Report: Online Media, Entertainment Thriving Despite Piracy

The online distribution of music, films, books, and video games is driving growth in the online media and entertainment industries, despite the threat of piracy.
Under pressure from piracy and the illegal copying of content, the online media and entertainment industries are being reinvigorated by new drivers including the online distribution of music, films, books, and video games, according to a report released Wednesday.

PricewaterhouseCoopers' Global Entertainment and Media Outlook: 2005-2009 cited key drivers as broadband Internet and wireless technologies. "The entertainment and media industry continues to display an extraordinary ability to reinvent itself and create new revenue streams through innovative offerings that barely existed as recently as 2000," said Wayne Jackson, global leader of the firm's Entertainment & Media Practice, in a statement.

"Online and wireless video games, online film rental subscriptions, licensed digital distribution of music, and the rapid adoption of ring tones and mobile music downloads are becoming critical components of the industry and driving significant revenues across all regions."

One caveat, however, is the looming threat of piracy, particularly in Asia and South America. The company's Marcel Fenex, leader of its Asia/Pacific entertainment and media practice unit, noted that efforts to combat piracy have had limited success. The firm observed that an increased amount of entertainment company content is being licensed to digital distribution services and that trend will work to soften piracy's negative impact.

The Asia/Pacific region is expected to enjoy the fastest growth, hitting double-digit expansion rates in the Internet, video games, casino gaming, television distribution, and recorded music.

The report predicts that spending streams stemming from broadband and wireless technologies will jump from $11.4 billion in 2004 to nearly $73 billion by 2009.

In areas of Internet access and advertising, Pricewaterhouse Coopers said broadband will pass the dial-up market in the period. And, while the firm is expecting broadband subscriber growth to boom in Asia, it predicts access spending will be slow in the U.S. and Canada, where broadband penetration is approaching saturation.

Looking at the overall entertainment and media industry, PricewaterhouseCoopers expects it to grow at a 7.3 percent compound annual growth rate to $1.8 trillion in 2009.

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