Global entertainment industry set for rebound, says PwC report
Digital distribution of content, aided by rising broadband penetration, will be the greatest driver of new entertainm
Intelsat announced today that at 2:44 a.m. EDT the Intelsat 905 satellite was successfully launched aboard an Ariane 44L vehicle. The satellite is expected to be operational in July.
The Intelsat 905 launch is the fifth in a nine-satellite campaign to replace and significantly add to existing capacity by the end of 2003. The 905 satellite will be deployed at 335.5?E and will offer capacity for telephony, corporate networks, Internet, video and hybrid space/terrestrial solutions to customers on its 72 C-band and 22 Ku-band transponders (measured in 36 MHz equivalent units). The satellite will provide high power Ku-band spot beam coverage for Western Europe and much of North America and additional C-band capacity to customers in Europe, the Middle East, Africa, North America and South America.
Intelsat Ltd CEO Conny Kullman stated: "The successful launch of the Intelsat 905 to 335.5?E marks not only the one year anniversary of the beginning of our current launch campaign, but also an historic anniversary for Intelsat. The 335.5?E orbital slot, our first location, also served as the location of our first satellite, Early Bird. We expect that the Intelsat 905 will follow in the footsteps of its predecessors by providing reliable and powerful communications solutions to our customers for years to come. "
The Intelsat 603 currently holds the 335.5?E orbital slot but will be moved to 178?E to create a new satellite role at that location.
Intelsat‘s next launch, the Intelsat 906 satellite, is scheduled to take place from French Guiana, aboard an Ariane 44L launch vehicle, during the third quarter of this year.
Mumbai and Delhi will lead the country in the growth of CAS. Kolkata will be slow in catching the trend, and Chennai will comprise mostly of fence sitters, content with its bundle of FTA channels.
These are a few observations that rating agency TAM is using currently to gauge the CAS mood in the country. With the imminent merger of the two ratings agencies in the country, TAM, backed by Nielsen‘s Media Research (NMR) will become the only resource for advertisers and broadcasters alike in tracking consumer preferences on the tube.
Preliminary research conducted by the agency indicate that while Mumbai and Delhi, which caught on fast onto cable and satellite TV, will also see the highest growth of CAS, Kolkata which was one of the slowest to catch the C&S train, will be a slow market in responding to CAS. Chennai, TAM research shows, enjoys the benefits of FTA basic channels, ensuring that most of its potential CAS users will be fence sitters.
TAM India CEO L V Krishnan says the agency already has technology experts from NMR help it in tracking the Indian market during the growth phase of CAS. Most complex TV markets, including the US, also have CAS set top boxes with NMR tracking viewership on a daily basis, with the peoplemeter attached to the tuner of the set top box instead of the TV tuner, he says.
The initial phase will be a hectic one for TAM though, with frequent base-lines to estimate the penetration of CAS, resampling and monitoring changes in viewing behaviour across CAS homes.
From the two discrete universes within TV homes - C&S and terrestrial, CAS will necessitate a move to three universes -
After CAS, we will move from two universes to three Terrestrial C&S : in 4 metros
- FTACS (Free To Air C&S)
- CAS C&S
C&S : Other (Rest of the country)
The early days of CAS will also see instability in household statuses as homes would either take long to take a decision, flirt with several channels before narrowing their choices to a few or those who convert to CAS only if there is a big event and are otherwise content with FTA channels.
Nor will CAS distribution be equitable, says TAM. While lower SEC homes could get bogged down by costs of the boxes and subscriptions, metro markets with multiple MSOs could see feverish CAS marketing activity vis a vis metros dominated by one or two cable ops, says a TAM study.
- It observes that CAS homes may move primarily to an analog set top box for cost reasons rather than a digital set top box enabling only a one way communication between the cable room and the CAS home. This will enable information about the penetration for each of the pay channels, says the study.
Digital distribution of content, aided by rising broadband penetration, will be the greatest driver of new entertainment and media spending in 2005-2006, says the just released PricewaterhouseCoopers‘ "Global Entertainment and Media Outlook 2002-2006".
The Outlook forecasts a gradual rebound with the ad market beginning to re-solidify in 2002, gaining strength in 2003, and turning out strong single digit growth during 2004-2006 worldwide. While global ad spend will increase at 4.8 per cent, global entertainment and media (E&M) spending will reach $1.4 trillion in 2006, for a 5.2 per cent compound annual growth rate (CAGR) over the next five years, says the report.
PricewaterhouseCoopers anticipates that global E&M spending will reach $1.4 trillion in 2006, for a 5.2 per cent compound annual growth rate (CAGR) over the next five years. Near-term economic weakness and slow labour force growth in the Asia/Pacific will however hold growth to low single-digit rates, says the report. The market, already the largest on a global basis, will expand from $208 billion in 2001 to $261 billion in 2006, averaging 4.7 per cent compound annual increases, it says.
"Digital evolution" will positively affect the TV distribution sector for the length of the forecast period, with upgrades to digital cable and satellite boosting subscription spending, especially in regions where cable and satellite penetration are already high. Subscriber growth will also drive spending in regions with low multichannel penetration, says the report.
