Trending now in entertainment & media: convergence, connections and trust
All of this is happening against a backdrop of continued global growth in industry revenue. The Outlook – which provides revenue data and forecasts for 15 industry segments across 53 territories – projects that total global spending on entertainment and media will rise at a compound annual growth rate (CAGR) of 4.4% over the next five years. This boost will see the industry’s global revenue reach US$2.4 trillion in 2022, up from US$1.9 trillion in 2017.
Within this overall increase, the fastest revenue growth will be in digitally driven segments. Virtual reality will lead the way, albeit from a low base, at a five-year CAGR of 40.4%. OTT video follows at 10.1%. By contrast, newspapers and magazines will see revenues decline over the next five years. Books, radio and traditional TV and home video will each grow at a CAGR of less than 2%.
Similar contrasts are evident in countries’ overall entertainment and media spending. The fastest-rising markets through 2022 will be Nigeria and Egypt, with total entertainment and media revenue growing at CAGRs of 21.1% and 17.2%, respectively, driven largely by surging spending on Internet access. But strip out Internet access, and India becomes the fastest-growing country, with a 10.4% CAGR, followed by Indonesia at 8.4%. On the same measure, no market in Western Europe or North America will exceed 3% CAGR growth to 2022. And China will all but match the US in terms of absolute growth, placing the two on an equal footing in terms of global importance, even though the US remains a larger market in absolute terms.
So, what are the forces behind the latest wave of convergence reshaping the industry? The Outlook pinpoints five key drivers:
- Ubiquitous connectivity: The number of high-speed mobile Internet connections will increase by 2.2 billion globally by 2022, vastly expanding the market for mobile content consumption at faster speeds. A symbolic tipping point will occur in 2020, when total global data consumption via smartphones overtakes fixed-broadband data consumption.
- The mobile consumer: The worldwide explosion in mobile access is seeing the connected mobile device become consumers’ primary means of accessing content and services across virtually all markets. This makes mobile an increasingly important focus for advertisers. And again, a key tipping point underlines this shift: 2018 will be the first year in which global mobile Internet advertising revenue will exceed its wired equivalent.
- Need for new sources of revenue growth: E&M companies are looking to expand beyond traditional revenue sources, which in some cases are declining. At the same time, telecom companies are targeting entertainment and media content to revitalize their growth. As a result, every player in the ecosystem is racing to develop new revenue streams. Consider that OTT spending will grow at a CAGR of 10.1% through 2022, compared with just 2.3% for broadcast TV advertising.
- Value shift to platforms: Social media and technology platforms are outpacing traditional content creators in capturing consumers’ attention and a rising share of their spending, trends that have fuelled the rise of supercompetitors. Now some traditional content companies are fighting back by developing their own platform-like businesses.
- Personalisation: Today’s empowered consumers reject one-size-fits-all content experiences. As a result, it’s vital for companies, ranging from supercompetitors to fan-focused niche players, to use data analytics and AI to personalise their offerings. And the appeal of the live experience endures. For example, ticket sales for e-sports events will rise at a CAGR of 21.1% through 2022.
Across all the drivers and trends examined in the Outlook, one overarching imperative emerges: the absolute need to earn and sustain the trust of consumers and ecosystem partners. We’re in an era in which trust in many industries is at a historically low ebb and regulators are targeting media businesses’ use of data. As a result, a company’s ability to maintain trust is becoming a vital differentiator. This can be especially challenging for entertainment and media companies, because they must demonstrate their trustworthiness across many dimensions, including content, data, monetisation, social impact and the appropriateness of advertising content. When building trust, content and brand form the foundation, starting with delivering on the promise of quality.
To request press access to the online Global Entertainment & Media Outlook 2018-2022 content, contact Nicholas Braude at firstname.lastname@example.org. This access will allow you to illustrate this and other media stories both by extracting detail from the Global Entertainment & Media Outlook dataset and analysis at a segment and territory level, and by creating charts on-screen that can be exported for use with your stories.
PwC’s 19th annual edition of the Global Entertainment & Media Outlook is a comprehensive online source of global analysis for consumer and advertising spending. With like-for-like, five-year historical and five-year forecast data and commentary for 15 defined industry segments in 53 territories, the Outlook makes it easy to compare and contrast consumer and advertising spending across segments and territories. Find out more at www.pwc.com/outlook.
Books; Business-to-business; Cinema; Data consumption; Internet access; Internet advertising; Magazines; Music, radio and podcasts; Newspapers; Out-of-home; OTT video; Traditional TV and home video; TV advertising; Video games and e-sports; Virtual reality
Much of the content in this press release is taken from data in the Global Entertainment & Media Outlook 2018-2022. PwC continually seeks to update the online Global Entertainment & Media Outlook data. Therefore, please note that the data in this press release may not be aligned with the data found online. The online Global Entertainment & Media Outlook 2018-2022 is the most up-to-date source of consumer and advertising spend data.
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Nicholas BraudePwC Global CommunicationsUnited Statesnicholas.email@example.com+1 617 530 5435