Traditional media face big challenges, warns report

OVER the next five years the entertainment andmedia sectors are set to grow by $1 billion (€720m) in Ireland to $5.6bn (€4.02bn), according to a report from PwC.

By the end of 2014 this rapidly emerging segment of the economy will deliver growth of 4.1% on a compound basis, driven mainly by the growth in broadband technology.

By the end of the period one third of all advertising revenues will come from the broadband platform and two thirds will be delivered by newspapers, television, etc.

Bartley O’Connor, senior manager, Entertainment & Media Practice at PwC, rejected the suggestion that the figures were bad news for traditional forms of the media, such as newspapers.

The trick for traditional media such as newspapers will be to “identify advertising business models that are able to withstand the continued pressure on advertising rates in the digital environment and on subscription models that capture the consumers preference for premium content.”

The 11th Entertainment & Media Outlook by PwC highlights the changes the growing impact broadband is having across the sector.

Significant changes in the pattern of consumer behaviour, now beginning to show signs of recovery, is also a key factor in the changes taking place, O’Connor said.

The findings show annual compound growth being achieved in the following categories:

* Internet access will grow by 11.7% to $728m €522.8m)

* Internet advertising will rise 16.3% to US$243m;

* TV subscriptions and licence fees will increase by 7% annually to $990m, and

* Video games will grow by 7% to $647m.

Meanwhile the Irish advertising market is set to fall by 5.1% in 2010, should stabilise in 2011 and return to growth from 2012.