Media sector set to grow

Friday 08 August 2008

Media sector set to grow

Natalie Apostolou

The value of the Australian entertainment and media sector will increase annually by 5.8% to $31.2bn by 2012, although economic uncertainty will put the brakes on growth, according to a report published this week.

The PricewaterhouseCoopers Entertainment and Media Outlook predicted that subscription television and the internet will enjoy the greatest rates of consumer spending growth, although recorded music sector will suffer a 1.5% decline.

Political advertising and a buoyant economy helped ad spend rise by 11.5% last year, with a further 5.2% growth until 2012 forecasted to boost the sector’s value to $15.2bn.

However, PwC said that economic turbulence will “subdue revenues in the near term” and warned that the growth in display advertising was being pressured by marketers’ demands for performance- based pricing models.

PwC said that newspapers will continue to be under threat from the internet, with the sector’s growth edging up by 1.43% a year to 2012. Free-to-air TV is set to grow annually by 3.8% over the next five years, radio will increase by 3% a year and outdoor advertising is primed for a 6% annual jump, thanks to new ad formats and its ability to catch time poor consumers.

David Wiadrowski at PwC, said: “Sectors are responding strategically to the challenging conditions with collaborative ventures, new content, new business models and new delivery channels.”

“Frequently, these alliances are between traditional competitors, collaborating because there is strength in numbers and because securing a part of something is better than 100 per cent of nothing. The next step is working out how to make money out of these relationships.”

Steve Allen of Fusion Strategy said: “I think this report is reasonably accurate. We think 2009 will be a year of only slight growth, but we will bounce back n 2010.

“Nervousness in the industry is picking up a bit, the ride is getting a little bumpier now. Media owners are getting more pragmatic – look at the concentration of power that is happening now. But no-one is saying that things are getting much worse.