TORONTO – Canada’s entertainment and media market will see a 5% compound annual growth rate (CAGR) over the next four years, compared with a 3.8% CAGR in the U.S., says a new report from PricewaterhouseCoopers (PwC).
According to the company’s Global Entertainment and Media Outlook: 2010-2014, which provides forecasts and analysis on 13 major entertainment and media industry segments in 48 countries, this growth will be led by mobile, Internet, TV, film and video games, combined with a rebound in advertising spending.
"The big story in 2009 was the recession’s impact, which led to a broad pull back in advertising spending”, said Michael Paterson, partner and Canadian co-editor of the report, in a statement. “The exception was Internet advertising, which grew at a double digit pace. As Canada’s economy is recovering ahead of the U.S. economy, we expect that the Canadian advertising market will rebound more quickly. Increased demand and opportunities for Internet and mobile advertising along with sustained spending on traditional advertising platforms will drive growth."
According to the report:
– As the Canadian advertising market continues to recover, growth in digital platforms and traditional media, including television and publishing, will continue to attract the majority of advertising spending. TV advertising will increase at average annual growth of 3.8% to US$3.4 billion in 2014. The conventional television advertising market can expect US$2.1 billion of revenue in 2014, increasing at a CAGR of 2.4%, while specialty television growth will be slightly stronger at a CAGR of 4.8%;
– Internet access spending in Canada at a 12% CAGR (compared to 8.8% in the U.S. and 9% globally), and Internet advertising at a 11.7% CAGR (compared to 7.7% in the U.S. and 11.4% globally), will be major drivers for the industry;
– TV subscriptions will grow at a 6.8% CAGR (6.5% in the U.S. and 6.8% globally) to US$9.1 billion by 2014, driven by the expansion of digital cable, video on demand offerings and IPTV;
– Mobile Internet access will expand dramatically in Canada and spending will grow at a CAGR of 45% to over US$1.55 billion in five years. With 10 million Canadians expected to have access to the Internet via their mobile devices by 2014, this will put continued pressure on providers to support all of these new data demands;
– Consumer spending on video games will increase by a 6.6% CAGR (6.4% in the U.S. and 10.6% globally), to US$1.7 billion in 2014. The strongest growth will be in on-line and wireless games where convenience and interactivity enhance the consumer experience;
– Canadian box office spending will continue to grow at a CAGR of 5.3%. Higher growth will occur in paid on-line rentals and digital downloads to own, which will contribute to a US$4.1 billion Canadian film entertainment market in 2014;
– Overall consumer end-user spending on media, excluding Internet access spending, will increase in Canada at a rate of 4.3% CAGR (3.7% in the U.S. and 4.1% globally), while advertising will rise at a 3.1% CAGR (2.6% in the U.S. and 4.2% globally).
The global entertainment and media industry will also grow at a compound annual growth rate of 5% over the forecast period to 2014, reaching US$1.7 trillion, up from US$1.3 trillion in 2009.
The fastest growing region throughout the forecast period is Latin America growing at a 8.8% CAGR during the next 5 years to US$77 billion in 2014. Asia Pacific is next at a 6.4% CAGR through to 2014 to US$475 billion, while Europe, Middle East and Africa will grow at a 4.6% CAGR to US$581 billion in 2014.
