The global entertainment and media (E&M) industry has entered a solid growth phase and will increase at a 6.6 percent compound annual growth rate (CAGR) to reach $1.8 trillion in 2010, according to the PricewaterhouseCoopers "Global Entertainment and Media Outlook: 2006-2010" report. The internet will remain the fastest-growing advertising medium globally, with an 18.1 percent CAGR, reaching $51.6 billion in 2010, the Outlook says.

Online advertising will constitute nearly 10 percent of global advertising in 2010, compared with less than 3 percent in 2002, according to PwC. Global advertising will increase at a 6.2 percent CAGR during the forecast period, to $521 billion in 2010 from $385 billion in 2005. Growth improvement achieved during the past two years will be sustained through 2008, but more moderate increases are projected during 2009-10 as the current economic recovery in many countries begins to falter.

Digital technologies, mainly broadband internet and mobile, are becoming established and increasingly lucrative distribution channels that are changing the way consumers acquire entertainment and media content, the report says. Global spending via online and wireless channels reached $19 billion in 2005 and will increase to $67 billion by 2010, the Outlook says.

In 2005, the broadband universe totaled 187 million households, up from only 30 million in 2001. By 2010, there will be an additional 246 million broadband households, bringing the total to 433 million globally. The number of people with a wireless telephone subscription is also growing rapidly, with a total of 1.8 billion globally in 2005. That figure will rise to 2.8 billion by 2010, adding one billion potential customers to mobile content during the next five years.

"Virtually every segment of the entertainment and media industry is shifting from physical distribution to digital distribution of content," said Wayne Jackson, global leader of PricewaterhouseCoopers' Entertainment & Media Practice. "As this shift continues, we see more revenue opportunities for entertainment and media companies. So while physical distribution of content is declining, that decline will be offset somewhat by digital distribution, which is driving and creating new growth opportunities."

"We expect that Asia Pacific will remain the fastest-growing region for the industry, reflecting both the underlying economic growth and local developments and initiatives. The growth will be led by double-digit increases in internet, TV distribution, casino and other regulated gaming and videogames," said Marcel Fenez, Asia Pacific leader of PricewaterhouseCoopers' Entertainment & Media Practice. "Significantly, we also expect that the People's Republic of China will pass Japan in 2009 to become the largest market in Asia Pacific."