China will overtake Japan to become the world's second-largest advertising market within five years, according to a new report released Tuesday.
The report on the entertainment and media industry by accountancy giant PricewaterhouseCoopers (PwC) predicts a sustained upturn in advertising growth in China whereas Japan, second only to the US, is largely static.
China will also overtake Japan in the gaming market by 2012, it predicts, adding that the video game industry will be four-times bigger than the music sector in Asia-Pacific by 2014.
The exhaustive Global Entertainment and Media Outlook 2010-2014 covers sectors from television, music, film and video games to radio, publishing and advertising in 48 countries.
"Traditionally within the context of Asia, Japan was always the gorilla," Marcel Fenez, PwC's global leader for entertainment and media told AFP.
"But the Japanese advertising market has either been flat, marginally up - or down. While I wouldn't use the word 'inevitable', the writing is on the wall for China to overtake Japan."
And the so called "Great Firewall of China" - a vast system of online censorship - is not holding the country back. The main driver is local content, Fenez says.
"The power behind the growth in China is from within - it is a domestic story. The demand from the consumer is to get high-quality content. The fact that it is a difficult market for foreigners is not stopping growth.
"And the speed of migration to digital in China is ahead of established markets. Consumer adoption is one of the strongest we have seen, particularly among the age 15-29 demographic. Take up is very high and very thorough."
Japan is the dominant Asian country and the second-largest in the world behind the US, but has the region's slowest growth at a projected 2.8 percent.
The mobile Internet explosion, the report says, has already happened in Japan - with 53 percent of global spending on mobile Internet in 2009 while other markets are "still at the bottom of the curve".
All sectors are expanding within Asia-Pacific, the only region where this is happening.
Even the so called "dead tree" industry - newspapers and magazines - are still growing by up to 10 percent in some countries, such as India, Fenez said.
Asia-Pacific spent the most on video games in 2009 - 19.4 billion dollars.
"Asia has always led the way in this sector," Fenez said. "By 2014, the video game sector will be worth 40 billion dollars, the music industry by comparison will be a quarter of that."
Globally, the entertainment and media industry will shrug off last year's decline in revenues caused by the downturn and grow worldwide from 1.3 trillion dollars last year to 1.7 trillion dollars in 2014.
The relatively small Latin America market is growing fastest, predicted at 8.8 per cent annually during the next five years to 77 billion dollars. Asia-Pacific is seen growing at 6.4 per cent to 475 billion.
The largest market, but slowest growing, is North America - at 3.9 per cent, taking it from 460 billion in 2009, to 558 billion in 2014.
And digital technology - from gadgets to the Internet - is leading the way.
"Globally, the big story of this report is the speed of change," Fenez told AFP. "During a recession everyone is looking for a good deal and this has forced people to embrace digital more than previously.
"And the other main issue is fragmentation - it is difficult for advertisers right now, there is arguably no longer any such thing as prime time - there's just my time, and your time."Reuse content