CHINA'S entertainment and media market is set to grow 12 percent a year over the next five years and reach US$203 billion in 2017, an industry report predicts.

China's overall advertising spending is expected to grow 12.4 percent annually through 2017 to US$55.7 billion, boosted by Internet advertising, PwC said in its annual Global Entertainment and Media Outlook today.

Traditional media will continue to dominate the sector in the next five years, predicted PwC.

Chinese consumer spending on entertainment and media sector is expected to reach US$67.8 billion in 2017, overtaking the UK and Germany to occupy third place globally.

Internet advertising will see an annual compound growth rate of 21.5 percent, the highest among 11 sectors studied by PwC.

In consumer spending, electronic home video will have the biggest increase of 19.7 percent annual compound growth rate.

China's cinema sector will be worth US$6.49 billion in 2017, with US$5.5 billion coming from box office income, says the report

China overtook Japan to become the world's second biggest cinema box office market last year.

PwC said the entertainment and media sectors need to invest in developing and distributing content in ways that keep consumers loyal and leverage their willingness to share content.