This story was written by David Kaplan.
Despite daily evidence of slowing online ad growth, internet revenues will represent the highest growth levels of overall media worldwide, averaging 19.5 percent annually through 2012, according to PricewaterhouseCoopers' annual Global Entertainment and Media Outlook. Last year, PwC expected internet advertising and access spending would grow an average of 13.4 percent through 2011nevertheless, those numbers are a far cry from 2006 to 2007, when PwC noted that advertising rose 37.9 percent. In general, PwC expects worldwide revenues to hit $2.2 trillion by 2012, with annual growth averaging 6.6 percent each yearup slightly from 2007's expectation 6.4 percent average annual growth.
-- Digital's market share to remain small: Although digital and mobile distribution accounted for only 5 percent of global entertainment and media spending in 2007, these revenues will account for 24 percent of all growth throughout the industry to 2012. By that year, PwC predicts, digital and mobile revenues will account for just 11 percent of total entertainment and media spending, or $234 billion of the $2.2 trillion global market. In comparison, by 2012, digital and mobile revenues will account for 10 percent of total E&M spending in the U.S., or $75 billion of the $759 billion U.S. market. Still, revenue devoted to online and portable devices is going to continue to be the main driver of global media spending. Specifically for the U.S., internet ads are forecast to grow at a 15.1 percent annual growth rate (CAGR), followed by internet access (10.9 percent CAGR) and video games, which are set to expand at a 7.9 percent CAGR.
-- Digital passes CDs by 2011: When it comes to traditional media's dominance, music is the one exception. As PwC's report indicates, recorded music revenues are projected to drop 0.6 percent through 2012, though the sales in that area could start growing again by 2011, when PwC expects digital distribution to surpass CDs. Release
By David Kaplan