Pricewaterhouse Coopers Notices We're Going Digital

Pricewaterhouse Coopers has released its annual Global Media & Entertainment Outlook and, though the fact that we’re going digital isn’t lost on anyone reading this, what does jump out from the study is how rapidly this acceleration is happening, and how the revenue numbers shake out as we shift away from analog media technologies, like anything printed on paper.

The study, which purports that its crystal ball can look all the way out to 2013, predicts the following compound annual growth rates for U.S. media and entertainment revenue categories listed below in descending order, ending with — all together now! — newspapers:

• Internet access: 9.1 percent.
• Internet advertising: 6.3 percent.
• Video games: 5.8 percent.
• TV subscriptions: 5.5 percent.
• Filmed entertainment: 3.3 percent.
• Out-of-home advertising: 2.5 percent.
• Consumer and educational book publishing: 0.7 percent.
• TV advertising: -0.6 percent.
• Consumer magazine publishing: -1.7 percent.
• Radio: -2.2 percent.
• Business-to-business publishing: -3.3 percent.
• Recorded music: -4.7 percent.
• Newspaper publishing: -5.9 percent.

In total, the report predicts that in the U.S., consumer spending on media and entertainment will grow by 1.9 percent, while ad spending will actually shrink, declining by 1.7 percent, from $189 billion this year to $174 billion in 2013. In other words, if you’re looking for advertising revenue to solve your way out of this media recession, PwC doesn’t think that’s the answer, unless you’re in the online world — the report predicts that digital advertising will account, domestically, for 19 percent of ad spending by 2013, as opposed to 13 percent today.

When we look back at this report, however, I wonder about the following: before 2013, will we see the emergence of a category called “digital subscriptions”? Right now, we’re in a phase where there’s a lot of talk about some online content being fee-based, but there’s not a lot of action. On the other hand, it seems clear now that even with an increase in online ad spending, many online media properties won’t make it without additional revenue streams, and if fees are going to kick in, it’ll happen pretty soon. In fact, if you listen to Barry Diller, who also made a five-years out prediction today, we’re in the sunset of the Internet’s time as a, well, free-for-all.