BEIJING - China is expected to overtake Germany this year to become the world's third-largest entertainment and media market with spending hitting $96 billion, according to a report published by PricewaterhouseCoopers (PwC) on Tuesday.

The country's overall spend on entertainment and media grew by 13.9 percent to $85.5 billion in 2010. The sector will continue strong growth over the next five years, said the report.

With a projected 11.6 percent compound annual increase, spending is likely to reach $148 billion by 2015, it said.

Wu Binghui, a Beijing-based partner at PwC, said that China's overall entertainment and media market is experiencing a shift to digital platforms facilitated by an explosion in broadband households and mobile access.

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"We forecast that 26.3 percent of total entertainment and media spending in China will be digital in nature by 2015," he said.

Digitization will continue to open up many more major opportunities for new types of services, business models, and consumer relationships for organizations across the whole sector, said the PwC report.

This is leading towards a new operating model specifically designed for the digital ecosystem - the Collaborative Digital Enterprise - a business that is technology driven and dynamic, interconnected and continuously engaged with its customer, employee and supplier ecosystem, said Tang Hui, leader of the Entertainment and Media Group at PwC China.

"Those who have digital collaboration infused into their company's DNA will be the front runners of the entertainment and media industry in 2015 and beyond," she said.

Tang said convincing people to pay for entertainment and media content would be difficult and require a deep understanding of what consumers value.

"Convenience, experience, quality, participation and privilege are the key ingredients that matter to consumers when choosing from the menu of content and delivery channels available," she said.

"To be honest, I expect content to be free. But I think I would be happy to pay for privileges that enable me to jump the queue to get earlier access to content," said Qin Wei, a 26-year-old white-collar worker at a high-technology company in Beijing.

According to the report, PwC forecasts that aggregate entertainment and media global spending will grow at a 5.7 percent compound annual rate, from $1.4 trillion in 2010 to $1.9 trillion in 2015.

As one of the most important spending streams, advertising is projected to reach $578 billion in 2015 from $442 billion last year, said the report.