PwC’s Global Entertainment & Media Outlook 2018-2022 Reveals Long-Term Trends

Each year PwC releases the Global Entertainment & Media Outlook. Released earlier this month was the 2018-2022 edition. (Here’s the press release from last year.)

The Outlook is definitely a worthy read to get a grip on the high-level and (very) long-term trends shaping the media industry, such as where advertising dollars are expected to flow and how consumer demand will impact where and how content is consumed. The below press release has a lot of information packed in and this landing page for the report has some excellent infographics.

PwC also makes available a free 36-page analysis of the trends in the form of the Perspectives from the Global Entertainment & Media Outlook  2018 –2022.

The one caveat we always offer with this report is that the health of the “Magazine” segment is narrowly defined by revenue from paid circulation and advertising in print and digital “magazines.” So while the report predicts “magazines” will see revenues decline over the next five years, it doesn’t take into consideration revenue from such business lines as events, ecommerce/affiliate commerce, or custom publishing. In other words it’s a good representation of the health of the traditional magazine platform but not an accurate representation of the health of publishing overall.

You can explore the segment findings here.

A paid subscription offers access to dashboards and visualizations to dig deeper into the report’s data.

Here are a couple highlights I gathered from a quick look at the the above items (obviously there is much more to consider).

Growth Drivers mobile consumers, new tech like AI, personalization, OTT

OTT is Hot – The report assigns OTT video a five-year CAGR of 10.1%. Publishers should be eyeing this opportunity, especially in combination with subscription offers.

Podcasts & Streaming Music – According to the report: “Total global music, radio and podcasts revenue will increase at a 3.6% CAGR from US$94.9bn in 2017 to US$113.4bn in 2022, with growth largely generated by the recorded music segment.”

If there’s any question as to whether subscriptions and membership are the future of media and entertainment, take a look at where consumer dollars are aimed in the music industry in the below chart.

Convergence & Trust – PwC has highlighted “convergence, connections and trust” as major trends in the media and entertainment biz. Trust especially plays to publishers’ strengths, but the report also warns about consumer concerns about data and privacy.

—— Begin press release

Wednesday, 6 June 2018 – According to PwC’s Global Entertainment & Media Outlook 2018-2022 (Outlook), the ongoing rapid evolution of the industry has entered a dynamic new phase. 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.

“Convergence 3.0” is redefining the competitive playing field. Differing from earlier waves of convergence, it’s creating an ever-expanding group of “supercompetitors” and specialized, niche brands that are striving to secure the engagement and spending of increasingly demanding consumers.

As this wave of change plays out, the borders that once separated the entertainment and media, technology and telecom industries are dissolving. 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. In the process, business models are being reinvented so all companies can tap into new revenue streams and create relevance at scale. Some required capabilities include targeting fans and connecting more effectively with consumers to develop a membership mind-set. Amid these changes and ongoing advances in technology, the challenge to build and sustain consumer and public trust is growing more critical and the pace of change will only accelerate.

Continued overall revenue growth…

All of this is happening against a backdrop of continued global growth in industry revenue. The Outlook – which provides revenue data and forecasts for 15 industry segments across 53 territories – projects that total global spending on entertainment and media will rise at a compound annual growth rate (CAGR) of 4.4% over the next five years. This boost will see the industry’s global revenue reach US$2.4 trillion in 2022, up from US$1.9 trillion in 2017.

…but with stark differences among segments…

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%. OTT video follows at 10.1%. 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%.

Denis Wilson was previously content director for Target Marketing, Publishing Executive, and Book Business, as well as the FUSE Media and BRAND United summits. In this role, he analyzed and reported on the fundamental changes affecting the media and marketing industries and aimed to serve content-driven businesses with practical and strategic insight. As a writer, Denis’ work has been published by Fast Company, Rolling Stone, Fortune, and The New York Times.