Spending in the global entertainment and media industry will climb to US$1.2 trillion in 2005 from US$831 billion in 2000 despite current economic uncertainty and Internet sector volatility.
Online distribution of content will continue to be a key driver of growth, consulting firm PricewaterhouseCoopers said in a report about the sector's outlook.
"Digital technology, such as Internet access, broadband services, the expansion of the (high-speed) pipe into homes, satellite and wireless communications are going to be driving this growth," said Mike Kelley, one of the authors of the report and partner in the firm's media and entertainment practice.
High-speed Internet subscribers in the United States will soar to 28 million by 2005 from 4 million currently, with much of the growth kicking in at the end of 2002 and beginning of 2003, Kelley added.
During the next five years, the consulting firm said it sees the industry developing new business models worldwide that will stimulate the shift from free distribution to paid Internet subscriptions, while solving copyright issues.
Despite a recent slowdown in online advertising spending that has caused much pain for many Internet media companies, the consulting firm said it sees double-digit growth globally in Internet advertising and access spending over the next five years.
Double-digit growth is expected in all regions within Internet advertising and access spending, with overall spending jumping to US$90 billion in 2005 from US$40 billion in 2000.
Revitalised online market
Streaming media will revitalise the online ad market and online retailers will integrate their activities with catalog and brick-and-mortar outlets to incorporate the benefits of traditional retailing.
Consolidation within the entertainment and media industry will be another key driver of growth, with mergers across national boundaries and companies expanding their control over means of distribution.
The ability of global media players to distribute their product and content throughout the world will make media companies stronger and better able to provide advertisers with efficient ways to reach consumers.
Spending worldwide in filmed entertainment will rise to US$93 billion by 2005 from US$68 billion in 2000. The U.S. market should reach US$55 billion by 2005 as home video sales and increases in TV program spending offset modest box office growth.
Interactive TV
The TV content market, which encompasses cable and broadcast networks, will reach US$168 billion globally in 2005 from US$107 billion in 2000. Interactive TV will gain a foothold in the market, but it will be used in conjunction with scheduled programs rather than as a substitute.
Spending in recorded music will grow at an estimated 5.1 percent compound annual rate over the next five years, reaching US$49 billion in 2005.
In the US, fee-based online distribution of music, primarily through subscriptions, will become a significant factor in the market over the next two years. However, physical distribution via CDs and other media will remain dominant.
Worldwide spending on magazine publishing will grow to US$111 billion in 2005 from US$84 billion in 2000. The US market will grow by only 1.7 percent in 2001, after a big year in 2000, primarily because of to a slowdown in the economy and the loss of dot-com and tobacco advertising.
Spending in newspaper publishing globally will increase to US$197 billion in 2005 from US$155 billion in 2000. The Internet is proving to be an engine of growth and a companion for newspapers, attracting new readers and additional advertising, and driving print subscriptions, the report found.
Spending in publishing globally will rise to US$105 billion in 2005 from US$85 billion in 2000. Electronic books will become a significant component of the US industry, accounting for 30 percent of spending on professional books by 2005, 28 percent of college textbooks, and 11 percent of consumer books.
