PwC: Romanian media & entertainment market set to recover to pre-crisis level this year

The value of Romania’s media and entertainment market is poised to grow to USD 3.4 billion by 2016, after finally recovering this year, following a three-year slump, on the back of internet and digital spending growth, according to PwC's Global Entertainment and Media Outlook. The nominal overall market is set to return to pre-crisis levels this year, at some USD 2.7 billion, according to PwC estimates. By 2016, the Romanian media market will grow by some 5.3 percent year-on-year, taking into account inflation of 2 percent. Most of the growth will come from the growth of internet access expenditure, with a 9.3 percent nominal compound annual growth rate (CAGR), while advertising expenditure will register a moderate growth, of 4.8 percent CAGR up until 2016. “It is clear that the media and entertainment sector was heavily affected by the global downturn. Yet this has overlapped with a more severe long term crisis of the sector itself, which is undergoing a radical transformation due to the growth in new digital technologies. These are turning media products into a commodity and are forcing media and entertainment companies to experiment with new forms of making revenues from their products and services,” said John Webster, Partner, Assurance Leader, PwC Romania. Romania's media and entertainment industry remains the third most dynamic in Central and Eastern Europe, after Russia and Turkey, even though a slowdown in the growth rhythm is expected. Romania is ahead of Hungary, with a growth rate of 5.1 percent, Poland, with 4.9 percent and Czech Republic, with 4.8 percent. In Romania and elsewhere, digital opportunities are becoming better understood and media companies are trying to implement new digital strategies to meet the demands of the market and keep up with the shift in consumer behavior. “The various segments of the E&M sector are at different stages of digital development, but they are all embracing digital to meet the ever-changing demands of consumers effectively and profitably. Entertainment and media companies have reached what we’re calling the ‘end of the digital beginning’: they’ve made the commitment to a digital future, and are now striving to make the necessary changes to their products, distribution and organizations”, said Florin Deaconescu, Partner, Leader of the Assurance services team for the Telecom, Media and Entertainment Industry, PwC Romania. A key driver for digital spending, the number of mobile internet subscribers is set to more than double to some 2.9 billion by 2016, when global mobile internet advertising revenues are set to reach USD 24.5 billion. Representing 36.5 percent annuallycompounded growth. This will almost match the size of the classified internet advertising market, according to PwC. However, paid search at USD 78.1 billion and banner/display at USD 46.6 billion will still have the lion’s share of the market in 2016. The full PwC report is