China set to overtake Japan in ad market

China will overtake Japan to become the world's second-largest advertising market within five years, according to a new report released yesterday.
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.