Empowered consumers seek out tailored, inspiring content experiences that transcend platforms

The PwC Global Entertainment and Media Outlook 2015-2019 reveals that total worldwide entertainment and media revenues will rise at a compound annual growth rate (CAGR) of 5.1 per cent over the coming five years, from US$1.74trn in 2014 to US$2.23trn in 2019. While the pace of industry growth will vary widely in different markets – with Japan seeing the slowest growth at a CAGR of 0.9 per cent, and Nigeria the fastest at 15.1 per cent – it’s apparent that when consumers around the world become connected their behaviour becomes more similar, subject to two differentiators.

According to an overview by Marcel Fenez, global leader, entertainment and media at PwC, the first is the quality of the available infrastructure for consuming content. The second is consumers’ common desire for content experiences that are relevant to them personally – which is why, even in a globalised world, meeting local preference remains critical.

Below you will find some key cross-segment global highlights.

  1. Mobile monetisation is the next critical challenge. By 2017, more than half of the world’s population will be mobile Internet subscribers. While markets such as Turkey and Indonesia that comprise the global industry’s bedrock remain comprehensively led by print for now, mobile take-up threatens the same digital disruption faced in markets like the UK. Year-on-year growth in Brazil’s total newspaper revenue, for example, was 3.4 per cent in 2014, but this growth will have fallen to 1.8 [per cent in 2019.
  2. TV and video consumption patterns are changing. The public is demanding high-quality original programming, available in a flexible, on-demand manner across numerous devices to satisfy the growing phenomenon of “binge viewing”, and OTT services offer the best outlet for this type of consumption. The move towards such services helps to explain why North American subscription TV penetration is expected to fall from 79.8% in 2012 to 78.1% in 2016.
  3. Measurement is getting better, but understanding how media is consumed will remain a significant challenge. Advertisers and publishers are now much better equipped to capture, store and process data that allows them to build a fuller picture of how consumers interact with Internet advertising across devices. Metrics are now being adopted by publishers and advertisers that better reflect the quality of impressions rather than their quantity. Yet despite this progress, effective measurement of media consumption, especially across multiple devices and platforms, will remain a significant challenge for the industry.
  4. Connected devices open up new video opportunities and challenges. Smartphone connections are forecast to rise from 1.92bn in 2014 to 3.85bn in 2019. The proliferation of such connected devices among consumers will create both significant new opportunities and considerable challenges for companies creating and distributing filmed entertainment content. 
  5. OTT services are familiarising users in some markets with a video consumption experience free from advertising. Beyond the migration of advertising spend from traditional to digital platforms, there is also more of a shift from ad-supported to subscription-based consumption. Such trends contribute to North America’s forecast CAGR of 2.4 per cent for total broadcast TV advertising revenue, while in markets such as Egypt or Kenya, where OTT has gained less purchase, this phenomenon is not present, so the CAGR is much higher at 14.7 per cent and 14.0 per cent respectively. 
  6. The rise of over-the-top (OTT) video services is slowly changing the shape of advertising. Global total broadcast TV advertising revenue, consisting of multichannel and terrestrial TV advertising revenue, accounted for 97.2 per cent of global total TV advertising revenue in 2014. But as viewing continues to move away from traditional networks towards digital alternatives, so advertisers will consider changing where they allocate their expenditure to reach desired demographic segments. Global total broadcast TV advertising revenue will make up a reduced 94.3% of global total TV advertising revenue by 2019. 
  7. Social/casual gaming revenue will exceed traditional gaming revenue in nine markets by 2019. While markets with long-established traditional console and PC game offerings continue to be dominated by this type of revenue, globally the growth of social/casual gaming revenue will create a US$22.52bn market by 2019. The single biggest shift in total video games revenue will come as countries such as India and South Africa see social/casual gaming revenue overtake traditional gaming revenue by 2019.
  8. Electronic consumer books revenue will see strongest growth in countries with high tablet penetration. Tablets will be key to the growth of global consumer, educational and professional books revenue, with the portability of the device enabling access to a wide range of books at all times. Countries with high tablet penetration such as the US, the UK, Singapore and South Korea will be among the first markets to see e-books’ share of consumer book revenue exceed 40 per cent.
  9. Major cities will be the most lucrative markets for DOOH advertising. With the cost of upgrading to digital formats high, DOOH advertising will be concentrated in large cities, with the most urbanised markets seeing the highest digital penetration. By 2019, the city state of Singapore will see DOOH advertising revenue account for 60.4 per cent of total OOH advertising revenue, while exceptional growth in London will help the UK reach 53.7 per cent.
  10. The notion of the public licence fee is under unprecedented pressure. Public TV licence fee revenue is forecast to grow at just a 0.7 per cent CAGR to 2019, well below the 3.5 per cent CAGR growth of TV subscription revenue. Several factors, including government austerity measures and the growth of OTT video, are challenging the very premise of mandatory fees for traditional broadcasting.

Source: PwC Entertainment and Media Outlook

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