Sector driven by 'middle-class appetite for technology'
China is the largest Internet advertising market in Asia and the second-largest worldwide, according to a report released by PwC on Monday.
The country's Internet advertising revenue was $23.2 billion in 2015 and is expected to reach $44.6 billion by 2020, said the report. The revenue accounted for 29 percent of total global revenue in the sector in 2015, with the share expected to rise to 31.9 percent by 2020, according to the report.
"A strong economic performance and an expansive middle class with an appetite for technology underpin China's potent Internet advertising sector," Dylan Tey, a PwC partner specializing in telecoms, media and technology, said at a press conference on Monday.
Mobile Internet advertising will grow at a faster pace compared with desktop Internet advertising in the coming years, noted the report. Internet advertising consumption on mobile devices will grow to $7.12 billion in 2020 from $2.33 billion in 2015, the report said.
China will displace the US as the largest market in terms of box-office revenue by 2017, with revenue reaching $10.3 billion, said PwC.
In 2015, box-office revenue from domestic films surpassed 27 billion yuan ($4.11 billion), while revenue from imported films reached 17 billion yuan.
"China's cinema sector still has large potential to develop further, particularly in the second- and third-tier cities," noted Tey at the press conference.
Its growth will be supported by the improved quality and relevance of domestically produced films, said Jane Kong, a partner from PwC's China entertainment and media sector division.
China's cinema is also facing the challenges from the development of Internet videos, which can provide customized services for consumers, said Tey.
Chinese entertainment and media revenues are expected to rise at a compound annual growth rate (CAGR) of 9 percent over the next five years, from $173 billion in 2015 to $264 billion in 2020.
Chinese entertainment and media sectors are represented by the Internet advertising, cinema and videogame sectors, which are projected to climb during the 2015-20 period at CAGRs of 13.9 percent, 18.9 percent and 7.4 percent respectively, said the report.
