What, Me Worry?

Though recent news coming out of the Internet sector–regarding ad sales and the dot-com fallout–has hardly been inspiring, a new report sees brighter skies ahead. In fact, the skies are so bright, you might need to borrow the glare guard off your computer monitor.

You’re free to draw your own conclusions, but according to a new PricewaterhouseCoopers study, the Internet remains a “compelling” distribution medium. In the company’s Global Entertainment and Media Outlook: 2001-2005, it is predicted that the demand for everything from Web books to streaming video movies will only increase as the high speed wonders of broadband modems infiltrate the homes of consumers. And that nasty little problem of users not wanting to pay for their online content? Poof–that will go away, too, replaced by paid subscription models that, for many companies today, seem all but unattainable.

So how do we get to there from here? Well, first, you paint a rosy Web picture of the next few fiscal years–a picture that, according to Mike Kelley, partner in PricewaterhouseCoopers’ Entertainment and Media Practice, New York, has broadband Internet connections growing from approximately four million homes in the U.S. to over 28 million by 2005 and Internet access itself growing from 45 million homes to 70 million plus homes by 2005.

Then, after putting all those modems in all those homes, you also give people the ability to access the Web outside their homes, using mobile services. For advertisers, new kinds of revenue streams are established, using non-traditional means. Companies are eager to link, according to Kelley, “their brand names to really good content–a really strong musical performer, a really well-visited site. I think there’s very niche content that deliver great audiences for certain brands, and they’ll continue to expand.”

Finally, as new technologies develop, subscriptions themselves will take on new forms. Users will be able to access multiple forms of content on demand, including video and music, and will be willing to pay for it on a regular basis.

Kelly may not be too far off. The other day while engaging in a very old-fashioned method of accessing media content–reading the paper over lunch–I saw that AOL TW is revving up to offer The Sopranos on demand to its cable/Internet subscribers–an offer that, given the subject matter, people might not be able to refuse.

Data Points
–In more good news–this time for a slumping U.S. economy–PricewaterhouseCoopers predicts that the entertainment and media marketplace will expand at a 7.1 percent compound annual growth rate (CAGR) through 2005.

–In the What’s-with-that-gloomy-advertising-outlook, put-on-a-happy-face! dept., Kevin Carton, Global Leader of PricewaterhouseCoopers’ Entertainment & Media Practice, said, in a statement, “Double-digit Internet advertising and access spending growth will not only drive the U.S. market with a 14 percent CAGR by 2005, it will also be the fastest growing segment globally over the next five years.”

–Not all the cheery forecasts are limited to North America. In fact, Latin America will enjoy a boom in its entertainment and media market, experiencing the highest increase of any region in the world, with a CAGR of 12.5 percent over five years. And, owing to increased Web penetration, overall Internet advertising in Latin America will see a CAGR surge of 47.2 percent by 2005.