The Canadian entertainment and media market will grow to US$47 billion by 2011 (a compound annual growth rate of 5.6%) from the 2006 level of $36 billion, according to the PricewaterhouseCoopers ‘Global Entertainment and Media Outlook: 2007-2011.’
The outlook states the Canadian internet advertising market will grow at a rate of 23.5% to $2 billion in 2011, fuelled by internet access spending that will grow at a rate of 6.3% to US$2.5 billion – which includes a 9.9% growth rate in broadband access spending to offset the decline in dial-up connections.
Video gaming, propelled by high broadband penetration in Canada, will expand at 9.4% to US$1.4 billion in 2011. Console/handheld games will expand at a 5.4% rate, from US$425 million in 2006 to US$554 million in 2011, while online games will grow from US$248 million in 2006 to US$476 million in 2011, a rate of 13.9%. Wireless games will increase from US$89 million in 2006 to US$230 million in 2011, a whopping 20.9% increase – and the largest growth rate of the market.
‘Canada has one of the highest broadband penetration rates in the world,’ said PWC director of the Canadian entertainment and media advisory practice Jerry Brown. ‘Possibly as a result, online games represent a more significant segment of the gaming market in Canada than in other regions. In 2006, the online gaming segment constituted 28% of the gaming market in Canada compared with 21% in Asia Pacific.’
The television network market is expected to expand at 4.5% to US$4.6 billion in 2011. Specialty channel advertising will be the fastest growing sector, expanding at 7.6% to US$1.1 billion. Basic subscription spending will grow at a rate of 4.8% to US$3.5 billion. Premium subscriptions will rise to US$853 million, a 4.5% increase. VOD will continue to be the fastest-growing category, with a 28.9% rate, and reach US$498 million in 2011.
PWC projects the radio and out-of-home market in Canada to grow at a rate of 11.7% (faster than any other global region), topping US$2.8 billion in 2011 from US$1.6 billion in 2006. OOH, specifically, will expand at 8.7%, reaching US$502 million in 2011 from its 2006 level of US$331 million – a boom driven by new technologies in digital billboards, 3D displays and in-store video networks. Growth for radio will top US$2.3 billion in 2011, growing from US$1.3 billion in 2006 at a rate of 12.4% – driven by strong local markets and targeting, as well as radio companies increasing use of mobile technology to further their message and their reach.
The report predicts that free newspapers and online competition will continue to erode the unit circulation numbers and spending for the print market. Advertisers following readers to the internet will lead to declines in classified ads and slower growth overall for newspaper advertising. The industry will expand at a 1% rate to US$3.2 billion in 2011 from US$3.1 billion in 2006. Advertising will reach US$2.5 billion in 2011, up 1.3% annually from US$2.4 billion in 2006.
‘It’s not all bad news for newspapers,’ noted Brown. ‘Growth in broadband Internet access is stimulating Internet advertising in general, and newspaper Web sites are benefiting from that trend given the inherent strength of newspaper brands as a means of driving local search traffic. In addition, ‘rich content’ video ads, coupons and circulars – popular formats among packaged-goods advertisers and supermarket chains – can be distributed easily and efficiently online.’
