The global E&M industry is growing

Even amid significant disruption

By Ennèl van Eeden

The entertainment and media industry worldwide will continue to grow at a pace close to its historic rates – even in the midst of the large-scale convergence that is significantly disrupting the industry. Digital segments are spearheading growth, but a closer look reveals a dizzying array of different trends at the segment and country levels. An accumulation of nearinfinite micro stories make up the story of the global industry

Our Global Entertainment & Media Outlook 2018–2022 predicts total spending in the global entertainment and media industry to grow by 4.4% per year over the next five years. This is in line with historic growth. Considering that this industry has seen endless disruption for the better part of the past 15 years, the fact that the industry is able to grow demonstrates its ability to transform itself amidst the ongoing convergence. The historic boundaries between Technology, Telecommunications and Entertainment & Media are dissolving, and equally so are the silos within E&M. The battle for sports broadcast rights illustrates this trend. TV networks now compete with companies that offer video streaming, and telco’s and social media platforms are also competing for these rights. On Thursdays, for example, Amazon streams NFL American football games; 25 Major League baseball games are broadcast exclusively on Facebook; and the Melbourne Cup (Australia’s most prestigious horse race) was live on Twitter this year.

Digitally-driven services will increase the most

In 2018 the global industry will experience a historic tipping point: digital revenue will exceed non-digital for the first time. The greatest relative growth will be in virtual reality (up 40%) and OTT videos (up 10%) over the next five years. Underpinning this is the massive uptake in internet connections – and in particular mobile internet connections worldwide. Through 2022 the world will see 2.2 billion new mobile internet connections – half of these coming from only four markets: US, China, South Korea and Japan. The US continues to be the world’s biggest consumer of data and by 2022, 86% of all data consumption in the US will be video streaming.

Stark differences between segments …

At the other end of the spectrum are newspapers and magazines, whose revenues will continue to decline over the next five years. Newspaper publishing will show the steepest decline in years, but there are still markets where this segment is growing – at 4.4% per year in India for example.

Print segments in general are suffering, but spending on consumer books will grow at a modest 1.5% per year. This is driven by growth of the middle-class and increased literacy in developing markets. Movies and TV shows are turning books into bestsellers, not the other way around as in the past – think about Stephen King’s It and Margaret Atwood’s The Handmaid’s Tale.

The world has seen significant disruption by streaming services and the quality of TV shows in particular. At the end of the last season of Outlander I sat on my sofa, crying my eyes out … and that makes one pause to think about this. The level of emersion in binging hours and hours into an epic drama series is a challenge in itself to the very core of the movie production industry.

… and regions

Revenue development varies greatly between the various regions and media. India, Indonesia, Russia and China are the fastest growing markets, while no market in Western Europe or North America will exceed 3% annual growth over the next five years. The distribution of markets is indicative of the increasing difficulty of finding lucrative investment opportunities in the global media market. Conditions in countries as China, India, Russia and Indonesia create unique challenges to investors. This will continue to drive large-scale consolidation in Western markets as companies look for growth and profit maximisation opportunities

Contact us

Ennèl van Eeden

Entertainment & Media Industry Leader Global, PwC Netherlands

Tel: +31 (0)88 792 45 40

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