PwC: Entertainment & Media Sector May Not Recover Until 2011

imageDo you have what it takes to wait it out until 2011? PricewaterhouseCoopers is coming out with its omnibus annual entertainment and media sector forecasts tomorrow, and the outlook is pretty grim worldwide, though Asia is looking much brighter than the North America and Europe, not surprisingly. According to its Global Entertainment & Media Outlook 2009-2013:
— The global entertainment & media market as a whole, including both consumer and advertising spending will grow by 2.7 percent compounded annually for the entire forecast period to $1.6 trillion in 2013.
— A 3.9 percent drop in 2009, and a mere 0.4 percent advance in 2010, with a period of much faster growth during the remaining period to 7.1 percent in 2013.

More from PwC’s outlook, after the jump

— Consumer spending in E&M will fall by a projected 1.2 percent in 2009, remaining weak in 2010 and seeing only relatively low growth at 3.2 percent in 2011.
— Responses to recession vary across territories. Latin America and Asia Pacific are fastest growin, with annual compound rate of 5.1 percent and 4.5 percent through to 2013 reaching $73 billion and $413 billion respectively.
— Video game ads are expected to outpace the rest of the ad industry (though from a low base) at 13.8 percent CAGR compared to an overall industry decline at a compound rate of 0.6 percent during the forecast period. The growing proportion of Internet and mobile advertising in the overall global advertising mix will rise from around 12 percent in 2008 to 19 percent in 2013, though that still seems low as a proportional share, meaning the work’s still cut out for replacing those analog dollars with digital, well, dollars.
— Four segments — recorded music, B2B publishing, newspapers, and consumer magazines — will suffer actual declines in total global revenues during 2009-2013 as a whole, in stark contrast to CAGR in excess of 6 percent in Internet access, Internet advertising, video games, and TV subscriptions and license fees, and of 4 percent in filmed entertainment, which will become an increasingly digitally-driven segment.
— Advertising revenues as a whole are facing a period of broad decline over the coming five years, with global advertising spend across all media projected to be still below its 2008 level in 2013. This means a “profound structural shift during the five years towards more targeted and cost-effective ad models enabled by digital. This in turn may result in a permanent reduction in total advertising spend, as dollars formerly ‘wasted’ through inaccurate targeting are saved and reallocated to other priorities,” says the report.

For a UK and European outlook of the E&M sector, see this FT story on PwC’s report: PwC forecasts the UK newspaper market will fall a cumulative 28 percent between 2009 and 2011. Even including digital, newspaper advertising will fall by 20 percent over the next three years.


Photo credit: Flickr/super megabuddy