PwC sees a media future driven by broadband and mobiles

Media & Marketing Emmet OliverThe growth of broadband and the profusion of mobile phones will be the biggest drivers of media growth in the next four years, according to the mammoth new media and entertainment outlook produced by PricewaterhouseCoopers.

Weighing in at 630 pages, the outlook is used by media companies around the globe to plot their spending plans and decide where their corporate priorities should lie.

While trends differ from region to region, one sentence in the outlook sums up the undeniable global trend. "Virtually every segment of the entertainment and media industry is shifting from physical distribution to digital distribution of content."

This change means that broadband-enabled homes and mobile phone handsets will become the key battle grounds of the future for media groups. The growth of broadband, one of the fastest in recent technological history, is arguably the key trend to be noted.

In 2005, the number of broadband-enabled homes totalled 187 million, up from only 30 million in 2001. By 2010, the figure will rise to 433 million globally. The growth of mobile phones will be equally dramatic - by 2010 it will be 2.8 billion handsets, compared to 1.8 billion only last year.

In terms of advertising, there is only really one show in town, concludes PwC's guide. Internet advertising will grow at 18 per cent a year between now and 2010. Internet advertising will be worth $52 billion by then. However, despite the strong growth, the internet will still be a poor relation of television, print and radio by 2010, making up just 10 per cent of the overall advertising pie.

In terms of geography, Asia Pacific will remain the fastest- growing region, but the US will remain the largest entertainment and media market.

One of the newer trends is the staggering growth of the video- game market, which is set to grow by 11.4 per cent a year. This sub-industry of the overall media sector will be boosted by new wireless phones capable of downloading games. There will also be rapid growth in online gaming and new casinos.

Despite gloomy scenarios that it is a sunset industry, newspapers will grow between now and 2010, but much of the growth will come from freesheets, which tend to have younger readerships.

As for circulation, it will rise between now and 2010, but not by much. In the US, for instance, it will only rise on average by 0.2 per cent a year. Newspapers will finally start to see their web operations becoming profitable, the outlook states. As for the threat from freesheet papers, the report is very blunt about that: "Few people have shifted from a paid edition to a free paper."

'Neutron Jack' eyes up 'Boston Globe'

The Boston Globe, one of the oldest papers in the US, looks set to leave the New York Times stable and among the buyers queuing up is Jack Welch, known as "Neutron Jack", former chief executive of General Electric.

The Globe has suffered from a squeeze on its classified advertising and a circulation drop because of competition from online alternatives.

The paper has been valued at between $550 million and $600 million. Welch is believed to be working with local businessman Jack Connors and JP Morgan Chase on a bid. Ironically, the Boston Globe itself reported on the interest from the Welch group this week.

The New York Times has consistently denied it is selling the paper, but reports would seem to suggest otherwise. The Boston Globe, while suffering in circulation terms, has maintained strong journalistic standards - winning a Pulitzer prize in 2003 for its coverage of child abuse in the Catholic Church.

Several papers formerly owned by publicly traded companies went into private hands this year, including the Philadelphia Inquirer and the Philadelphia Daily News, which were sold by McClatchy Co after it took over their former owner, Knight Ridder.

Some financial analysts have said that private ownership may be a better way for papers to adapt to the threat to circulation and advertising revenue posed by the internet and other media.

If the sale goes ahead, the New York Times will be sitting on a significant loss - it bought the Globe in 1993 for $1.1 billion. It is now valued at $600 million at best.

AIB and B of I splash out on advertising

Whether its the threat from Bank of Scotland, Danske (owner of NIB) or the Fortis/An Post joint venture, the main two Irish incumbent banks are determined to secure their position by spending large sums on advertising.

New figures on spending on outdoor advertising show that AIB has upped its spending by more than 200 per cent in the first three quarters of this year compared to 2005, while Bank of Ireland has increased its spending by several hundred per cent in the same period.

The figures - from Poster Management Limited - show AIB spending €2.2 million in the first three quarters, with Bank of Ireland spending €1.3 million.

While this was a substantial increase, the biggest spender Vodafone was way out ahead, spending €2.8 million in just three quarters, ahead of its two main rivals, O2 and Meteor.

Emmet Oliver can be reached at eoliver@irish-times.ie