London, UK (June 23, 2008)--A five-year forecast by PricewaterhouseCoopers states that "the challenges are too significant and the demand for innovation too complete" for entertainment and media companies to successfully go it alone.
Entertainment and media (E&M) companies hoping to drive growth over the next five years will need to accommodate dramatic changes in devices, market and consumer behavior through striking strategic business alliances, according to PricewaterhouseCoopers' Global Entertainment and Media Outlook: 2008-2012.
The report also underscores the importance of continuing to extract revenues from traditional business segments while emerging technologies continue to solidify their consumer position. The annual report pegs global compound annual growth rate (CAGR) at 6.6 percent for the sector, anticipating it reaching $2.2 trillion in 2012.
Several critical technologies will deeply influence the pace and direction of entertainment and media growth over the next five years, states the report, including broadband penetration and mobile expansion. Modern movie houses, digital cinemas and 3-D upgrades are enhancing the cinema-going experience, while high-definition TV subscriptions and a resolution of the high-definition DVD format wars will invigorate digital living rooms.
While digital and mobile are driving growth, established and traditional business segments will continue to dominate revenues, with the exception of recorded music, where digital distribution will surpass physical distribution in 2011, the report says.
The so-called Net Generation is driving the technology engagement of prior generations, connecting older generations with the latest trends in emerging media technology, a global phenomenon to which companies are increasingly paying attention. In the BRIC countries (Brazil, Russia, India, China), people under the age of 25 comprise between 31 and 50 percent of the total population.
Over the next five years, Asia Pacific and Latin America--led by Colombia--will be the fastest growing regions. E&M markets across 15 countries will expand at double-digit annual rates during the next five years, with Saudi Arabia and the Pan-Arab region experiencing the fastest growth. The U.S. currently remains the largest but slowest growing E&M market.