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Huge broadband-led growth forecast in media industry

Broadband Internet growth will propel the value of the worldwide entertainment and media industries to US$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 US$11.4 billion to US$73 billion 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 8 percent last year to US$1.3 trillion. This was the largest gain since 2000. The Internet was the fastest growing medium, with online advertising up 36 percent and access revenues up 21 percent, 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 percent to US$32 billion in 2009, as marketers take advantage of broadband formats.

Surging growth in broadband access combined with the revival of online advertising will see the total Internet sector grow 17 percent annually over the next five years to US$289 billion.

The booming popularity of digital distribution and cellphone ringtones has turned the record industry around, enabling it to post its first gain since 1999.

The worldwide industry increased 6 percent to US$38 billion last year, 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 percent annual compound growth for the sector, reaching US$56 billion in 2009.

"If you get the right product to the right people at the right price legally, they will pay for it," said PwC's UK entertainment and media expert, Robert Boyle.

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