Media revenue to hit $2.2 trillion by 2012: PwC

NEW YORK: Global entertainment and media revenue is forecast rising by
an average of 6.6 per cent a year to $2.2 trillion by 2012, boosted by
advertising-supported digital and mobile media and an explosion in the
adoption of broadband.

According to the PricewaterhouseCoopers (PwC) annual forecast released
on Wednesday, advertising tied to the burgeoning interest in watching
videos on the Internet and on devices, such as Apple Inc's iPod, will
account for 24 per cent of growth in the sector and is projected to
grow fastest at a compound annual growth rate of 19.5 per cent to
2012.

Total entertainment and media revenue growth is seen outpacing global
gross domestic product, which will increase 5.7 per cent, according to
the report.

Despite the acceleration of digital businesses, revenue from
traditional media venues such as television will still dominate global
market share, if not growth. Digital and mobile revenue will account
for only 11 per cent of total spending, or $234 billion, in the next
five years.

PwC's report presents a more stable view of large media and
entertainment companies. Those shares have sunk more than 13 per cent
since the beginning of the year - at a steeper rate than the Standard
& Poor's 500 Index - on fears that the weak economic climate could
curtail consumer spending and spark an advertising recession.

Last week, Lehman Brothers argued that with entertainment company
valuations near 10-year lows, it might be a good time for investors to
shop for deals, such as News Corp.

One surprise: Advertising on over-the-air television globally - the
sector viewed by Wall Street as one of the most vulnerable in a
weakened economy - is expected to rise 5 per cent on a compounded
annual growth basis to 2012, making it the most resilient to threats
posed by digital growth.

"The oft-reported death of traditional media remains greatly
exaggerated," according to the report.

The weakest area in the next five years will be the music industry.
Ravaged by online piracy, recorded music sales are expect to fall by
0.6 per cent to 2012, but is seen growing again by 2011, when digital
sales will overtake CD sales.

What's unlikely to be solved in the next five years? "While companies
are making bold moves to follow consumers into the digital/mobile
future, they continue to wrestle with the challenge of creating
business models that adequately monetize their efforts," the report
said.

PwC's report, which surveys 15 major industry segments in 59
countries, underscored a trend over the past few years. The United
States will continue to account for the biggest share of revenue by
country, or $759 billion by 2012, but will grow the slowest at about
4.8 per cent, outpaced by the Asia Pacific and Latin America.