As entertainment and media companies seek to tap into pockets of growth and value in an increasingly complex and competitive global marketplace, surging demand from young consumers is opening up fresh areas of opportunity for incumbents and new entrants alike.
Total worldwide entertainment and media revenues will rise at a compound annual growth rate (CAGR) of 4.4% in nominal terms over the coming five years, from US$1.72 trillion in 2015 to US$2.14 trillion in 2020, according to PwC’s Global entertainment and media outlook 2016–2020.
As these high-level trends play out, our research has pinpointed key shifts occurring in each of five dimensions of the entertainment and media landscape: demography, competition, consumption, geography, and business models. Simultaneous and interrelated, these five shifts influence and play off one another. They should serve as a serious call to action for both industry incumbents and new entrants to seek out growth opportunities in markets worldwide.
Our analysis of national entertainment and media markets globally reveals an almost perfect correlation between the relative size of the under-35 population and growth in entertainment and media spending—confirming that younger consumers are now the primary drivers of global growth.
In a world where Netflix can launch in 130 new countries in a single day, it’s easy to assume that content is becoming more globally homogeneous. But the reality is that content is being redefined by forces of globalisation and localisation simultaneously—and that while much of the industry is growing more global, content tastes and cultures remain steadfastly local.
The ability for consumers to design and curate their own media diet has been one of the most powerful trends to emerge in the industry. But the bundle is far from dead, with video and cable incumbents—which were initially slow off the mark—now fighting back by offering their content on an integrated omnichannel basis, on TV, laptop, tablet, and smartphone.
Generally, entertainment and media companies had one set of expectations about developed markets and another about developing markets. But the dynamics are shifting rapidly as disruption pushes markets to develop in different ways, meaning “opportunity” economies—even within the same region—can display significantly varied growth patterns. So, beyond zeroing in on the fastest-growing markets, such as Indonesia, India and Peru, entertainment and media companies must continue to focus on those that are generating the greatest absolute dollar growth—such as the US and China.
Today’s entertainment and media market includes technology companies racing to become hybrid content companies, and traditional publishers evolving the other way to emerge as hybrid technology companies. For incumbent advertising agencies, this opens up an opportunity to reorient themselves to become invaluable to markets, by bringing together programmatic capabilities, analytics, data aggregation, and native content to create the new “super” agency.
Global entertainment and media outlook
Entertainment and Media Industry Leader
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