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Canadian media revenues steady 'til 2012: PwC

Entertainment and media markets in Canada will stay vibrant, with steady revenues projected for the next five years, according to PricewaterhouseCoopers' newly released "Global Entertainment Media Outlook." But the most money will be up for grabs by the segments that take advantage of digital and mobile opportunities.

The annual report gives analyses and forecasts for 15 major industry segments across five regions of the globe - the US, EMEA (Europe, Middle East, Africa), Asia Pacific, Latin America and Canada. (Note: All growth and decline rates are based on compound annual growth rates. All figures are in US dollars.)

As a whole, Canada's entertainment and media market grew by 5.2% in 2007, down from the 8.6% rise in 2006. The market will expand at a 5.8% rate to $54 billion in 2012 from $41 billion in 2007. Globally, the industry will grow at 6.6%, reaching $2.2 trillion in 2012.

Tracey Jennings, leader of the PwC Canada entertainment and media practice, says the biggest movements and highest growth in ad spends "will come from those who leverage their existing consumers and advertisers and take them into the world of new media, enabling consumers to access content on any platform.

"Yet we cannot lose sight of the growing 50-plus demographic, who will continue to consume the media in the format they have become accustomed to," says Jennings. "This older generation will balance out the new Net generation - meaning traditional media will continue to be significant. The question now is how advertisers are going to leverage all these different media, combined or stand-alone, to engage the individual customers and their unique media consumption styles."

Here's MiC's breakdown of the report by segment...

Internet:

In Canada, Internet advertising (both wired and mobile) grew 33.2% to $1.3 billion in 2007. By 2012, PwC reports Internet advertising will likely remain Canada's fastest-growing segment at 21.1% (to $3.4 billion). That's higher than the company's estimate for global growth of 19.5% through to 2012.

Canada was the only region that did not record a double-digit gain in Internet access growth (wired and mobile). That segment slowed to 7.7% in 2007, but it is expected to grow by 10.6% by 2012 to $5.6 billion.

Jerry Brown, director responsible for PwC's Canadian media and entertainment practice, says that with broadband penetration already very high in Canada, broadband access spending growth hit a moderated level. "However," he adds, "it is a key driver of the increases we are seeing in Internet advertising. Keyword search, classified advertising and online video advertising - full-motion video ads shown on the Internet - will be the fastest-growing components. In the mobile market, wireless network upgrades will similarly drive mobile advertising."

Video games:

Video games on next-gen consoles and growth in online and wireless games will fuel the overall growth in gaming. Almost half of advertising and end-user spending will come from online and mobile by 2012, reports PwC. The overall video game market was the second fastest-growing segment, rising 26.5% to $1.3 billion. PwC states the segment will slow over the next five years, with a growth rate of 9.2% (to $2.1 billion). End-user spending on video games will increase from $1.2 billion in 2007 to $1.8 billion in 2012, growing by 8.3%. Advertising revenues in video games will more than double, from $104 million in 2007 to $237 million in 2012.

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