The annual PriceWaterhouseCoopers report on media and entertainment is an attempt at definitive guidance on trends in the next five years on spending. Its release today points to some significant developments:
1. Spending will rise at a relatively slow rate of 2.7 per cent through 2013, with most of the growth in 2012 and 2013, to reach $1.6 trillion worldwide.
2. Mobile and video game advertising will flourish, while conventional advertising will be flat.
3. The fragmented media model will lead to more tailored advertising.
"What we are sure about is that this recession will last longer than previous ones due to a steeper downturn and that the impact on consumer spending will be much steeper than in the past."
Data from the Interactive Advertising Bureau and PriceWaterhouseCoopers indicates a five-per-cent decline year-over-year in online advertising in the first quarter of 2009.
That marks the first such decline since 2002.
The $5.48 billion in spending was down from $5.72 billion in the first quarter of 2008, but industry experts believe the setback is temporary and owing to the recession. While legacy media advertising declines are far steeper in the U.S., the online downturn is relatively mild.
Will people pay for online content? Yes, but not necessarily for news.
More details have emerged at an international newspaper industry meeting on the recent PriceWaterhouseCoopers study (finally released in PDF form here) of seven countries and their attitudes toward paying for online content.
The report finds that the abundance of content online diminishes the prospects for charging consumers for it --- the report's author told Poynter that the "market is disturbed" by so much freely available content --- but that specialized content on particular topics has a chance.
In the years ahead, consumers will spend more on the Internet, and that will make it easier to persuade them to pay for content. What's more, e-commerce is an opportunity for newspapers --- consumers suggest they'd be willing to buy a book or book a trip through the paper.
One other major point: Consumers expect to be part of the conversation with papers about content.
A PriceWaterhouseCoopers report released Monday says newspapers will survive, but that they'll have to transform themselves into hyperlocal entities with extensive online operations.
They'll be smaller, there will be fewer of them, but they will not easily garner support. On the other hand, the brand is more important than the medium, so strong brands will endure if operated well. Print will continue to be the principal revenue generator for some time to come.
The newspaper/Web operation of the future needs to examine the content realms that offer opportunities for subscription support. One sleeper issue: sustainable production methods are important. But people are prepared to pay for high quality, it says.
"Newspapers have a long-term future and will coexist with other media. However this is unlikely to be either in the formats or volumes seen today and there will some casualties and losses of well-known papers along the way," the report says.
The over-50 generation will continue to nurture and support traditional media, and if anything their loyalty and longevity ought to help ensure survivability and transition. That conclusion comes from an analysis of a further public release of information from last week's massive annual PricewaterhouseCoopers media and entertainment forecast.
The population growth of the older-than-50 cohort will "help sustain traditional formats," the report notes.
For some time demographers have tried to reassure the doomsayers about conventional media. People are living longer, more prosperously, and more leisurely into their 60s, 70s, and 80s. Presumably they will continue to consume through patterns and habits the media they grew old with and be less inclined to adopt new formats.
Unquestionably the growth of sub-30 populations is fueling an enormous rise in new media consumption. But the PwC report indicates a balancing factor is the ongoing support of the older generation.
The annual massive PricewaterhouseCoopers report on the entertainment and media industries out today is music to the ears of traditional media.
"The oft-reported death of traditional media remains greatly exaggerated," the report notes.
While there is no question digital revenues will grow strongly in the years ahead, the report says conventional television's revenues will, too (if not at the same clip).
Media revenue overall will hit $2.2 trillion by 2012. Of that, digital and mobile revenue will account for only about 11 per cent.
The hardest hit of all media will be the music industry, PwC forecasts.
As for newspapers, the report predicts that Web revenue will account for about 15 per cent in the U.S. by 2012. Revenue will grow, albeit at a rate of less than three per cent, worldwide.