The Canadian entertainment and media market will grow to US$47 billion by 2011 — a compound annual growth rate of 5.6% — from the 2006 level of $36 billion, according to a new study from PricewaterhouseCoopers, with online movie rentals and advertising on specialty channels making some of the biggest gains.

In its annual five-year forecast, the Global Entertainment and Media Outlook, the consulting firm says the Canadian Internet advertising market will grow at a rate of 23.5% to $2 billion in 2011, fuelled by increased spending on Internet access. Video gaming, propelled by high broadband penetration, will expand at 9.4% to US$1.4 billion.

‘Canada has one of the highest broadband penetration rates in the world,’ says Jerry Brown, PwC director of the Canadian entertainment and media advisory practice.

‘Possibly as a result, online games represent a more significant segment of the gaming market in Canada than in other regions,’ he continues. ‘In 2006, the online gaming segment constituted 28% of the gaming market in Canada compared with 21% in Asia Pacific.’

The television network market is expected to expand at 4.5% to US$4.6 billion, while specialty channel advertising will expand by 7.6% to US$1.1 billion.

Film spending in Canada will grow by 4% to US$6.9 billion in 2011. Box-office spending will hit $1 billion, up 4.6%, while home sell-through will climb 3.7% to US$4 billion.

In-store rental will reach $1.6 billion, up a notch from $1.5 billion, while online rentals will skyrocket to US$285 million, up from only $12 million in 2006.

‘The arrival of digital distribution in the theatres will help open the market to Canadian and specialty films and enable them to find a larger audience as reduced duplication costs will allow for a wider release,’ says Brown. ‘Secondly, the industry is innovating with related products such as reduced prices for popcorn and soda on low-volume Tuesdays and screenings of events such as hockey games and opera.’

‘This provides exhibitors a chance to promote upcoming films and showcase theatre amenities,’ he adds. ‘In addition, theatres are driving revenues through co-promotions with businesses such as banks, leading to increased theatre traffic supported by the sponsoring partner.’

From Media in Canada