Media industry to grow 5% annually until 2014: PwC
TV advertising will increase in Canada in 2010, but online advertising is set to beat even the US rate of increase, according to a new PricewaterhouseCoopers Global Entertainment and Media Outlook report.
This year the Canadian entertainment and media industries are expected to make a major post-recession comeback, with a growth of 5% compound annual growth rate (CARG) through to 2014, according to the a PricewaterhouseCoopers (PwC) report titled Global Entertainment and Media Outlook: 2010 to 2014.
This is great news for the industries, which last year declined by 2.7%, especially as the predicted growth seems to spread out across all sectors and mediums. In Canada, internet advertising will see an increase of 11.7% compound annual growth rate (CAGR) – that’s a bigger boost than in the US, where online advertising is expected to grow by 7.7%.
Ad spend across all mediums will continue to recover, and the demise of conventional television seems to be exaggerated, stated the PwC report. In total, TV advertising is expected to grow at an average annual rate of 3.8% to a total of $3.4 billion in 2014. Conventional TV is increasing at a rate of 2.4% with an expected revenue of $2.1 billion US in 2014, while specialty TV growth is even stronger at an annual CAGR of 4.8%.
‘As Canada’s economy is recovering ahead of the US economy, we expect that the Canadian advertising market will rebound more quickly,’ said Michael Paterson, partner and Canadian co-editor of Global Entertainment and Media Outlook at PwC, in a release. ‘Increased demand and opportunities for internet and mobile advertising along with sustained spending on traditional advertising platforms will drive growth.’
Much of the growth is related to an increase in consumer spending – especially on technology and digital media. The report predicts that consumer spend on internet access will increase at a 12% CAGR while TV subscriptions will grow at a 6.8% CAGR, largely thanks to the expansion of VOD, digital cable and IPTV (where internet TV is delivered over broadband as opposed to traditional cable or satellite broadcast) offerings.
Additionally, the report said, more people will go to the movies as Canadian box office spending should grow at a rate of 5.3% CAGR, and videogame spend, which declined in 2009, will grow at a rate of 6% CAGR to $1.7 billion US in 2014.
The most dramatic figure shows the expansion in mobile internet access, which is set to grow at a CAGR of 45% (from $238 million US to more than $1.55 billion US in just five years). In 2014, 10 million Canadians should have access to the internet via their mobile devices.
While the media entertainment industries have always experimented with new formats and advanced technologies, the current advances in the digital realm are adding new choices for consumers at an accelerated rate, resulting in an unprecedented impact on the marketplace, according to Jerry Brown, an associate partner in the Canadian Entertainment and Media division for PwC.