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Entertainment and media biz to grow 6.6% annually

The global entertainment and media (E&M) industry has entered a solid growth phase and will increase at a 6.6% compound annual growth rate (CAGR) to 1.8 trillion in 2010, according to PricewaterhouseCoopers' Global Entertainment and Media Outlook: 2006-2010.

Global spending via online and wireless channels reached 19 billion in 2005 and will increase to 67 billion by 2010, the Outlook says. In 2005, the broadband universe totaled 187 million households, up from only 30 million in 2001. By 2010, there will be an additional 246 million broadband households, bringing the total to 433 million globally. The number of people with a wireless telephone subscription is also growing rapidly, with a total of 1.8 billion globally in 2005. That figure will rise to 2.8 billion by 2010, adding one billion potential customers to mobile content during the next five years.

Global advertising will increase at a 6.2% CAGR during the forecast period, to 521 billion in 2010 from 385 billion in 2005. Growth improvement achieved during the past two years will be sustained through 2008, but more moderate increases are projected during 2009-10 as the current economic recovery in many countries begins to falter. The Internet will remain the fastest-growing advertising medium, at an 18.1% CAGR to 52 billion in 2010. The Internet will constitute nearly 10% of global advertising in 2010 compared with less than 3% in 2002.

Television Distribution: Saturated markets will continue to dampen growth in the U.S. and will hold down growth in Canada as well. Conversely, in EMEA (Europe, MidEast and Africa), Asia Pacific, and Latin America, large increases in the number of subscription TV households will generate double-digit gains. Continued piracy problems in Asia Pacific, however, will limit market potential in that region.

VOD will expand in all regions, contributing to overall market growth. The introduction of IPTV will contribute to subscriber growth, and the migration of subscribers to higher-priced digital services will increase revenue per subscriber. The market will reach 230.3 billion in 2010 from 154.4 billion in 2005, at an 8.3% CAGR.

For television networks (broadcast and cable, digital platforms will support new channels and fuel multi-channel advertising, which will be the principal driver during the next five years. New analog channels, digital broadcasting, and HDTV will increase the appeal of free-to-air channels. Distribution to mobile phones will further expand viewing and advertising. Public TV license fees in EMEA and Asia Pacific will continue to be slow-growing components of the market. Spending will increase at 6.6% CAGR to reach 227 billion in 2010 from 164 billion in 2005. Local TV is forecast to grow at a 4.0% CAGR to 30.5 billion in 2010. Local cable will increase at a 4.7% CAGR to 6.7 billion in 2010.

Radio advertising is forecast to rise on average 4.2% a year to 24.4 billion in 2010. Satellite radio advertising will increase 62.3% to 225 million in 2010.

Out of home advertising will grow at an 8.3% CAGR over the next five years to 9.4 billion. Billboards are projected to grow at an 8.2% CAGR to 5.8 billion.




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