PWC Finds 3.1% Growth For The U.S. Media And Entertainment Industry
Radio Up 4.1%, Music Fell 0.6%
June 12, 2012 at 3:51 AM (PT)
A new study from PRICEWATERHOUSECOOPERS finds the media and entertainment industry in the U.S. grew 3.1% last year, the second straight increase, with online advertising leading the way. BUSINESSWEEK reports, "the gain was smaller than the 3.5% that NEW YORK-based PWC forecast a year ago in its annual industry overview. This year, U.S. media revenue will climb 5.6% to $489.9 billion on advertising for U.S. elections and the SUMMER OLYMPICS in LONDON, the company said today in a statement."
Double-digit percentage gains in Internet spending will propel the industry as radio, television, movies, publishing and newspapers embrace digital distribution models, PWC said.
"In the near term, economic prospects are mixed but should improve and lead to growth in the sector," said PWC Global Leader/Entertainment And Media Practice MARCEL FENEZ.
It was a 3.6% rise worldwide, to $485.7 billion last year, with digital advertising showing a 19% increase. PWC forcasts Internet advertising in 2012 to gain 17% to $105.4 billion.
Some Specific Radio Findings
* The overall radio market in the U.S. will total $22.5 billion in 2016, increasing by a 4.1% compound annual rate from 2011.
* Continuing improvement in economic conditions combined with expansion of HD Radio in the U.S. and increased penetration by Internet radio in the U.S. and CANADA will benefit terrestrial radio. At the same time, the continuing rise in auto sales will help to drive the growth of satellite radio spending.
* Terrestrial radio advertising decreased by 0.1%. Automotive and political advertising will spur growth in 2012 before settling back slightly to more-modest increases for the remainder of the forecast period to reach $18.2 billion in 2016, a 3.0 compound annual increase from the $15.7 billion registered in 2011.
* Broadcast advertising will increase at a 2.7% compound rate through 2016, while online advertising will grow by 11.5% on a compound annual basis from $465 million in 2011 to $802 million in 2016.
* Satellite radio advertising will increase from $74 million in 2011 to $116 million in 2016, a 9.4% compound annual increase.
* As a result, radio advertising as a whole will total $18.3 billion in 2016, up 3.1% on a compound annual basis from 2011.
* Satellite radio subscription spending will expand from $2.6 billion in 2011 to $4.1 billion in 2016, a 9.3% increase compounded annually.
* The overall satellite radio market, including advertising, will grow by 9.4% compounded annually to $4.3 billion in 2016.
* The radio market in the U.S. will increase by 4.1% on a compound annual basis from $18.3 billion in 2011 to $22.4 billion in 2016.
Some Music Specifics
* The recorded music market in the U.S. fell by 0.6% in 2011, its smallest decrease in years, as growth in digital distribution nearly offset a moderating decline in physical spending.
* Declines in physical distribution will remain at single-digit levels, as the remaining market increasingly consists of people who prefer physical music. During the forecast period, physical distribution will drop from $3.4 billion in 2011 to $2.2 billion in 2016, an 8.0% compound annual decrease.
* Streaming services will boost digital spending. Digital distribution will overtake physical distribution in 2012, and will rise at an 11.7% compound annual rate to $5.5 billion in 2016 from $3.1 billion in 2011.
* Total spending on recorded music will begin to expand in 2012 and will rise at a 3.4% compound annual rate to $7.7 billion in 2016 from $6.5 billion in 2011.
* New venues and growth in festivals will propel spending on live music. As a result, spending on concerts and music festivals will expand at a 7.0% compound annual rate from $8.7 billion in 2011 to $12.2 billion in 2016.
* The overall music market in the U.S. will rise to $19.8 billion in 2016 from $15.2 billion in 2011, a 5.5% increase compounded annually.
* The U.S. market rose 3.4% in 2011, benefiting from a rebound in live music that offset a modest decrease in recorded music. PWC expects growth to average 5.5% compounded annually from $15.2 billion in 2011 to $19.8 billion in 2016.