PWC Predicts Rosy Future for Internet Content

Revenues from Web ads and access will grow faster than TV, sports,film and theme parks over the next five years, according to a new study.

While current worries about the economy may have dampened growth predictions for 2001, the online ad and media industry’s long-term prospects remain bright, according to a recent study by PricewaterhouseCoopers.

In the firm’s latest “Entertainment and Media Outlook” study, analysts are predicting that the Internet will experience continued growth in both advertising and access revenues, despite the recent drop in Internet sector market values.

Over a five-year forecast period, PWC’s anticipates a 7.1 percent compound annual growth rate for the generic media and entertainment industry — with online advertising leading the charge by producing growth rates of nearly double that.

“The Internet now plays a key role in the business model of virtually every entertainment and media industry segment,” said Kevin Carton, global leader of PWC’s entertainment and media practice. “As with any new distribution model there is some turbulence, but we believe in the Internet’s transformational impact on this industry — particularly as a distribution medium given increasing broadband and wireless access.”

Not only will the U.S. online advertising and Web access market rebound to see 14 percent CAGR by 2005 — when it hits $38 billion — Carton says that Internet advertising and access spending will grow faster than any other segment of media and entertainment in the world — including sports, film, television and theme parks.

That’s great news for players like AOL Time Warner, Terra Lycos and Excite@Home, which make money both from access and from ads (though Excite@Home has publicly said it plans to reduce its Web media business, citing concerns over near-term losses.)

Additionally, PWC said it’s expecting double-digit growth in the amount spent globally on Web advertising and access, with overall income jumping from $40 billion in 2000 to $90 billion in 2005.

In Latin America, PWC analysts said they expect increasing Web access to transform the smallest online ad market into the fastest-growing, with a projected 40.6 percent CAGR. Meanwhile, the Asia-Pacific region will follow at 26.3 percent CAGR, while the Europe, Middle East and African market will be see a 17.4 percent compound annual growth rate.

“Online distribution of content will continue to be a principal driver of growth, creating opportunities throughout all segments of the entertainment and media industry, which in itself is a key component of the world economy,” Carton said.

Subscribe to get your daily business insights

Whitepapers

US Mobile Streaming Behavior
Whitepaper | Mobile

US Mobile Streaming Behavior

5y

US Mobile Streaming Behavior

Streaming has become a staple of US media-viewing habits. Streaming video, however, still comes with a variety of pesky frustrations that viewers are ...

View resource
Winning the Data Game: Digital Analytics Tactics for Media Groups
Whitepaper | Analyzing Customer Data

Winning the Data Game: Digital Analytics Tactics for Media Groups

5y

Winning the Data Game: Digital Analytics Tactics f...

Data is the lifeblood of so many companies today. You need more of it, all of which at higher quality, and all the meanwhile being compliant with data...

View resource
Learning to win the talent war: how digital marketing can develop its people
Whitepaper | Digital Marketing

Learning to win the talent war: how digital marketing can develop its peopl...

2y

Learning to win the talent war: how digital market...

This report documents the findings of a Fireside chat held by ClickZ in the first quarter of 2022. It provides expert insight on how companies can ret...

View resource
Engagement To Empowerment - Winning in Today's Experience Economy
Report | Digital Transformation

Engagement To Empowerment - Winning in Today's Experience Economy

1m

Engagement To Empowerment - Winning in Today's Exp...

Customers decide fast, influenced by only 2.5 touchpoints – globally! Make sure your brand shines in those critical moments. Read More...

View resource