Online ad spend to beat TV in 2017: PwC

The company's latest Global Entertainment and Media Outlook says TV ad revenue is set to grow by 1.6 to 3.1% in the years between 2013 and 2017.
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Canadian TV ad revenues are now well above pre-recession levels, according to the latest Global Entertainment and Media Outlook: 2013-2017 from Price Waterhouse Cooper (PwC).

PwC noted that after a soft 2012, when growth of just over 1% was seen, the prospects are now for steady growth of between 1.6% and 3.1% in the years from 2013 to 2017.

In 2012, TV accounted for 27% of total advertising spending in Canada, a level similar to that in other developed TV markets. After growing continuously since 2009, the TV ad market was set to grow continuously between 2012 and 2017, with net revenues reaching $4.1 billion in 2017.

Meanwhile, PWC calculates that the Canadian online advertising revenues reached $3.2 billion in 2012, up from $2.8 billion in 2011. By 2017, the market will be worth $6.4 billion, due to a compound annual growth rate (CAGR) of 14.5% over the period.

It bears emphasizing that online ad spending is projected to be $2.1 billion higher than TV ad spending in 2017. That finding echoes a Canadian Marketing Association finding released last fall, which projected online ad spending to surpass TV ad spending by 2016.

With a market share of 41% of online ad-spend in 2012, search is the leading ad format in Canada.

The TV sectors total revenues (combining advertising money and satellite subscriptions), are set to rise from $1.9 billion in 2012 to $2.3 billion in 2017, a CAGR of 3.6%. Of that total, satellite subscriptions accounted for a robust $260 million in 2012, rising to $387 million, a CAGR of 8.3%.

Also of note, PwC projects the Canadian over-the-top (OTT) market, which was born only in 2010 when Netflix launched north of the border, will be worth $614 million by 2017.

The company said the market is growing at a CAGR of 25.2%, in part due to the entry of numerous other streaming players, such as iTunes, Cineplex.com and Watchcanada.ca, an offering from funders the Canada Media Fund and Telefilm Canada.

That strong growth rate was also part of the reason that the annual value of North America’s electronic home video market (both pay-TV and OTT streaming services) is forecast to surpass the theatrical box office’s value for the first time in 2017. By that year, North America’s electronic home video market will be worth $14.8 billion annually, compared to the theatrical sector’s $13.5 billion annually that year.

Perhaps due in part to the addition of OTT services to cable packages, PwC expected the total of pay-TV subscribers in Canada to increase by 800,000 between 2012 and 2017, to reach 12.6 million. It noted that the sector’s four main players – Rogers, Shaw, Videotron and Cogeco – account for 89% of all cable TV subscriptions.

From Playback Daily