Revenue in Canada’s entertainment and media market will increase 5% each year from 2010 until 2014, faster than the 3.8% annual rise predicted for the US market, while Canadian ad revenue should increase 3.1%, according to new research from PricewaterhouseCoopers.
For the report Global Entertainment and Media Outlook: 2010-2014, PwC analyzed 13 major entertainment and media segments in 48 countries, and predicted the compound annual growth rate (CAGR) of these nations for the next five years.
Worldwide, the report says that the entertainment and media industry will grow 5% annually, reaching US$1.7 trillion by 2014.
According to PwC, the transformation to digital properties and an increased spending on advertising are the main reasons for the rise.
“While the industry has a long history of experimenting and adding formats that have offered consumers new choices, the current advances in technologies and consumer behaviour are unprecedented in both their speed and their simultaneous impact across all segments,” said Jerry Brown, an associate partner for PwC’s Canadian Entertainment & Media (E&M) practice, in a release.
In Canada, total advertising revenue is set to rise at a 3.1% CAGR in Canada, also higher than the 2.6% forecast for the U.S.
Global advertising is set to increase at a 4.2% CAGR, according to PwC, up to $498 billion (US), with Internet advertising leading the way. It will join television advertising as the only media with spending of over $100 billion (US), the report forecasts.
According to Michael Paterson, partner and co-editor of the report, while advertising spending dipped due to the recession, Internet advertising was the exception, growing at a much faster pace than initially expected.
“As Canada’s economy is recovering ahead of the US economy, we expect that the Canadian advertising market will rebound more quickly,” Paterson said in a release.
Mobile and Internet advertising won’t be the only platforms that are thriving. PwC estimates that traditional ad revenue for television and publishing will also be on the rise.
The report predicts that TV advertising will increase at an annual rate of 3.8%, with specialty channels witnessing a slightly higher growth (4.8% per annum, compared to 2.4% for regular channels).
The fastest expansion will be in mobile Internet access, set to rise from US$238 million to over US$1.55 billion in five years. Rising at an annual rate of 45%, this catapult is due to the increasing number of smartphones and mobile Internet subscribers. The report predicts that 10 million Canadians will be accessing their Internet via mobile devices, such as the iPad, by 2014.
Brown explains that as mobile media continue to expand, consumers will be seeking more innovation and immediacy within technological properties.
“[Companies] will need to deliver an ever-expanding customer experience and be flexible to capture revenues across all platforms. Those who do will be the leaders in this exciting but challenging industry.”
PwC also predicts revenue for other media properties is bound to rise in Canada.
These media forms include TV subscriptions (6.8% a year, driven by the expansion of digital cable and video-on-demand offerings), video games (6.6% due to the growth of online and wireless games), and theatre box office (by 5.3%).
