PricewaterhouseCoopers forecasts a 2.7% compound annual growth in global entertainment and media spending from $1.4 trillion to $1.6 trillion in 2013
The newly released Global Entertainment and Media Outlook: 2009-2013 indicates that the digital transition will create a more fragmented entertainment and media environment with a variety of revenue models in the next five years. According to the PwC report, the key to being profitable is delivering a content experience that cannot be readily duplicated elsewhere, whether the revenue model is ad-supported, subscription or a combination.
Bill Cobourn, US leader of the entertainment, media & communications practice at PwC said: “The current economic slowdown, shifting consumer behavior and new ad-supported revenue models are triggering acceleration of digital migration. While the impact of these new models and dynamics throughout the entertainment and media industry will be strong, it also opens up new creative opportunities for the industry.
“The current decline in revenues is not because of declining demand. In fact, demand for E&M appears to be increasing. The challenge is to identify ad models that are able to withstand the downward pressure on ad rates in the digital environment and on subscription models that capture the consumers’ preferences for premium content."
The recession has caused a complete rethink of old models. The report states that the economic times is accelerating the digital migration, pushing companies towards more efficient distribution and ad models, with consumes expecting more value from their acquisitions.
Digital spending will remain the industry’s main growth engine, rising in the U.S. from 17 percent of total industry revenues in 2008 to 25 percent in 2013.
Digital and mobile platforms are expected to account for 78 percent of total consumer/end-user/access growth by 2013, expanding at a 12.2 percent CAGR from $218 billion in 2008 to reach $387 billion.