PwC Reports on Trends in Entertainment and Media

According to PwC, the ongoing rapid evolution of the entertainment and media industry has entered a dynamic new phase. Amid growth that is broad-based and consistent, but unevenly distributed, three imperatives are affecting every company in the industry: convergence, connecting with consumers and the need to build trust.

As this wave of change plays out, the borders that once separated the entertainment and media, technology and telecom industries are dissolving. Large Internet access providers and delivery platforms are integrating vertically, and online giants are expanding horizontally into content.

Traditional segment distinctions are blurring between print and digital, video games and sports, wireless and fixed access, cable and online, social and traditional media. In the process, business models are being reinvented so all companies can tap into new revenue streams and create relevance at scale.

Some required capabilities include targeting fans and connecting more effectively with consumers to develop a membership mind-set. Amid these changes and ongoing advances in technology, the challenge to build and sustain consumer and public trust is growing more critical and the pace of change will only accelerate.

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%.

Although the video games and e-sports segment will grow at an overall CAGR of 7.2%, the e-sports component will leap by 20.6% compounded annually. Conversely, global recorded music is projected to rise at a robust 6.1% CAGR, but three of its sub-components, physical, downloads and ringtones/ringbacks, will see significant declines. Global box office rose 4.3% in 2017, but fell in France, the US and Australia. Global TV advertising will grow at a CAGR of 2.7% through 2022, but fell, for the first time, in 2017. And although newspaper revenue is declining almost everywhere else, in India it will increase by close to US$1 billion by 2022.

Similar contrasts are evident in countries’ overall entertainment and media spending. The fastest-rising markets through 2022 will be Nigeria and Egypt, 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.