PricewaterhouseCoopers has released its annual "Global Entertainment and Media Outlook 2012-2016" report, predicting increased growth in the music industry, as well as the overall media and entertainment business. The company expects global spending in the entertainment and media field will rise from $1.6 trillion in 2011 to $2.1 trillion by 2016, growing at a compound annual growth rate (CAGR) of 5.7 percent. The U.S. E&M market experienced the largest increase since 2007 with faster growth expected, growing at 5.2 percent CAGR reaching $597 billion in 2016, from $464 billion in 2011.

According to PwC's report, the recorded music business "will rebound with steady expansion projected rising at a 5.5 percent CAGR to $19.8 billion in 2016 from $15.2 billion in 2011. Digital distribution of recorded music is expected to overtake physical distribution in 2012 and will rise at an 11.7 percent CAGR to $5.5 billion in 2016 from $3.1 billion in 2011." The report sees a continued, steady decline in physical music sales as digital, aided by streaming services, will continue to grow.

PwC also projects radio's revenue to hit $22.5 billion in 2016, a 4.1 increase over last year. Ad revenue is expected to hit $18.2 billion by 2016, up from $15.7 billion in 2011. Online radio advertising is predicted to reach $802 million in 2016, while satellite radio's advertising is projected to be $116 million in 2016, a 9.4 percent CAGR from '11.

The report also expects growth in digital E&M spending to "continue to significantly outpace growth in non-digital spending during the next five years." Digital spending is expected to account for 67 percent of all growth in spending during the next five years, globally. Digital spending in the U.S. is expected to account for 31.5 percent of all E&M spending in 2016, up from 21.7 percent in 2011.

"Change in consumer behavior is pervasive and accelerating and the E&M industry is in the front line of this change," said Ken Sharkey, entertainment, media & communications U.S. practice leader for PwC. "The past uncertainty triggered by the digital migration has given way to a sharper focus of E&M companies on executing their digital strategies. While experimentation will continue, the way forward is becoming clearer as companies focus on identifying, choosing and executing the right business models, organizational structures and developing the skill sets to understand consumer behaviors and motivations in their connected, multi-screen environments."