Asia leads entertainment, sports, media growth

The global entertainment and media industry has entered a solid growth phase and will increase at a 6.6 percent compound annual growth rate (CAGR) to $1.8 trillion in 2010, according to PricewaterhouseCoopers' Global Entertainment and Media Outlook: 2006-2010. New revenue streams are growing rapidly, the growth of physical formats has slowed, and availability of licensed digital distribution now provides consumers alternatives to piracy, the report says.

Digital technologies, chiefly broadband Internet and mobile, are becoming established and increasingly lucrative distribution channels that are changing the way consumers acquire entertainment and media content. Global spending via online and wireless channels reached $19 billion in 2005 and will increase to $67 billion by 2010, the Outlook says. Digital technologies consist of five categories: online rental subscriptions and digital streaming in filmed entertainment, licensed digital downloads and mobile music in recorded music, online and wireless video games, electronic books and online casino gaming.

"Virtually every segment of the entertainment and media industry is shifting from physical distribution to digital distribution of content," said Wayne Jackson, global leader of PricewaterhouseCoopers' Entertainment & Media Practice. "As this shift continues, we see more revenue opportunities for entertainment and media companies. So while physical distribution of content is declining, that decline will be offset somewhat by digital distribution, which is driving and creating new growth opportunities."

"We expect that Asia Pacific will remain the fastest-growing region for the industry, reflecting both the underlying economic growth and local developments and initiatives. The growth will be led by double-digit increases in Internet, TV distribution, casino and other regulated gaming and video games," said Marcel Fenez, Asia Pacific leader of PricewaterhouseCoopers' Entertainment & Media Practice. "Significantly, we also expect that the People's Republic of China will pass Japan in 2009 to become the largest market in Asia Pacific."

Continued expansion in the broadband household universe will be a major growth driver, and wireless subscriber growth and rollout of next generation handsets and high-speed wireless networks will stimulate mobile markets. In 2005, the broadband universe totaled 187 million households, up from only 30 million in 2001. By 2010, there will be an additional 246 million broadband households, bringing the total to 433 million globally. The number of people with a wireless telephone subscription is also growing rapidly, with a total of 1.8 billion globally in 2005. That figure will rise to 2.8 billion by 2010, adding one billion potential customers to mobile content during the next five years.

Asia Pacific remains the fastest-growing region, led by explosive growth in the People's Republic of China and India. Spending in Asia Pacific will average 9.2 percent compound annual growth-the highest of all of the regions- reaching $425 billion in 2010.

The sports market will also see a further boost due to a revitalized TV rights market and by revenues from sponsorship and merchandising around the two FIFA World Cups (Germany in 2006 and South Africa in 2010) and other major sporting events taking part in the territory.

Casino and other regulated gaming rose by 10.9 percent, the second fastest growing segment in 2005. Rapid growth in online gaming and new casinos will propel growth, with Asia Pacific expected to experience the largest increase because new casinos in Macao will make that portion of the People's Republic of China a major casino gaming destination. Spending will increase from $82 billion in 2005 to $125 billion in 2010, an 8.8 percent CAGR.

PricewaterhouseCoopers' Global Entertainment and Media Outlook: 2006-2010, the seventh annual edition, contains in-depth analyses and forecasts of 14 major industry segments across five regions of the globe - the United States, EMEA (Europe, Middle East, Africa), Asia Pacific, Latin America, and Canada - plus a Global Overview. It is available in hard copy or electronically (PDF) for US$995 at www.pwc.com/outlook. The "Global Overview" is available separately for US$95 in hard copy or electronically, and individual segment chapters are also available for US$95 in electronic format only.

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