E&M spending to grow at annual CGR of 5.5 per cent : PwC

Singapore consumer/ end-user spending, meanwhile, is expected to grow at a compound rate of four per cent to 2015, according to the latest Global Entertainment & Media Outlook 2011-2015 from PwC.

Greg Unsworth, Singapore technology, infocomm, entertainment and media leader at PwC Singapore, expects Singapore to continue to enjoy a rising share of digital revenues in entertainment and media in both advertising and consumer spending.

“Internet advertising’s growth of 17.2 per cent in Singapore will far exceed the global average at 13 per cent. Digital consumer spending will also outpace most countries' and see an increase in overall share in spending from 11 per cent in 2010 to 19 per cent in 2015.

“The high broadband and mobile internet penetrations may have accelerated the way for digitalisation in Singapore. However, it is the device revolution with the rise and availability of digital technology and content, particularly through social networking, that has created a new normal in the industry as consumers are empowered like never before,” he added.

By comparison, the aggregate global spending in entertainment and media is expected to rise from US$1.4 trillion in 2010 to US$1.9 trillion in 2015, a 5.7 per cent compound annual advance driven by economic growth, but masking the accelerating shift of spending from traditional to digital platforms.

Currently, digital accounts for 26 per cent of all spending but it is expected that digital’s share will rise to 33.9 per cent by 2015.

The report by PwC noted that the entertainment and media industry is emerging from the recession and has been profoundly changed - as the ongoing consumer migration has accelerated due largely to the device revolution.

2010 saw the global economy begin to recover from its steep decline in 2009. The improved economic conditions played a major role in the recovery of overall entertainment and media spending, which rose by 4.6 per cent.

Some countries, namely China and India, were largely unscathed by the global recession and experienced significantly higher growth rates in entertainment and media spending, but others who were, and are still burdened by high government debt or political unease, are struggling to grow at similar rates.

Advertising, the most cyclically sensitive of the three entertainment and media spending streams covered by PwC, recorded the largest year-on-year increase, at 5.8 per cent in 2010 from an 11 per cent slump the previous year. Overall global advertising will increase at a 5.5 per cent compound annual rate from US$442 billion in 2010 to US$578 billion in 2015, the research found. Singapore advertising revenue is expected to grow at a 4.8 per cent compound rate to 2015, with online advertising being the fastest growing component.

Unsworth noted that digital would account for 59 per cent of total entertainment and media industry growth over the next five years.

“The prospects for the entertainment and media industry in Singapore are bright, with Singapore ahead of the pack when it comes to digital enablement. This will allow late traditional players and new entrants to evaluate their digital positioning and collaborate for success in the digitally led future,” he added.

While there is a continued decline in physical spending in music, the digital market continues to grow and is expected to overtake physical spending by 2014.

Nevertheless, overall music spending is expected to fall at a 1.1 per cent compound annual growth rate of US$22 billion in 2015 from US$23 billion in 2010. Singapore will see digital recorded music revenue increase at a compound growth rate of 20.1 per cent to 2015.