1. Quoted in Ruth Finnegan (1975, p. 75).
2. Michael Parenti, ‘Inventing Reality: The Politics of the Mass Media’, 1986, 35, cited Pilger (1998, p. 4).
3. The Better Regulation Commission (2006).
4. Quoted in William Atkins (2002, p. 119).
5. See http://www.freedomhouse.org/research/pressurvey/pfs 2005.pdf.
6. See Lloyds of London, ‘Market removes Malacca Straight from the List’, 11 August, 2006, http://www.lloyds.com/News_Centre/Features_from_Lloyds/Market_removes_
Malacca_Straits_from_the_List.htm.
entertainment industry: the move to centre stage
However one perceives its effects, there is no ignoring the mass communi- cations media in the modern world. Worldwide, technological innovations have given a huge boost to the media and entertainment industry. In 2006, analysts suggested that the global entertainment and media industry had entered a solid growth phase and was set to increase at a 6.6 per cent com- pound annual growth rate (CAGR) to $1.8 trillion in 2010, with new revenue streams growing rapidly, the growth of physical formats slowing, while the availability of licensed digital distribution looks likely to provide consumers with alternatives to piracy (PriceWaterhouseCoopers 2006).
Digital technologies, chiefly broadband Internet and mobile, are becom- ing established as increasingly lucrative distribution channels, changing the way consumers acquire entertainment and media content. Global spending via online and wireless channels reached $19 billion in 2005, and was pre- dicted to increase to $67 billion by 2010.
Across the board, the entertainment and media industry has been shift- ing from the physical distribution to the digital distribution of content. As this shift continued, it created both more growth and more revenue oppor- tunities. Asia Pacific was set to remain the fastest-growing region for the industry, reflecting both the underlying economic growth and local devel- opments and initiatives. The growth was led by double-digit increases in Internet, TV distribution, casino and other regulated gaming and video games. As part of these developments, the People’s Republic of China was predicted to pass Japan by 2009, and to become the largest market in Asia Pacific. India has been the fastest growing mobile phone market in the world. In May, 2007, 6.5 million new subscribers brought the country’s total to 218 million (Yee 2007, p. 12).
In addition, global advertising was predicted to increase at a 6.2 per cent compound annual growth rate (CAGR), during the forecast period, to $521 billion in 2010 from $385 billion in 2005. The Internet was set to remain the fastest-growing advertising medium, at an 18.1 per cent CAGR to $52 billion in 2010. The Internet would constitute nearly 10 per
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cent of global advertising in 2010, compared with less than 3 per cent in 2002.
Moreover, the continued expansion in household broadband use was set to be a major growth driver, whilst wireless subscriber growth and rollout of next generation handsets and high-speed wireless networks would stim- ulate mobile markets. In 2005, the broadband universe totalled 187 million households, up from only 30 million in 2001. By 2010, PriceWaterhouse Coopers (PWC) predicted there would be an additional 246 million broad- band households, bringing the total to 433 million globally. The number of people with a wireless telephone subscription was also growing rapidly, with a total of 1.8 billion globally in 2005. That figure will rise to 2.8 billion by 2010, adding one billion potential customers to mobile content during the next five years.
The growing Internet, computer and phone use had also driven a growth in the amount of information people generate and use. Researchers at the University of California, Berkeley, estimated that, in the early part of the new century, 800Mb of information was being produced, annually, for every person on the planet. Their study found that, in 2002, about five exabytes of new information was generated by the world’s print, film, magnetic and optical storage systems equivalent to 500 000 Libraries of Congress.
But even this figure was dwarfed by the gargantuan amount of informa- tion flowing through electronic channels such as the telephone, radio, tele- vision and Internet. The study estimated that in 2002, 18 exabytes of new information flowed through these channels. The vast majority of this (98 per cent), was in the form of person-to-person phone calls. Ironically, it also found that most of the information transmitted via radio and TV was not new programming, rather the vast majority were repeats. Of the 320 million hours of radio shows only 70 million hours are actually original shows. On TV, only 31 million hours of the total 123 million hours of broadcast pro- grammes counted as new information (Lyman and Varian 2003).
Of course, no growth follows a straight-line trajectory. The adverse eco- nomic environment following in the wake of the ‘tech bubble collapse’, the resulting slowdown in the US economy and the attacks on New York and Washington in September 2001, contributed to the industry’s worst adver- tising slump in 30 years. US television groups lost more than US$300m in combined advertising revenue during the week of the attacks on New York and Washington (Grimes 2001a, 2001b). The world’s largest media company, AOL Time Warner, said only the strong box office performance of one of its films helped to blunt the impact of a 13 per cent decrease in adver- tising revenue, as the company reported a massive net loss of US$54.2bn for the first quarter 2002 (Grimes 2002).
But the industry is seen as resilient as the PWC research showed. Indeed, despite its revenue concerns, AOL received support in the financial markets.
The conglomerate dominated issuance in the primary US corporate bond markets in April 2002, increasing the amount of paper it sold from US$4bn to US$6bn in response to demand, a reflection of the faith investors still had for the entertainment economy.