The Channel | 2002 | September

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to expand at a 5.5 per cent CAGR through 2006.
Internet Advertising and Access spending will enjoy significant
growth, due mainly to broadband and subscriber upgrades to higher-
priced access packages. This segment will experience double-digit
compound annual growth of 10.8 per cent in the US, with spending
jumping to US$40 billion by 2006. Increased channel capacity,
coupled with a ‘fatter pipe,’will not only drive Internet access spending
in the US, but also television distribution spending. With digital cable
and DBS comprising 73 per cent of multi-channel subscribers, TV
Distribution spending will soar to US$100 billion in 2006.
Europe, Middle East and Africa (EMEA) is the second largest region
with 2001 E&M spending of US$339 billion. Once again, the Internet
will be the fastest growing segment, followed by Sports, which will
be bolstered by the 2006 World Cup in Germany and its associated
television rights. EMEA will continue to experience moderate growth
for the duration of the forecast period, with spending reaching US$426
billion by 2006.
Commented Robert Boyle, European leader for
PricewaterhouseCoopers Entertainment & Media Practice: “EMEA
will continue to grow at a pace reflecting consumer demand for new
entertainment and information options. We project strong growth in
Internet and TV Networks and Distribution, fuelled by consumer
desire for digital technology and multi-platform access to premium
content such as sports, movies, news and business information.”
Asia-Pacific’s E&M industry will be fuelled by telecommunications
deregulation, low Internet penetration levels that
leave room for substantial growth (a 17.3 per
cent CAGR is expected), as well as government
initiatives to promote Internet usage. In addition,
the 2002 World Cup in Japan and South Korea
will bolster the Sports market.
Growth in the Latin American market will continue through 2006.
Low Internet and Television Distribution penetration rates have left
significant room for expansion and will be the main reasons these
sectors will be the fastest growing over the forecast period, with
compound annual increases of 24.3 per cent and 9.0 per cent,
respectively.
Canada, the smallest region with US$24 billion in entertainment and
media spending in 2001, is expected to be the fastest growing, at 5.7
per cent CAGR. Primary drivers have been an advertising market
that has held up relatively well despite the global economic downturn;
a healthy home video and film production business; and the
establishment of new digital channels.
This year’s edition of OUTLOOK has been expanded to include new
chapters on Educational and Professional Books and Training and
Business Information, which provide a more complete look at the
overall industry.
Key findings by segment
Educational and Professional Books and Training: Near-term
economic weakness and slow labour force growth in EMEA andAsia-
Pacific will hold growth to low single-digit rates. The market, already
the largest on a global basis, will expand from US$208 billion in
2001 to US$261 billion in 2006, averaging 4.7 per cent compound
annual increases.
No end to E&M spending
Filmed Entertainment: Spending worldwide will be fuelled by strong
box office receipts, boosted by the expansion of local productions.
DVDs will continue to boost the home video market, but the category
will be adversely affected by piracy. The filmed entertainment segment
will expand at a 5.7 per cent CAGR, increasing from US$59 billion
in 2001 to US$79 billion in 2006.
Television Networks (Broadcast and Cable) : Projected advertising
rebound, teamed with new channel launches, will drive growth.
Canada will experience greatest growth rate - 8.7 per cent. US
spending is expected to reach more than US$54 billion by 2006 and
Europe is expected to reach more than US$37 billion by 2006.
Globally, television networks will peak at US$144 billion in 2006.
TV Distribution (Station, Cable and Satellite): “Digital evolution”
will positively affect this sector for the length of the forecast period,
with upgrades to digital cable and satellite boosting subscription
spending, especially in regions where cable and satellite penetration
are already high. Subscriber growth will also drive spending in regions
with low multi-channel penetration. Global spending will rise to
US$210 billion by 2006, growing at a 6.9 per cent CAGR.
Recorded Music: This sector will be most vulnerable to piracy and
unauthorised use of copyrighted material and will be the slowest
growing, averaging only a 1.6 per cent gain through 2006. By 2004,
an improving economy, and rising digital subscriptions, will begin to
offset declines in traditional music sales, with global spending
reaching US$38.5 billion in 2006.
Internet Advertising and Access Spending: The fastest growing
segment over the next five years, expanding by 12.1 per cent CAGR
to total US$94 billion in 2006, up from US$53 billion in 2001. The
principal drivers will be increased broadband availability and rising
online penetration, while a strong e-commerce market will lead to a
rebound in online advertising.
Radio and Out-of-Home Advertising: Out-of-of home will be boosted
by new technologies that create additional venues and make displays
more attractive. Digital broadcasting will increase radio audiences
and advertising, with consolidation making it easier for advertisers
to buy both media. The market will grow from US$46 billion in 2001
to US$59 billion in 2006.
Sports: The biggest driver over the forecast period will be The World
Cup in 2002 and 2006, and rising television rights fees. However,
financial problems for European rights holders will result in a decrease
in rights fees in non-World Cup years. The segment will grow at a
6.6 per cent average rate, rising to US$50 billion in 2006 from US$36
billion in 2001.
Business Information: The economy will dampen near-term spending,
with a small increase expected in 2005-2006. The development of
new products, facilitated by enhanced distribution through broadband
access, will contribute to growth once economic conditions improve.
Spending will increase to US$88 billion in 2006, a 5.0 per cent CAGR.
Digital broadcasting will increase
radio audiences and advertising