28 June 2007 — Russia’s entertainment & media industry (E&M) had the highest growth rate in Europe in 2006, according to PricewaterhouseCoopers Global Entertainment and Media Outlook: 2007–2011. The industry grew by 7.1%, with the cumulative annual growth rate in 2007–2011 forecast at 6.9%. PricewaterhouseCoopers valued the Russian E&M market in 2006 at $19.9 bn, to reach $21.1 bn this year.
Internet advertising and access had the highest spending in Russia (and globally), coming to $3.7 bn. This will continue to be the fastest growing segment for the next five years, expanding at 20% a year on average. The television distribution market was second in terms of growth, at 18.3% a year. Book publishing will have the slowest growth rates (3.1%), in line with international trends. The casino and recording segments will slow on average by 22.7% and 7.7% respectively.
E&M segments in Russia
Spending in filmed entertainment (box office and rentals in various formats) grew in 2006 by almost 13% to $703m, of which $412m were cinema box office takings, an 18% rise on 2005. The box office market is expected to more than double in size over the next five years to $941m. The segment as a whole will be worth $1.4 bn.
Television, radio and out-of-home advertising
The Russian television advertising market in 2006 was worth almost $3 bn—28% higher than in 2005. The forecast for 2007 is growth to $3.7 bn. Radio advertising grew at an even faster rate—total sales in 2006 were $350m, a 40% hike on the previous year. Analysts expect growth to slow, but to remain at the relatively high level of around 3.6% a year. Out-of-home advertising saw much lower growth rates. In 2006 this segment was worth $1.1 bn and growth in 2007 is forecast at just 9%, much lower than in previous years. This fall-off is expected to continue, the segment growing by just 2.7% to 2011.
Newspaper purchases in Russia amounted to $1.5 bn, with advertising spending increasing by 19% to reach $345m in 2006. The print advertising market is expected to grow at 6.4% a year on average. Due to changes in advertising legislation, the Russian magazine advertising market will see healthy growth. In 2006 advertisers paid around $700m for space in magazines, and the market is expected to reach $800m in 2007. Magazine purchases in 2006 came to $286m, while the compound annual growth rate over the next five years in this segment is forecast at just 4.4%.
Russia’s book publishing sector had a volume of $1.88 bn in 2006. The cumulative annual growth rate (CAGR) over the next few years will be small, at just 3.1%. Fiction, entertainment and children's books make up half the market, educational books 35% and business literature 15%. These market shares will continue in the future.
Internet advertising and access
PricewaterhouseCoopers estimates show that Russia had 11.5 million dial-up Internet subscribers and 2.5 million broadband users in 2006; the latter group is expected to grow in the next five years by almost 50% a year. The Internet will expand primarily through broadband, with subscribers expected to number 17.5 million by 2011. Dial-up households will drop in number, but not significantly. Consumer spending on internet access in 2006 was $3.6 bn and is expected to grow on average by 18.7% over the next five years. By 2011, Russia will represent two-thirds of total spending on Internet access in Central and Eastern Europe.
Notes to Editor
- For additional information please contact Vera Totskaya, PR Manager, or Olesya Kuzminskaya, PR Assistant Manager.
- About the Outlook
PricewaterhouseCoopers Global Entertainment and Media Outlook: 2007–2011, the eighth annual edition, contains in-depth analyses and forecasts of 14 major industry segments across five regions of the globe — the United States, EMEA (Europe, Middle East, Africa), Asia Pacific, Latin America, and Canada – plus a Global Overview. It is available in hard copy or electronically (PDF) for US$995 on our website. The Global Overview is available separately for US$95 in hard copy or electronically, and individual segment chapters are also available for US$95 in electronic format only.
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