The worldwide entertainment and media sector is forecast to grow at 6.3pc annually through to 2008, to be worth US$1.7trn, according to a new forecast from PricewaterhouseCoopers (PwC). The Irish portion of this market is set to show 5.2pc compound growth yearly over the same time period and will be valued at US$2.33bn within four years.
The findings are part of PwC’s report, Global Entertainment & Media Outlook 2004-2008, which was launched in Ireland today. The industry figures detailed in the report comprise consumer and advertiser spending which is set to grow from mid-2004 following a three-year slump, according to Peter Winkler, head of global marketing at PwC’s Entertainment & Media practice.
“The sector is poised for very strong growth over the next five years,” he said at the launch. Factors driving this growth will be a boom in broadband take-up, along with the video games and internet sectors which represent the fastest growing segments of the entertainment and media industry.
The Asia-Pacific market is predicted to be the fastest growing region worldwide, with China and India particularly expected to make huge strides thanks to huge populations in both countries but as yet low penetration and usage of media such as the internet and satellite TV.
One of the stand-out figures in the report is the performance of the video games market, which is predicted to show 21pc compound annual growth rate (CAGR) over the next five years. Internet access and advertising is the only other segment expected to show double-digit growth of 16.8pc CAGR, PwC found.
Global advertising spending will improve noticeably at a 5.3pc CAGR during the 2004-08 period, rising to US$412bn in 2008 from US$318bn in 2003. TV remains the largest advertising medium and is projected to expand at a 6.5pc CAGR through to 2008. The internet will remain the fastest growing advertising medium, though technically the smallest in size. Online ad spending rebounded strongly last year and will grow to a projected US$18.9bn in 2008 with a 12.7pc CAGR. Electronic media will continue to gain ground at the expense of print, said PwC.
The outlook for entertainment and media in Ireland is positive overall, with all bar one segment expected to grow over the coming years. That exception is the music business, which will show a decline both in volume and value – that is, the amount of units shipped to stores and the price consumers pay for albums and singles. “Piracy is continuing to impact sales in the near term,” commented Sinead Parker, director of PwC’s strategy advisory services. “We expect to see retailers discounting to counteract the effects of piracy and parallel imports.
Unlike the global overview where video games are strongly in evidence, the Irish market figures do not cover this sector as there is currently no reliable data available.
Filmed entertainment and TV are forecast to grow by 4.7pc and 6pc CAGR respectively in Ireland. In addition, with just 38pc of Irish adults currently using the internet at home, this sector too represents an opportunity for growth, said Parker.
By Gordon Smith