A World of Differences: Five Shifts Set to Shape the Entertainment and Media Future
(Thomson Reuters ONE) -
As entertainment and media companies seek to tap into pockets of growth and
value in an increasingly complex and competitive global marketplace, surging
demand from young consumers is opening up fresh areas of opportunity for
incumbents and new entrants alike
LONDON, June 07, 2016 (GLOBE NEWSWIRE) -- Total worldwide entertainment and
media revenues will rise at a compound annual growth rate (CAGR) of 4.4% in
nominal terms over the coming five years, from US$1.72 trillion in 2015 to
US$2.14 trillion in 2020, according to PwC's Global entertainment and media
outlook 2016-2020.
This growth rate represents a slowdown from last year's 5.5% growth in industry
revenues, and will lag behind overall global economic growth during the five
years. But a closer examination brings a different picture into focus.
Entertainment and media is a dynamic, diverse industry with steady and
sustainable growth. And while its strong aggregate growth is not shared equally
by all participants, impressive growth and opportunities can be found in many
areas of the industry. Drastic slowdowns in some areas and stagnation in others
coexist with spectacular expansion in "hot" countries, regions, and sectors,
creating a multi-shifting global media landscape.
In fact, in 36 out of the 54 countries covered by PwC's Outlook, entertainment
and media spending is growing more rapidly than GDP, often by a factor of more
than 50%. Venezuela tops the list; entertainment and media spending growth there
is likely to outpace GDP growth by more than 14 percentage points in 2016. Many
of the most populous entertainment and media markets-including Brazil, Pakistan,
and Nigeria-will also produce comparatively higher entertainment and media
growth rates.
Click here for key insights, data and tipping points for each industry segment
covered in PwC's Outlook.
Spending patterns are changing at multiple levels
The differences in growth rates at a country level are overlaid by wide
variations between segments. The fastest-growing segment globally over the five
years will be Internet advertising with a CAGR of 11.1%, ahead of Internet
access at a 6.8% CAGR.
By contrast, magazine and newspaper publishing will suffer declines. However,
even here there will be wide variations between territories: while newspaper
publishing revenue will see a compound annual decline of 3.1% in North America,
in India it'll rise at a CAGR of 2.7%.
Against this diverse and multifaceted background, profound changes in spending
patterns will continue. Revenue across entertainment and media is steadily
shifting from publishing businesses to video and Internet businesses-in
particular those that provide over-the-top (OTT) services and monetise consumer
data. Direct consumer spending models will remain strong, while spending on
Internet access, including mobile data, will rival advertising. This development
creates more fertile ground for new entrants and traditional players alike to
jump directly into new markets and segments, like OTT video and new e-commerce
offerings.
Deborah Bothun, PwC Global Entertainment and Media Leader, comments:
"Entertainment and media companies are facing an ever more complex global
environment-one in which every market has its own unique growth dynamics, shaped
by local factors ranging from demographics to content tastes to infrastructure
to regulation. To see through the apparent chaos and pinpoint value
opportunities, companies need a more intimate understanding than ever before of
the forces at play at a local level. Armed with such insights, both established
and emerging players are well-positioned to capitalise on the industry shifts
and lead the next phase of growth."
Five key shifts emerge amid the continuing disruption
As these high-level trends play out, our research has pinpointed key shifts
occurring in each of five dimensions of the entertainment and media landscape:
demography, competition, consumption, geography, and business models.
Simultaneous and interrelated, these five shifts influence and play off one
another. They should serve as a serious call to action for both industry
incumbents and new entrants to seek out growth opportunities in markets
worldwide.
Shift 1. Demography: Youth will be served
Our analysis of national entertainment and media markets globally reveals an
almost perfect correlation between the relative size of the under-35 population
and growth in entertainment and media spending-confirming that younger consumers
are now the primary drivers of global growth. Our analysis of total
entertainment and media revenue growth in the world's 10 youngest and 10 oldest
markets in demographic terms reveals that, on average, entertainment and media
spending in the 10 youngest markets is growing three times as rapidly as in the
10 oldest markets. This principle applies irrespective of a country's wealth-so
age may be a bigger influence on growth.
