PwC Entertainment & Media Outlook · Business Insider, Forbes, Variety, International Data Corp.,...
Transcript of PwC Entertainment & Media Outlook · Business Insider, Forbes, Variety, International Data Corp.,...
PwC Entertainment & Media Outlook2017-2021
www.pwc.no
www.pwc.com/outlook
Consumer/end-user & advertising spending
5 Year historical & 5 Year forecast data 54 countries 17 segments
Out-of-home advertising
Traditional TV and home video
Virtual realityE-sports
Business- to-business
Internet advertising
Internet video
Video games MusicCinema
Book publishingRadio Magazine publishing
TV advertisingData consumption
Newspaper publishing
Internet access
Emerging technologies are enabling companies to differentiate by creating innovative user experiences
The accelerating speed of technological change is opening up large opportunities for innovation in product offerings that revolve around user experience
Emerging technologies are
changing the E&M industry
2021 outlook
Artificialintelligence
Internet of Things
Blockchain
Augmented reality
3D printing
Robots
Virtual realityDrones
Virtual reality
E-sports
1 Technology is the driving force behind new and rapidly growing segments 2 Exploitation of data and new technology
is enabling innovative user experiences.
Technology companies now dominate the world‘s largest companies measured by market capitalization
2007
2017
Top 5 public traded companies by market cap (June 30) TechOther
Source: FT Global 500 & Ycharts.com
Companies are already leveraging emerging technologies to enhance user experience
Technologies transforming
E&M
AI/ auto-mation AR/ VR
Cyber- security
Access, not owner-
ship
Big data/ data
analytics
Internet of Things
3D printing
Cloud
Worldwide tech company developing next mobile OS with AI-powered features to streamline consumer experience.
A U.S-based VR startup is planning to open a VR multiplex immersing consumers in a personalized entertainment experience.
Global telecom company invests in entertainment operating system to deliver a personalized entertainment experience across all devices.
Social networking company releases anti- harassment capabilities to enhance user safety.
Multinational E&M conglomerate has created a patent-pending 3D printer.
The sharing economy shifts consumer behaviour from owning assets.
E-commerce company is investing in an IoT voice-led operating system to enable smart devices.
Multinational tech company providing real-time sports statistics and point-by-point analysis.
Business Insider, Forbes, Variety, International Data Corp., Tech News World, CNBC, PwC
What Are the Global Trends?
Expected global growth in E&M expenditures of 4.3%
Scandinavia3.1%
Germany1.8%
Russia7.2%
Japan1.8%
China8.3%
India10.5%
Global4.3%Brazil
4.7%
US3.7%
France2.4%
UK3.0%
BRIC: 8.0%
Mature: 3.1%
E-sports and internet video are expected to outperform the other segments in the global E&M market in terms of percentage growth
Global growth by segment 2016-2021F
E-sports
Internet video
Internet advertising
Video games
Internet access
Cinema
Total music revenue
TV advertising
Business-to-business
Radio
Total traditional TV and home video
Books
Magazines
Newspaper
21,7 %
11,6 %
9,8 %
8,2 %
6,0 %
4,4 %
3,5 %
2,8 %
2,7 %
2,1 %
1,3 %
1,1 %
-0,5 %
-2,7 %
The Scandinavian E&M market
Spending on digital channels is expected to drive growth in the Scandinavian E&M market
2012
2013
2014
2015
2016
2017
F
2018
F
2019
F
2020
F
2021
F
40
35
30
25
20
15
10
5
US
D in
bill
ions
Internet Access
Non-Digital
Digital
Total Digital and
Non-Digital
5.0%
8.1%
-0.9%
2016-2021F CAGR
3.1%
Digital is defined as:• Online and mobile internet
advertising• Mobile TV subscription• Digital music• Electronic home video• