The U.S. media and entertainment industry grew 3.1 percent last year, the second straight increase, led by spending on Web access and online advertising, according to PricewaterhouseCoopers LLP.
The gain was smaller than the 3.5 percent that New York-based PwC forecast a year ago in its annual industry overview. This year, U.S. media revenue will climb 5.6 percent to $489.9 billion on advertising for U.S. elections and the Summer Olympics in London, the company said today in a statement.
Double-digit percentage gains in Internet spending will propel the industry as movies, television, radio, publishing and newspapers embrace digital distribution models, PwC said. Still, the shift to digital businesses will hold back overall growth, which will continue to lag nominal gross domestic product during the next five years, the company said.
“In the near term, economic prospects are mixed but should improve and lead to growth in the sector,” Marcel Fenez, global leader of PwC’s entertainment and media practice, said in the report.
Advertising worldwide climbed 3.6 percent to $485.7 billion last year, led by a 19 percent increase in Web marketing. PwC expects Internet advertising in 2012 to gain 17 percent to $105.4 billion, with newspapers, magazines and book publishing forecast to grow at the slowest pace.
Web access, driven by wider availability of broadband and mobile Internet, climbed 15 percent to $317 billion worldwide in 2011, compared with a 10 percent gain in 2010, PwC said.
In the U.S., Internet access spending will rise 13 percent in 2012 to $59.1 billion, according to the report.