Consumers and Tech Drive Innovation in Entertainment and Media Industry
According to PwC’s Global Entertainment & Media Outlook 2019–2023, consumers are embracing the expanding opportunities to enjoy media experiences tailored to their needs, and companies are designing offerings and business models to revolve around those personal preferences. In a fundamental shift, they’re leveraging data and usage patterns to pitch their products not at audiences of billions, but at billions of individuals.
The result is an emerging world of media that’s more personal than ever before: one in which empowered consumers control their own media consumption via an expanding range of smart devices, curate their personal selection of channels via over-the-top (OTT) services and bring more media content into their lives by embracing the smart home and connected car. It’s also an increasingly mobile world, soon to be augmented by 5G networks. As personal connections proliferate, however, consumers continue to be concerned about the safety and privacy of the data.
These profound shifts are taking place against a background of ongoing global growth in entertainment & media (E&M) revenues. The Outlook projects that total global spending on E&M will rise at a CAGR of 4.3% over the next five years, to 2023. This growth rate will see the industry’s global revenue reach US$2.6tn in 2023, up from US$2.1tn in 2018. Over the forecast period, six segments will exhibit growth above the average, and seven below it.
Looking at specific E&M segments, VR maintains its position as the highest-growth segment, but after a year in which consumers’ take-up continued to lag behind expectations its lead over the OTT video segment is greatly diminished. Podcasts and esports, which sit within larger segments, have extremely strong growth revenue forecasts at CAGRs of 28.5% and 18.3%, respectively.
At the lower end of the growth spectrum, the traditional TV and home video segment now has negative growth expectations for the first time, as cord-cutting by consumers continues to rise and sales of DVDs keep plummeting. The print-exposed newspapers and consumer magazines segment has the worst forecast through to 2023, with revenues projected to suffer a compound annual decline of 2.3%.
The underlying shift that’s reshaping and reorienting the entire industry is changing human behaviour, with a decisive turn towards personalisation. At one level, the new world of E&M appears more isolated, with growing numbers of people engrossed in their own choice of content. But there’s also a dimension of personalisation that’s inherently social, as people share playlists on music-streaming services, recommend movies to friends on social platforms or engage in multi-user video game battle royales.
Advances in technology and service offerings are finally enabling people to move from passive to active consumption, not just of individual pieces of media, but of media as a whole. Many signs of this change are pinpointed in the Outlook. One is the trend for consumers to reject the bundles of channels offered by cable or satellite providers, and instead construct their own ad hoc bundles made up of OTT services. Another sign is the rise of the smart home, with ownership of smart speaker devices set to rise at a 38.1% CAGR to hit 440mn devices globally in 2023.