Over the next five years, digital technologies will become increasingly widespread across all segments of entertainment & media (E&M) as the digital migration continues to expand according to the PricewaterhouseCoopers Global Entertainment & Media Outlook 2009-2013.
The study shows that this recession will last longer than previous ones due to a steeper downturn and that the impact on consumer spending will be much steeper than in the past. E&M is not immune to that trend – consumer spending in E&M will fall by a projected 1.2% in 2009, remaining weak in 2010 and seeing only relatively low growth at 3.2% in 2011.
Responses to the recession will vary from country to country and region to region with some territories showing little ill effects while others experience steep declines. Latin America and Asia Pacific remain the fastest growing regions increasing at an annual compound rate of 5.1% and 4.5% through to 2013 reaching $73 billion and $413 billion respectively. Excluding Japan, the dominant country in the Asia Pacific region which accounted for 45% of total spending in 2008, E&M spending in Asia Pacific will increase at a projected 7.1% compound annual rate over the period of the Forecast.
According to PwC’s analysis, this ongoing migration to digital will occur and manifest itself across three parallel and interrelated dimensions:
The overall, effect of the current global economic downturn will be to accelerate and intensify the migration to digital technologies among both providers and consumers of E&M content and services.
The accelerating digital transformation will in turn reinforce and proliferate new consumption habits and “digital behaviours”, as consumers seek (1) more control over where, when, and how they consume content, and (2) higher value from their entertainment and media choices.
As digital behaviours become more widespread and embedded, a new generation of advertising-funded revenue models will emerge, aiming to reflect and capitalize on the evolving consumption habits by delivering advertising that is ever more targeted and relevant to the specific audience.
By 2013, the combination of these three change dimensions will give rise to a much more fragmented E&M landscape than today’s, characterized by a wide divergence of revenue models aimed at exploiting the digital opportunity. Traditional, long-established revenue models in segments such as TV and magazines will be replaced by more targeted and tailored models that will differ widely within and across segments and geographies.
E&M companies will have to commit themselves to participating actively in this industry-wide shift, or risk suffering lower growth than their competitors and ultimately possible extinction. As we said at the beginning of this article, they will have no place to hide from the remorseless digital advance.
More information about PwC’s study: www.pwc.com/outlook