The Irish entertainment and media industries are predicted to grow at a compound annual growth rate of 5.7 per cent between now and 2011, when they could be worth at a combined $4.2 billion (€2.98 billion).

The data is contained in PricewaterhouseCooper's latest Global Entertainment and Media Outlook, which examines the prospects for the industry between 2007 and 2011.

Bartley O'Connor, associate director in PwC's Irish entertainment and media practice, said there was a "very positive economic environment" for media and entertainment in Ireland, but the market was "moderating from the unsustainable highs of previous years".

He said growth rates had reached 8.5 per cent in recent years due to the increase in the number of television and radio stations, the introduction of freesheet newspapers and significant growth in broadband uptake.

The projected growth rate here between now and 2011 is also less than PwC's global forecast for the period of 6.4 per cent. It is, however, slightly stronger than the average growth rate in Europe, the Middle East and Africa, of 5.5 per cent.

The fastest-growing sectors in Ireland will be internet access and advertising (14.9 per cent), video games (10.5 per cent) and television distribution (8 per cent).

Newspaper publishing will continue to be the largest segment of the media and entertainment industry in 2011. The 5.3 per cent annual growth rate that PwC is forecasting means that circulation spending and advertising will break through $1 billion by 2011.

PwC's preliminary figures for 2006 suggest the advertising market grew by 11.1 per cent to $1.2 billion, while consumer spending on all media grew 3.9 per cent to €1.9 billion. In common with other mature markets, advertising growth at 7.7 per cent will outstrip growth in end-user spending of 4.4 per cent between now and 2011.

According to PwC's global entertainment and media industry lead partner, Marcel Fenez, growth will be driven by Brazil, Russia, India and China which will account for 24 per cent of total growth for the next five years.

The US will continue to be the biggest market, worth $754 billion in 2011, but it will be the slowest growing at 5.3 per cent.

Mr Fenez said acquisition activity by private equity firms was unlikely to slow down despite recent market turmoils.