Shift 2. Competition: Content is still king
In a world where Netflix can launch in 130 new countries in a single day, it's
easy to assume that content is becoming more globally homogeneous. But the
reality is that content is being redefined by forces of globalisation and
localisation simultaneously-and that while much of the industry is growing more
global, content tastes and cultures remain steadfastly local. The international
opening weekend of Batman v Superman: Dawn of Justice in March 2016 grossed
US$254 million in 66 markets outside the US, the fifth most successful
international opening in history.(1) But the year's biggest opening in China
thus far, the Hong Kong-produced fantasy comedy, The Mermaid, grossed US$122
million on its opening weekend in February 2016.(2)
Shift 3. Consumption: The joy of bundles
The ability for consumers to design and curate their own media diet has been one
of the most powerful trends to emerge in the industry. But the bundle is far
from dead, with video and cable incumbents-which were initially slow off the
mark-now fighting back by offering their content on an integrated omnichannel
basis, on TV, laptop, tablet, and smartphone. As take-up of these new-style
bundles grows, we believe the bulk of digital OTT mass-market services will
gradually be reabsorbed into aggregated offerings that will echo the traditional
analogue-style bundle, but that will be more flexibly priced and available on a
full range of devices. When this happens, the competitive battle may move up a
notch, as cable, technology, and telecom players fight over gaining access to
distribution.
Shift 4. Geography: Growth Markets
Generally, entertainment and media companies had one set of expectations about
developed markets (slow growth, low regulation, easier to access) and another
about developing markets (rapid growth, high regulation, harder to access). But
the dynamics are shifting rapidly as disruption pushes markets to develop in
different ways, meaning "opportunity" economies-even within the same region-can
display significantly varied growth patterns. So, beyond zeroing in on the
fastest-growing markets, such as Indonesia, India and Peru, entertainment and
media companies must continue to focus on those that are generating the greatest
absolute dollar growth-such as the US and China.
Shift 5. Business models: Transforming with trust
Today's entertainment and media market includes technology companies racing to
become hybrid content companies, and traditional publishers evolving the other
way to emerge as hybrid technology companies. This underlines how the growth of
technology and digitisation is acting as a centripetal force-breaking up
existing relationships; pushing large, generalist entities to give way to
smaller specialists; and allowing smaller, nimble competitors to beat out
incumbents. For incumbent advertising agencies, this opens up an opportunity to
reorient themselves to become invaluable to markets, by bringing together
programmatic capabilities, analytics, data aggregation, and native content to
create the new "super" agency.
A new level of agility and local insight for a new reality
As these five shifts play out, companies will need to combine responsiveness and
local insight to drive value and maximise growth. Deborah Bothun sums up: "Amid
an ever more diverse and multifaceted entertainment and media landscape, the
industry is learning from experience and striving to build agility to target and
seize opportunities as they appear. To do this, companies must capture the
attention of consumers with experiences-whether delivered digitally or non-
digitally-that engage and resonate with them at a local level. For those global
players that succeed in doing it, the opportunities are legion."
Press access to Outlook content online
To request press access to the online Global entertainment and media outlook
2016-2020, contact Nicholas Braude at nicholas.braude(at)us.pwc.com. This will
allow you to illustrate this and other media stories both by extracting detail
from the Outlook dataset and analysis at a segment and country level, and by
creating charts on-screen that can be exported for use with your stories.
Segments covered by the Outlook
TV and video, TV advertising, Internet advertising, Internet access, Radio, Out-
of-home advertising, Video games, Cinema, Newspaper publishing, Magazine
publishing, Business-to-business, Book publishing and Music. Click here for key
insights, data and tipping points for each industry segment covered in PwC's
Outlook.
About the Outlook
PwC's 17th annual edition of the Global entertainment and media outlook
2016-2020, is a comprehensive online source of global analysis for consumer and
advertising spend. With like-for-like, five-year historical and five-year
forecast data and commentary across 13 industry segments in 54 countries, the
Outlook makes it easy to compare and contrast consumer and advertising spend
across segments and countries. Find out more at www.pwc.com/outlook.
About Outlook data
Much of the content in this press release is taken from data in the Global
entertainment and media outlook 2016-2020. PwC continually seeks to update the
online 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
and media outlook 2016-2020 is the most up-to-date source of consumer and
advertising spend data.
About PwC
At PwC, our purpose is to build trust in society and solve important problems.
We're a network of firms in 157 countries with more than 208,000 people who are
committed to delivering quality in assurance, advisory and tax services. Find
out more and tell us what matters to you by visiting us at www.pwc.com.
PwC refers to the PwC network and/or one or more of its member firms, each of
which is a separate legal entity. Please see www.pwc.com/structure for further
details.
© 2016 PwC. All rights reserved
(1) Mendelson, Scott, "'Batman v Superman' Worldwide Box Office: 'Dawn Of
Justice' Tops $400M In Global Debut," Forbes, 27 March, 2016.
(2) Strowbridge, C.S., "International Box Office: Deadpool and Mermaid Crack
$100 Million Milestones," The Numbers, 18 February, 2016.
Contact
Nicholas Braude, PwC
Tel: +1 857-248-1323
e-mail: nicholas.braude(at)us.pwc.com
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Source: PwC via GlobeNewswire
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Datum: 08.06.2016 - 01:01 Uhr
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News-ID 476323
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