Global entertainment and media (E.M.)industry spending will increase at a 6.3 percent compound annual growth rate (CAGR) to $1.7 trillion in 2008, according to a new PricewaterhouseCoopers report.
A 9.8 percent CAGR for the Asia/Pacific E.M. region sparked the industry's positive momentum. Economic conditions, the availability of new distribution channels, and continued adoption of next-generation technologies also were credited for the change.
After three years of sluggish growth, the E.M. industry has begun a solid upturn, with spending increasing to 4.2 percent in 2003 to $1.2 trillion. Growth will pick up to 5.7 percent globally in 2004 and sustain faster increases through 2008, according to “Global Entertainment and Media Outlook: 2004-2008” from PricewaterhouseCoopers.
The Asia/Pacific region is emerging as a key driver of E.M. industry growth fueled largely by the People's Republic of China (PRC) and India. Both are investing heavily in communications and media infrastructure and opening up their markets. Both countries have huge populations and low media penetration, providing significant room for expansion. The Asia/Pacific region's video games and Internet segments will be the world's largest and fastest-growing, and television distribution will benefit from the addition of 96 million multichannel households in India and the PRC.
The five-year outlook for Europe, the Middle East and Africa (EMEA) will be divided between rapidly growing segments and slow-growing segments. Driven by penetration of new technologies and broadband — industry segments including filmed entertainment, TV distribution, the Internet and video games — will average double-digit growth compounded annually through 2008. Even music, after years of negative growth, will expand due to licensed digital distribution and recovery of the CD sales model.
The E.M. industry is experiencing a major shift in the way entertainment is distributed with new distribution channels, such as broadband Internet access and wireless communications, driving significant growth in the industry.
During the next five years, the number of broadband households will grow at a 31.3 percent CAGR, surpassing the 300 million mark for the first time in 2008.
Next-generation technologies will reinvigorate maturing segments and drive E.M. growth. Digital television is replacing analog, thus expanding the potential market for advertisers and subscribers; online and wireless video games are bridging the gap until the introduction of new console platforms scheduled for 2006-07; and digital audio broadcasting (DAB) and satellite radio are helping attract new national advertisers. Additionally, DVDs have revitalized home video, with rapid growth in the sell-through market driving growth at the expense of rental.
The full report is available in hard copy or electronically (PDF) for $995.
The Global Overview is available separately for $95 in hard copy or electronically, and individual segment chapters are also available for $95 in an electronic format only.