Thursday, June 19, 2008

Digital and Mobile Media Spending Set to Double Share by 2012

Digital and mobile distribution should more than double its share of global media and entertainment spending in the next five years, according to Pricewaterhouse Coopers.

Although digital and mobile distribution comprised only 5 percent of global entertainment and media (E&M) spending in 2007, these revenues will account for 24 percent of all growth throughout the industry during the next five years, according to PricewaterhouseCoopers’ Global Entertainment and Media Outlook: 2008-2012.

By 2012, digital and mobile revenues will account for 11 percent of total E&M spending, or $234 billion of the $2.2 trillion global market. Digital and mobile revenues will account for 10 percent of total E&M spending, or $75 billion of the $759 billion U.S. market.

The report underscores the importance of continuing to extract revenues from traditional business segments while emerging technologies continue to solidify their consumer position. PwC’s annual report pegs global compound annual growth rate [CAGR] at 6.6 percent for the sector, anticipating it reaching $2.2 trillion in 2012. The U.S. E&M market will grow at 4.8 percent CAGR reaching $759 billion in 2012.

The global broadband boom continues unabated, fuelling overall growth, and more than doubling again to 661 million households in 2012, a 16.4 percent compound annual increase.

While Internet advertising growth will moderate from that in recent years, it will see the most robust growth globally, at 19.5 percent CAGR through to 2012. Internet access (12.1 percent), video games (10.3 percent) and television subscriptions and license fees (10.1 percent) will all experience double-digit growth, globally. Yet in the U.S., the three leading segments will be Internet advertising (15.1 percent), Internet access (10.9 percent) and video games (7.9 percent).

More established segments—television advertising (global 5.9 percent; U.S. 4.9 percent), theme parks (global 5 percent, U.S. 3.9 percent), casino gaming (global 6.5 percent; U.S. 4.0 percent), filmed entertainment (global 5.3 percent; U.S. 4.6 percent) and sports (global 6.5 percent; U.S. 6.1 percent)—are all set to grow at between approximately 4 percent and 7 percent compounded annually.

The publishing segments face the stiffest challenges, where the declines in physical distribution are at their most significant and growth in digital distribution—although rapid—is struggling to make up for the shortfall: newspapers (global up 2.2 percent; U.S. -0.7 percent CAGR), consumer magazines (global 3.5 percent; U.S. 3.8 percent), consumer & educational books (global 2.8 percent; U.S. 2.5 percent), business-to-business publishing (global 3.2 percent; U.S. 2.6 percent) as well as recorded music (global -0.6 percent; U.S. -5.3 percent).

While the rest of the world expects growth, the U.S. newspaper segment is expected to decline.

However, U.S. newspaper web site advertising will reach $6.4 billion, a 15.1 percent compound annual increase by 2012. Web sites will account for 15 percent of total daily newspaper advertising, more than twice its 7 percent share in 2007. via seekingalpha

Jason Kiwaluk

Mower & Shoveller,

Ecommerce | Adtech | Innovation | Strategy

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