GOLDEN AGE OF THE DIGITALLY EMPOWERED CONSUMER 

A new collaborative Entertainment & Media industry emerges from  

It’s the golden age of the empowered consumer, with the demand for digital experiences increasing and becoming the norm, according to the latest Global Entertainment & Media Outlook 2011-2015 from PwC. In many markets the Entertainment & Media (E&M) industry emerging from the global recession has been profoundly changed as the ongoing consumer migration to digital has accelerated due largely to the device revolution. 

Over the next five years, PwC forecasts that aggregate E&M global spending will rise from US$1.4 trillion in 2010 to $1.9 trillion in 2015, a 5.7 per cent compound annual advance driven by economic growth, but masking the accelerating shift of spending from traditional to digital platforms. Currently digital accounts for 26 per cent of all spending but by 2015 we expect digital’s share to rise to 33.9 per cent. In mainland China, E&M spending grew 13.9 per cent in 2010 and is projected to grow at a compound annual growth rate (CAGR) of 11.6 per cent between now and 2015. 

China Highlights 2011 

Overall E&M spending in China grew 13.9 per cent in 2010 and will continue to be among the faster-growing countries during the next five years, with a projected 11.6 per cent compound annual increase. China will pass Germany in 2011 to become the third-largest market in the world. 

Through to 2015, overall advertising spending in China is projected to grow by 14.1 per cent compounded annually, and the consumer and end-user spending in China will grow at a CAGR of 2.4 per cent to $12 billion.  

Television will remain the biggest advertising segment throughout the forecast period and Internet advertising will be the fastest-growing advertising category during the next five years.  

Growth in 2010 was led by filmed entertainment, which soared by 53.1 per cent; video games and TV subscriptions, which each rose by more than 30 per cent; and Internet advertising, which increased by 28.2 per cent. Double-digit annual gains during the next five years are projected for each segment except Internet access, print media, and business-to-business.  

Filmed Entertainment: China recorded the largest increase in Asia Pacific, with a 53.1 per cent gain. New multiplexes and a surge in 3-D admissions propelled box office takings by 63.9 per cent. Continued growth in 3-D screens will drive box office spending, which PwC expects will more than triple during the next five years. We expect the increase in China to be 26.0 per cent compounded annually to $6.3 billion in 2015. 

Video games: China becomes the third-largest market in the world, at $5.8 billion in 2010. Spending rose 32.0 per cent on the strength of a rapidly expanding online market, driven primarily by massively multiplayer online games. Overall spending will increase at a 20.6 per cent compound annual rate to $14.8 billion in 2015. China will account for over 54 per cent of total growth in Asia Pacific during the next five years and will pass Japan in 2011 to become the largest video game market in Asia Pacific. 

Television subscriptions: Increased spending per subscription household combined with growth in the emerging IPTV market will propel the subscription tv market in China during the next five years. It is forecast that the number of IPTV households will grow from 6.8 million in 2010 to 30.0 million in 2015. This growth will propel overall television subscription spending in China, which will grow at a CAGR of 19.2 per cent. 

Internet advertising: China, which ranked fifth in Internet advertising in 2010, will pass Germany and the UK during the next five years to become the third-largest market in the world. Strong economic growth and a huge potential audience will generate a 26.6 per cent compound annual increase to $11.2 billion in 2015.