The next 10 years should be the greatest time in the history of the entertainment business.

The global middle class is growing astronomically fast. It may not be growing in the U.S., but it is growing in the rest of the world: Research shows that when people leave poverty and have discretionary income, they spend on entertainment. In addition, the broadband Internet is growing just as fast as the new middle-class population, reaching 3 billion users in the next five years.

But the problem is that the revenues of media and entertainment firms are barely growing above the rate of inflation. Production and marketing costs are climbing. There are signposts of trouble ahead; if we’re smart, we won’t put our heads in the sand.

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