Little wonder why most of the large broadcasting companies are focusing their attention on India and China. A recent report released by the consultancy firm, PricewaterhouseCoopers (PwC) has categorically stated these two markets are key growth drivers for the entertainment and media (E&M) industry.
The global E&M industry is expected to grow at 6.3 per cent to $1.7 trillion by 2008 with the Asia-Pacific markets led by India and China expected to grow at 9.8 per cent to touch $ 366 billion.
According to the Global Entertainment and Media Outlook: 2004-08, "Asia Pacific is emerging as a key driver of E&M industry growth fuelled largely by India and China, both of which are investing heavily in communications and media infrastructure and opening up their markets. Both countries have huge populations and low media penetration, providing significant room for expansion."
"We're expecting Asia Pacific to be the fastest-growing region in the world during the next five years as a result of several exciting opportunities for industry growth and expansion, particularly in India," said Mr Deepak Kapoor, PwC India Leader for the E&M Practice.
While in the Asia Pacific region, video games and Internet will be the world's largest and fastest growing segments, television distribution will benefit from the addition of 96 million multi-channel households in India and China. However, piracy continues to be a dampener and efforts to stem its effects, combined with domestic and foreign industry investments will drive growth in the region.
In terms of size, the US continues to remain the largest market and is projected to rise at 5.4 per cent to reach $680 billion in 2008 while markets in Europe, West Asia and Africa are expected to grow at a marginally higher rate of 5.5 per cent to touch $549 billion.
The PwC report also added that there is a shift in the way entertainment is being distributed with broadband Internet access and wireless communications driving the growth. During the next five years, the number of broadband households will grow at a 31.3 percent, surpassing the 300-million mark for the first time in 2008, it added.
Also next-generation technologies will reinvigorate maturing segments. "Digital television is replacing analogue, thus expanding the potential market for advertisers and subscribers; online and wireless video games are bridging the gap until the introduction of new console platforms scheduled for 2006-07; and digital audio broadcasting and satellite radio are helping attract new national advertisers. Additionally, DVDs have revitalized home video, with rapid growth in the sell-through market driving growth at the expense of rental," said the report.
The advertising industry is also likely to remain buoyant. Global advertising spending is likely to increase by 5.3 per cent during the 2004-08 period, to touch $412 billion. Television advertising is projected to expand at a 6.5 per cent to touch $164 billion by 2008 boosted by new channels as well as advertising associated with the Olympic Games, and the FIFA World Cup.
Also, Internet advertising spending is expected to rebound. "In India telecommunication infrastructure investment will expand the Internet access, which will fuel the growth in Internet advertising spending," said Mr Kapoor.