There is good news and bad in the most recent study of global entertainment trends by consulting firm PricewaterhouseCoopers, which predicts Canada’s media market will enjoy ‘the most consistent growth’ over all other regions – at over 6% for 2005 to 2009. However, for key segments within that market such as filmed entertainment, the explosive rates of the last five years are projected to slow.

According PwC’s latest Global Entertainment and Media Outlook, compound annual growth in Canada’s filmed entertainment segment (which includes foreign and domestic sales at the box office, home video and online rental subscriptions) is expected to come in at 8.4% over the next five years. This is down from the 21.4% seen in 2000 to 2004.

PwC puts Canada’s 2004 spend at US$4.9 billion, which will grow to US$7.2 billion in 2009. (All spend numbers in the report consist of consumer spending and, where applicable, advertiser spending.)

Jerry Brown, director of PwC’s media and entertainment advisory services, says Canadian spending will slow because consumers here were early adopters of certain new products and have, in effect, been there, done that.

‘It’s a maturity issue,’ he says. ‘It’s fair to say there were a lot of multiplexes that went up in the years where we’re seeing the spectacular growth and basically we’ve now got all the multiplexes we can absorb for a while.’ Canucks were also among the quickest to adopt DVD technology.

U.S. filmed entertainment is projected to come in at 6.6%. ‘The first thing is the overall growth in the U.S. is likely to be a bit constrained by interest rates and other macroeconomic factors,’ says Brown. ‘The second thing is we’re just bigger consumers. They love their entertainment, [but] we particularly love our movies.’

The outlook for the network television and distribution segments is similarly trending downward from previous highs in the early part of the decade. However, the numbers do show compound annual growth for 2005 to 2009 at 5.4% and 5%, respectively.

The slowdown is again largely a matter of market maturation, says Brown, who points to Canadians being early and relatively heavy adopters of specialty channels and broadband Internet. He says the next challenge for these businesses will be finding ways to extend their market penetration. They will have to take advantage of new technology such as digital distribution as well as enticing consumers to transition to higher-priced subscriptions.

So where is all the expected growth? Online and videogames. In Canada, videogame and Internet advertising, together with access spending, will comfortably lead all others through 2009. Advertising will climb 16.4%, access spending 11.5%.

Brown says that as young people grow older they aren’t giving up gaming. And when new generations of players and the next round of consoles such as the PlayStation 3 and Xbox 360 are added to the market, gaming’s share of the entertainment pie will continue to grow.

But gaming’s growth doesn’t come at the expense of other segments, says Brown. ‘Much of the revenue growth you see in this report is about incremental revenue rather than direct substitution.’

He also sounds an optimistic note for the film and television industries. ‘People continue to like their movies,’ he says. ‘There’s clear evidence of high levels of sell-through for DVDs. The online subscription rental business is likely to grow considerably, which matches [growth in] broadband Internet connections and which would substitute for a decline in shop rentals.

-www.pwcglobal.com