Future Rosy For Online Entertainment, Media


People worldwide will be looking toward digital technology -- particularly that which uses the Internet -- to serve their entertainment and media needs, proving once again the future is indeed digital.

According to PricewaterhouseCoopers' most recent "Global Entertainment and Media Outlook," expenditures in those categories are expected to increase to $1.7 trillion from by 2014 (from $1.3 trillion), with a compound annual growth rate of 5%. In the U.S., such expenditures will increase about 4% annually to $517 billion by 2014 (from $425 billion). Furthermore, by 2014, digital entertainment is expected to account for 26% of that spending, up from 19% in 2009.

The shift toward a more digital lifestyle will be reflected in future advertising investments, according to the firm. While Internet, television, radio, out-of-home and video game advertising are all expected to be greater in 2014 than 2009, magazines, newspapers and directories will decline. Overall, U.S. advertising is expected to grow at an average 2.6% a year to $180 billion in 2014 (from $159 billion in 2009). That level will still be 9% below the advertising expenditures of 2007.



As people become more comfortable with mobile Internet devices, the number of mobile Internet subscribers will also increase 40% to 96.1 million, according to the report. As such, Internet advertising is expected to grow at an average 7.7% annually between 2010 and 2014, while video game advertising is set to grow at a 6.4% annual average rate.

"The digital pace of change has proven to be even quicker than anticipated, with consumers embracing new media experiences and digital downloads at often-unexpected speeds," said Ken Sharkey, PwC's U.S. entertainment, media and communications practice leader, in a statement.

"There is no 'one-size-fits-all' approach for E&M companies to stake their position in the digital value chain. The continued fragmentation of the E&M sector will fuel greater experimentation by both established industry giants and niche players in adopting business models that include hybrid combinations of advertising and subscription approaches."

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