The combination of new digital revenue streams and consumers who are
willing to pay for content will result in higher revenues for E&M
companies through 2015
TORONTO, June 14, 2011 /CNW/ - Entertainment and media (E&M) spending
rose by 4.8% in Canada in 2010 and 3.2% for Canada and the US combined,
the first increase in North American spending since 2007, according to
PwC's Global Entertainment and Media Outlook 2011-2015, which provides forecasts and analysis on 13 major E&M industry
segments in 48 countries.
"The entertainment and media industry is highly motivated to create
experiences that engage today's consumer, across multiple-platforms,
which in turn is creating multiple opportunities for companies to
profit," says Jerry Brown, Associate Partner in the Entertainment &
Media practice for PwC.
Canada will grow faster than the US through 2015, with an expected 6.1%
compound annual increase compared with a 4.6% compound annual growth
rate (CAGR) for the US. Gains in Canadian spending will be due to
double-digit growth in Internet advertising (almost 15% CAGR) and
increases of almost 12% for Internet access payments (both high speed
and mobile), TV subscriptions (7.4%), trade magazines (6.9%) and
out-of-home advertising (6.4%). Both advertising and consumer/end-user
spending will also grow in Canada by 5.2% compounded annually.
Accelerated shift of spending from traditional to digital platforms
Currently spending on digital platforms accounts for 26% of all global
spending on entertainment and media, but by 2015 PwC says that share
will rise to almost 34%, as more consumers access content online and
through other non-traditional methods.
This will have impacts across all industries and result in new
complimentary revenue streams for traditional business models, from
Internet and TV advertising to video games, movies and music. Internet
and TV advertising will grow by over 50% by 2015 (from US$5.6 billion
to US$8.6 billion in Canada) while mobile apps, the spread of tablets
and smartphones will mean a more than three-fold increase in mobile TV
advertising (from US$77 million to US$241 million by 2015 in Canada).
"Video-on-demand, new streaming services and 'cloud' based digital
storage solutions like digital lockers are going to feed Canadian
consumers spending on TV and movies over the next five years," says
Michael Paterson, Partner in the Entertainment & Media practice of PwC.
"At the same time, more consumers using smartphone's and tablets,
together with the increased downloading of video games and the growth
of social network games will expand the online and wireless game
And while the newspaper market in Canada, forecasted to be US$3.1
billion in 2015, will be over 10% smaller than it was in 2006, paid
online content and distribution to mobile devices will begin to offset
ongoing decreases in print circulation spending. By 2015 newspaper
publishing spending will edge up by 1.5% compounded annually.
"Innovative approaches have supported an unexpectedly strong recovery in
advertising led by online and TV. This has helped restore the
attractiveness of advertising-funded models for all media types and
formats, which are blended with a subscription revenue stream," says
Consumers are in the driver's seat but what will they pay for?
Many consumers have learned to expect a lot of content to be free.
Convincing people to pay where they have not previously will be
difficult and require a deep understanding of what consumers' value and
will pay for.
"Consumers have never had it so good when it comes to accessing premium
content over a variety of devices," says Paterson. "E&M CEOs need to
adapt their business models to continue to meet what the consumer's
demand. The bottom line is that in order for business to continue to
create quality content, someone has to pay."
PwC believes that convenience, the consumer experience as well as
overall quality are the key ingredients that matter to consumers when
choosing from the menu of content and delivery channels available.
Alongside these are participation and privilege - consumers enjoy playing an active role in shaping their content plus
they are happy to pay for the privilege to "jump the line" to get
earlier access to content.
Brown continues, "The challenge for Canadian entertainment and media
companies will be to turn what consumers want and expect into
sustainable, profitable and engaging relationships, by offering them
advantages which they value. As the digital market evolves and
technologies and legislation mature, these factors will reduce the
ubiquity of pirated content."
"New ways to store and access user content like Apple's iCloud intend to
be a more convenient, consistent alternative to peer to peer sharing
and storing content on a device. Cloud based solutions will allow
greater certainty that content has the appropriate rights assigned to
the user which will further benefit rights owners over time."
Notes to Editor
About the Outlook
PwC's Global Entertainment & Media outlook 2011-2015, the 12th annual edition, contains in-depth analysis and forecasts of 13 major
industry segments across four regions of the globe: North America (USA
and Canada), EMEA (Europe, Middle East and Africa), Asia Pacific and
Latin America. To access the Global Entertainment & Media Outlook
2011-2015 online go to: http://www.pwc.com/outlook. For press copies contact Kiran Chauhan, firstname.lastname@example.org, 416-947-8983.
Digital spending, as included in the Outlook, consists of broadband and
mobile Internet access, online and mobile Internet advertising,
video-on-demand, mobile TV subscriptions, digital music, electronic
home video, online and wireless video games, digital consumer magazine
circulation spending, digital newspaper circulation spending, digital
trade magazine circulation spending, electronic consumer, educational
and professional books, and satellite radio subscriptions.
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advice. See www.pwc.com for more information. In Canada, PricewaterhouseCoopers LLP (www.pwc.com/ca) and its related entities have more than 5,700 partners and staff in
offices across the country.
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