Global Entertainment, Media Industry to Hit $2 Trillion in 2011

According to PricewaterhouseCoopers, the global entertainment and media industry will increase at a compound annual growth rate of 6.4 percent to $2 trillion in 2011, with the Internet, TV platforms and video games as the fastest-growing sectors, and Brazil, Russia, India and China as key markets for rapid growth.

The PricewaterhouseCoopers' Global Entertainment and Media Outlook: 2007-2011 predicts double-digit growth for digital and mobile spending during the next five years, rising to $153 billion by 2011. Furthermore, the spending on the distribution of entertainment and media on convergent platforms will exceed 50 percent of global spending by 2011. 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 million to 540 million subscribers and wireless subscribers will increase by 1.1 billion to 3.4 billion.

"Content, distribution and technology companies need to aggressively seek out new relationships to accommodate the shift towards convergence,” said Jim O'Shaughnessy, the global chairman of the Entertainment & Media practice at PricewaterhouseCoopers. “Furthermore, companies will need to test new business models to address increased fragmentation and intellectual property in a digital era. Deal activity across the entertainment and media sector is accelerating, driven by the migration to digital formats."

Global advertising will increase at a 5.4 percent CAGR to $531 billion in 2011 from $407 billion in 2006. The Internet will remain the fastest growing advertising medium, with a projected 18.3 percent CAGR to $73 billion in 2011, comprising 14 percent of the global advertising market.

Spending on convergent platforms will grow faster than other platforms and will account for 72 percent of the total entertainment and media growth during the next five years. Asia Pacific will be the fastest growing convergent platform region, with a projected 13.5 percent increase. Double-digit growth is expected in Latin America.

Economic expansion and a surging entertainment and media market are driving significant growth in Brazil, Russia, India and China (BRIC). Led by India and China, E&M spending in BRIC will increase by a 14.7 percent CAGR to $251.5 billion in 2011, accounting for 24 percent of global E&M growth during the next five years. "The surge in broadband and wireless adoption is generating new digital revenue streams across multiple segments," said Marcel Fenez, the global managing partner for the Entertainment & Media practice at PricewaterhouseCoopers. "Broadband growth is driving online advertising while the proliferation of next-generation wireless devices designed to play digital music, video games and receive TV programming is fueling mobile distribution. For example, Asia Pacific spending on distribution of television programming on mobile phones is expected to reach $6.5 billion in 2011 from just $26 million in 2006."

The U.S. remains the largest but slowest growing E&M market, with a 5.3 percent CAGR, reaching $754 billion in 2011. EMEA, the second largest market, will expand at a 5.5 percent CAGR to $617 billion in 2011. Led by Saudi Arabia/Pan Arab and South Africa, Middle East/Africa will continue to be the growth region, averaging 8.5 percent CAGR during the forecast period. TV distribution, Internet advertising and access spending and video games will be the fastest growth segments. Asia Pacific will remain the fastest-growing region. Spending in Asia Pacific will average 9.6 percent annual growth, increasing from $297 billion in 2006 to $470 billion in 2011. India will be the fastest growing during the next five years at 18.5 percent CAGR, followed by China with a 16.8 percent CAGR. Latin America's E&M market, the second fastest-growing region, is projected to rise at an 8.9 percent CAGR to $68 billion in 2011. Canada is projected to expand at a 5.6 percent CAGR to $47 billion in 2011.

The global Internet market rose 21.8 percent, the fastest-growing segment in 2006. Advertising rose 37.9 percent and access spending increased 18.8 percent. Globally, Internet advertising and access spending is expected to grow from $177 billion in 2006 to $332 billion in 2011.

The global television distribution market, the second fastest-growing segment, increased by 9.4 percent in 2006, an improvement compared with the 6.5 percent increase in 2005. Aggressive rollout of Internet protocol television from telephone companies is stimulating competition and fueling subscriber growth. Globally, the television distribution market will increase from $161 billion in 2006 to $251 billion in 2011.

The TV network market rose 6.2 percent in 2006. Globally, spending will increase from $172 billion in 2006 to $228 billion in 2011. Sports increased 12 percent. Spending in the sports segment is expected to increase from $96 billion in 2006 to $124 billion in 2011. Filmed entertainment rebounded in 2006 with a 2.9 percent advance following a 2.6 percent decline in 2005. Globally, filmed entertainment spending will rise from $81 billion in 2006 to $103 billion in 2011.