According to PwC’s Global entertainment and media outlook 2014-2018, total entertainment and media spending on digital services is forecast to grow at a 12.2% compound annual growth rate between 2013 and 2018 and account for 65% of global entertainment and media spending growth, excluding spending on Internet access. In 2018, 33% of total advertising revenue is forecast to be digital, compared to 17% of consumer revenue, applying a digital mindset advancing from a digital strategy to a business strategy, fit for a digital age.
Marcel Fenez, PwC’s Global leader, entertainment & media, says: “… digital mindset: getting ever closer to the customer across the entire organization, and in everything it does… adopt more flexible business models… exhibit three behaviors: forging trust with consumers; creating the confidence to move with speed and agility; and empowering innovation… an important step in monetizing the digital consumer… ”
Mobile Internet penetration will reach 55% in 2018, which will help drive digital advertising to increase its share of total advertising revenue. With Internet advertising growing at a 10.7% CAGR (compared to a total advertising CAGR of 4.4%), the industry is approaching a significant tipping point: in 2018, Internet advertising will be poised to surpass TV advertising, when it will trail TV advertising by just US$20bn. Mobile Internet advertising is forecast to grow at a CAGR of 21.5%.
U.S. Ad Media Market Size (US Constant 2013$; 2013-1018)
US Ad Dollars; Billions
Source: PricewaterhouseCoopers, June 2014
Spending on digitally delivered content will account for only 17% of total consumer spending in 2018 (excluding Internet access), compared to 33% of total advertising spending, says the report. The growth of ‘24/7 access’ and micro-transactions suggest that the key to monetizing the digital consumer is to adopt business models that offer more choices and better experiences. Electronic home video over-the-top (OTT)/streaming, and digital music streaming, are two of the fastest-growing consumer sub-segments cited in the study, set to rise at annual rates of 28.1% and 13.4% respectively.
Internationally, says the report, nine high-growth markets are powering global entertainment and media revenue. China, Brazil, Russia, India, Mexico, South Africa, Turkey, Argentina and Indonesia collectively are forecast to account for 21.7% of global entertainment and media revenue in 2018. And, China will overtake Japan as the world’s second-largest entertainment and media market, behind only the US.
Marcel Fenez, PwC’s Global leader, entertainment and media, says: “… all these markets have… a growing middle class boosting spending in entertainment and media… domestic organizations are in prime position to realize the opportunity of the emerging middle class… optimal approach for international players will… be to collaborate with local partners.”
Advertising is spearheading migration to digital, says the report:
Concluding, the report provides some digital data dollar forecasts:
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