Big Paydays Ahead for OTT And Entire Digital Video Biz

Pricewaterhouse Cooper’s annual Global Entertainment and Media Outlook, is blindingly packed with numbers about the growth of digital but let’s start with just this one:  

PwC, in this report that aims to take a look at the world five years from now, predicts that over-the-top TV streaming will be a $10.1 billion segment in 2018, up from just $3.3 billion last year. 

And in fact, the report, says home video, mainly driven by subscription video-on-demand purveyors like Netflix, HuluPlus and Amazon Prime and others, will take in $17.03 billion by 2018, from $7.34 billion in 2013. That’s a good indication of why bigger and bigger players are entering the online space.   

By 2017, the home video biz will finally overtake box office receipts, and at 43% of the total, will become the main contributor to filmed entertainment.

Going to the cinema won’t be a quaint relic from the past, like, say, actually talking to a person on the phone, but movies won’t stay at the Cinema Gigantic long. The windows will beckon sooner and more lucratively.  It's been leaning that way for years, of course. 

Altogether, things look very good for video advertising. Oh, it was just a $2.78 billion business in 2013, but by 2018, PwC says that will be up to $6.77 billion, a compounded annual growth rate of 19.5%. (So, if you’re thinking of buying that little palace, by all means have the mortgage officers check this report out. It’s all on the up and up,up,up. You’re rich, or will be in five years.)

But here’s an interesting quirk. With all that growth, PwC says, digital content will only account for 16% of consumer spending by 2018 (not counting Internet access, for which DirectTime Comcox will probably be charging $400 or so a month, I imagine). But seriously! By contrast, total advertising spend in the digital space will be 40% of the total.

What’s up with that? PwC says, marketer have to be there, offering more places and ways for consumers to shop, and importantly, to browse. Marketers have work to do covering that turf.

Here’s an astounding calculation from the Dismal Science boys and girls: Globally, spending on digital entertainment and media will account for almost two out of every three dollars spent in that space by 2018.

Forty percent of total advertising growth in the U.S. will come from digital. Domestically, digital spending will account for 45% of the total growth in the entertainment and media categories by 2018, up from 33% now. (Of the remainder, I assume a big part of that will come for the sizeable gift you and your partners will give to public radio and television, as you give back to society and generally become a solid citizen.)  

pj@mediapost.com

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