Broadband to lead huge media growth

The Guardian

London, June 22:

Broadband internet growth will propel worldwide entertainment and media industries to $1.8 trillion by 2009, PricewaterhouseCoopers predicts, as print publishers cede ground to new media.

Legal online distribution of games, videos and movies is also tipped to accelerate, countering the effect of piracy. Total spending from new revenue streams such as broadband and digital downloads will skyrocket from $11.4bn to $73bn over the next five years, according to PwC’s report, Global Entertainment and Media Outlook: 2005-2009.

Spending on media and entertainment around the world grew by eight per cent last year to $1.3 trillion. This was the largest gain since 2000. The internet was the fastest growing medium, with online advertising up 36 per cent and access revenues up 21 per cent, driven by the switch from dial-up to broadband services.

The internet will continue to outpace other media, as more people hook up to broadband and buy online. Internet advertising is predicted to increase by 16 per cent to $32bn in 2009, as marketers take advantage of broadband formats.

Growth in broadband access combined with the revival of online advertising will see the total internet sector grow 17 per cent annually over the next five years to $289bn.

The booming popularity of digital distribution and mobile phone ringtones has turned the record industry around, enabling it to post its first gain since 1999. The worldwide industry increased 6 per cent to $38bn in 2004, despite the continuing decline in physical format sales.

Illegal digital downloads and CD burning will continue to cut into physical sales but will be offset by growth in licensed digital downloads and mobile music. PwC has forecast 8 per cent annual compound growth for the sector, reaching $56bn in 2009.

PwC is upbeat about the long-term global advertising outlook, forecasting 6 per cent annual compound growth to $477bn in 2009. TV will still account for the bulk of future global ad spend, expanding six per cent annually to $186 billion, nearly six times the size of the online spend. Newspapers and radio will grow more slowly, at 4.3 per cent and 4.7 per cent respectively, as they lose share to new media.