Study: Teutonic biz on rise

DVD boom to fuel 3% growth over next four years

BERLIN — Germany’s entertainment industry is set for an upswing, according to a new PricewaterhouseCoopers study looking at Teutonic exhib, home entertainment and TV markets.

The exhib market is recovering slowly following box office drops in 2002 and 2003, and the market share of local films is at a six-year high at 16.1% thanks to the success of “Good Bye, Lenin!”

However, the entertainment industry, fueled by the DVD boom, is expected to grow an average of 3% for the next four years.

Nevertheless, the first half of 2003 saw a 12.5% drop in box office revenue thanks to record hot temperatures, less attractive films, the dire state of the local economy and increased film piracy, according to PwC’s Entertainment and Media Outlook for 2003 to 2007.

While a 9.7% drop in admissions to 148 million is expected by year’s end, PwC predicts admission sales will increase 1.4%-2.6% per year through 2007. A rise in ticket prices of between 1.2%-2.1% a year will add to the steady 3.7% increase in box office revenue through 2007, when total admissions are expected to reach 161 million and revenue $1.15 billion.

The DVD boom shows no signs of slowing down, according to the report. Despite declining box office revenue in 2002, overall film revenue was up 10.6% to $2.8 billion last year thanks to a 22% increase in DVD and VHS sales. DVD sales will account for an average of 6% growth in the film industry through 2007, with the home entertainment segment seeing 9% revenue growth.

The sizzling DVD biz is expected to make up 69% of the entire film industry’s revenue by 2007, an increase of 59% from 2002. As for Germany’s famished TV industry, PwC predicts a 4% increase in the next four years to $18.5 billion, up from $15 billion in 2002.

While advertising revenue is expected to be down again this year, improvement should come next year thanks to an expected economic recovery, the Olympic Games, the European soccer championships and the World Cup in 2006.

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