In 2001, the Outlook says, the global E&M industry grew by 1.5 per cent, exceeding the $ 1 trillion mark, notwithstanding dotcom failures, a global market downturn and the events of 9/11, says the report. Piracy and unauthorised use of copyrighted material will continue to limit growth throughout the forecast period, especially in recorded music. Unless an industry-wide solution is reached, piracy issues will begin seriously affecting other major E&M sectors, including filmed entertainment, home video and consumer book publishing.
REGIONWISE GROWTH
Asia/Pacific‘s E&M industry will be fueled by telecommunications deregulation, low Internet penetration levels that leave room for substantial growth (a 17.3 percent CAGR is expected), as well as government initiatives to promote Internet usage. In addition, the 2002 World Cup in Japan and Korea will bolster the Sports market.
The market, already the largest on a global basis, will expand from $208 billion in 2001 to $261 billion in 2006, averaging 4.7 percent compound annual increases.
The US, the largest market in terms of overall entertainment and media spending at $438 billion in 2001, is projected to expand at a 5.5 per cent CAGR through 2006. Internet Advertising and Access Spending will enjoy significant growth, due mainly to broadband and subscriber upgrades to higher-priced access packages. This segment will experience double-digit compound annual growth of 10.8 per cent in the US, with spending jumping to $40 billion by 2006. With digital cable and DBS comprising 73 per cent of multichannel subscribers, TV distribution spending will soar to $100 billion in 2006.
Europe, Middle East and Africa (EMEA) is the second largest region with 2001 E&M spending of $339 billion. The Internet will be the fastest growing segment, followed by Sports, which will be bolstered by the 2006 World Cup in Germany and its associated television rights. EMEA will continue to experience moderate growth for the duration of the forecast period, with spending reaching $426 billion by 2006.
Canada, the smallest region with $24 billion in entertainment and media spending in 2001, is expected to be the fastest growing, at 5.7 per cent CAGR. Primary drivers have been an advertising market that has held up relatively well despite the global economic downturn; a healthy home video and film production business; and the establishment of new digital channels.
SECTORWISE GROWTH
Television Networks (Broadcast and Cable) - Projected advertising rebound, teamed with new channel launches, will drive growth. Canada will experience greatest the growth rate - 8.7 per cent - while US spending is expected to reach more than $54 billion by 2006. Globally, television networks will peak at $144 billion in 2006.
TV Distribution (Station, Cable and Satellite) - "Digital evolution" will positively affect this sector for the length of the forecast period, with upgrades to digital cable and satellite boosting subscription spending, especially in regions where cable and satellite penetration are already high. Subscriber growth will also drive spending in regions with low multichannel penetration. Global spending will rise to $210 billion by 2006, growing at a 6.9 per cent CAGR.
Filmed Entertainment - Spending worldwide will be fueled by strong box office receipts, boosted by the expansion of local productions. DVDs will continue to boost the home video market, but the category will be adversely affected by piracy. The filmed entertainment segment will expand at a 5.7 per cent CAGR, increasing from $59 billion in 2001 to $79 billion in 2006.
Internet Advertising and Access Spending - Fastest growing segment over the next five years, expanding by 12.1 percent CAGR to total $94 billion in 2006, up from $53 billion in 2001. The principal drivers will be increased broadband availability and rising online penetration, while a strong e-commerce market will lead to a rebound in online advertising.
Sports - The biggest driver over the forecast period will be the World Cup in 2002 and 2006 (football obviously), and rising television rights fees. However, financial problems for European rights holders will result in a decrease in rights fees in non-World Cup years. The segment will grow at a 6.6 per cent average rate, rising to $50 billion in 2006 from $36 billion in 2001.
From music to alternative healing, etc seems determined to innovate in a bid to bring in the viewers.
Claiming supremacy among the current crop of music channels with statistics for the week ended 4 May (17 of the top 25 programmes on music channels during the week are from the etc stable, according to TAM), the channel is now diversifying into untrodden territory. Gagar Mein Sagar to commence telecast this Sunday at 1 pm, deals with various forms and aspects of alternate medicines and remedies.
Writer Kamini Khanna and spiritual healer and vaastu consultant Shankar Bable will anchor the show that deals with and explores popularly practised subjects like Feng Shui, Vaastu Shastra, Crystal Therapy, Medical Astrology, Pyramid Therapy, Acupressure, Tarot Card Reading, Signature analyses and Acupuncture. The programme will also educate the viewers about the significance and reality of Totka (casting spells), says the channel.
A film based show, On Air will tackle films scheduled for release, invite artistes and directors of the film on the show to talk about their experience and expectations from the film. The show takes off next Monday at 8.30 pm with superstar Amitabh Bachchan talking about his film Hum Kissi Se Kam Nahin.
etc‘s third new show to begin in June belongs to a genre tried and tested on the channel. Sun n Dance Hour has one hour of non-stop remix songs from old and new films and music albums, to be telecast every Saturday at 8 pm with repeats on every Sunday at 10 am.
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