According to PwC’s Global Entertainment & Media Outlook 2018-2022, which provides revenue data and forecasts for 15 industry segments across 53 territories total global spending on entertainment and media will rise at a compound annual growth rate (CAGR) of 4.4 percent over the next five years. This boost will see the industry’s global revenue reach USD 2.4 trillion in 2022, up from USD 1.9 trillion in 2017.
Amid growth that is broad-based and consistent – but unevenly distributed – three imperatives are affecting every company in the industry: convergence, connecting with consumers and the need to build trust, the report says.
As a wave of change plays out, the borders that once separated the entertainment and media, technology and telecom industries are dissolving, the PwC report argues. “Large Internet access providers and delivery platforms are integrating vertically, and online giants are expanding horizontally into content. Traditional segment distinctions are blurring – between print and digital, video games and sports, wireless and fixed access, cable and online, social and traditional media.”
Continued overall revenue growth for certain segments
All of this is happening against a backdrop of continued global growth in industry revenue. The Outlook forecasts that the industry’s global revenue reach USD 2.4 trillion in 2022, up from USD 1.9 trillion in 2017. Within this overall increase, the fastest revenue growth will be in digitally driven segments. Virtual reality will lead the way, albeit from a low base, at a five-year CAGR of 40.4 percent. OTT video follows at 10.1 percent. By contrast, newspapers and magazines will see revenues decline over the next five years. Books, radio and traditional TV and home video will each grow at a CAGR of less than 2 percent.
Similar contrasts are evident in countries’ overall entertainment and media spending. The fastest-rising markets throutotal entertainment and media revenue growing at CAGRs of 21.1 percent and 17.2 percent, respectively, driven largely by surging spending on Internet access. But strip out Internet access, and India becomes the fastest-growing country, with a 10.4 percent CAGR, followed by Indonesia at 8.4 percent. On the same measure, no market in Western Europe or North America will exceed 3 percent CAGR growth to 2022. And China will all but match the US in terms of absolute growth, placing the two on an equal footing in terms of global importance, even though the US remains a larger market in absolute terms.
Ennel van Eeden, Global Entertainment & Media Leader, PwC Netherlands, comments: “The story behind the Outlook’s global figures is a near-infinite accumulation of micro-stories, and a dizzying array of different trends, at a territory and segment level. For almost every trend, there’s a counter-trend somewhere among the 15 segments and 53 territories. Also, the pace of change isn’t going to let up: technologies such as artificial intelligence (AI) and augmented reality will continue to redefine the battleground. Across all segments, technology is enabling content delivery to become progressively cheaper and more personalised. This heightens the urgency for companies to invest in technologies that will enable them to compete more effectively.”
According to the report, there are five key drivers behind the latest wave of convergence reshaping the industry: ubiquitous connectivity, the mobile consumer, need for new sources of revenue growth, value shift to platforms and personalisation.