Digital media booms in Germany

26 October 2012

BERLIN: Digital channels are continuing to enhance their position in Germany, with the mobile web and internet advertising among the main drivers of this process, a study has argued.

According to PricewaterhouseCoopers, the advisory network, the number of people browsing the web via wireless devices rose by 35% to 29m in 2012, and should hit 60m in 2016.

In contrast, newspaper revenues, now standing at €8.6bn, are set to contract by 0.5% per year in this period. Such a figure stands at 0.3% when talking about magazines, a sector valued at €5.8bn today.

The rise of connected gadgets like smartphones and tablets and the on-going transfer of adspend to digital channels are two core trends related to these developments, the study said.

In further evidence of this, the analysis suggested that online advertising expenditure climbed by 12.3% in 2011, with the fees paid for internet access also surging by 11.2%.

As a result, the internet's share of total media and entertainment revenues reached 23%, and thus overtook television, on 20.8%, for the first time on this metric.

Joining web ads and access among the fastest-growing individual categories were outdoor adspend, up by 5.8%, and video games, which saw a 3.7% improvement.

The country's entertainment and media industry as a whole expanded by 2.6%, and the compound annual growth rate is pegged at 2.8% for 2012 to 2016, when revenues will top €70bn.

Within this, digital products and advertising are set to witness a leap of ten percentage points in their market share, to 37%.

Werner Ballhaus, head of technology, media and telecommunications at PwC, said: "For the entire entertainment and media market, the motto is now: 'Digital is the new normal.' The question is no longer whether to include digital in business models, but rather how to integrate it into processes and organisational structures."

Data sourced from PricewaterhouseCoopers; additional content by Warc staff