The Entertainment and Media Industry Reconfigures amid Recovery

Digitalisation, one of the major forces shaping all industries, has been intensified by social distancing and mobility restrictions during the COVID-19 pandemic, according to PwC. As a result, the entertainment and media (E&M) world in 2020 has become more remote, more virtual, more streamed, more personal and, for now at least, more centred on the home than anyone anticipated at the start of the year.

The pandemic afflicting the world brought the global E&M industry’s growth to a shuddering halt. Amid a global recession, 2020 will see the sharpest fall in global E&M revenue in the 21-year history of this research, with a decline of 5.6% from 2019, more than US$120bn in absolute terms. In 2009, the last year the global economy shrank, total global E&M spending fell by just 3.0%.

However, while the shockwaves from 2020 will continue to ripple through the global economy, the industry’s fundamental growth trajectory remains strong. In recent years, as media experiences have become ever more central to our lives, global E&M growth has typically outpaced GDP. Just so, after the challenges of 2020, PWC expects E&M to reassume its outperformance. Their projections show that in 2021, E&M spending will grow by 6.4%. Looking across the five-year forecast period, overall revenue growth will be running at a 2.8% CAGR.

As is the case in the economy at large, the current pain in E&M is not evenly shared around the industry. It’s most acute in segments that COVID-19 literally shut down, such as events: live music, cinema and trade shows. Spending on advertising likewise will fall by 13.4%. At the same time, the long-running transition in newspapers from print to digital has been fast-forwarded several years, cutting into papers’ print revenues, for example.

Although 2020 has been a challenging and disruptive year for most industries, including many segments of E&M, it is clear that consumer demand for the varied and expanding array of media choices now on offer continues to grow. The revenue figures reflect the full force of the economic downturns and digital acceleration triggered by COVID-19, but the longer-term outlook for the E&M industry as a whole remains bright. That said, it’s also clear that as normality slowly returns, there will continue to be winners and losers.