings and fresh spending avenues will balance declining categories. Across all regions, Broadband Internet will be a major growth catalyst, jacking up overall Internet access spending and creating new avenues for Web advertising and making it easier to conduct online transactions. Besides, a greater amount of content is licensed to digital distribution services by entertainment companies, which will help alleviate the negative impact of piracy.
Wireless and online game are fastest-growing in the video game market, and online rental subscriptions of movies will fuel the home video rental market. Electronic books are another small but widening area, which will support the book market, providing new distribution opportunities. Video-on-demand (VOD) and satellite radio are emerging new spending streams contributing to growth.
Spending in global advertising will rise at a robust 5.9% CAGR in the 2005-2009, rising to $477 billion in 2009 from $358 billion in 2004. Advertising on TV is expected to grow at a 6.4% CAGR during this period, boosted by new TV stations and an expanding multi-channel household. TV still maintains its lead as the largest advertising medium, which is expected to clock $186 billion revenues in 2009. Web advertising is the fastest-growing advertising medium with a projected 15.8% annual increase to $32 billion globally in 2009.
Asia/Pacific will remain the world's third-largest region. It is projected to average 11.6 percent CAGR increasing to $432 billion in 2009. Latin America's E&M market is projected to rise at an 8.2 percent CAGR to $47 billion in 2009. Canada is projected to expand at a 6.0 percent CAGR to $37 billion in 2009, fueled by double-digit increases in video games and the Internet.
The PwC Outlook also includes in-depth global analyses and five-year market forecasts for eight other industry segments, including: radio and out-of-home advertising, business information, magazine publishing, newspaper publishing, book publishing, theme parks and amusement parks, casino gaming (included for the first time, covering gross gaming revenues generated on-site at casinos), and sports.
BY OUR MEDIA EDITOR
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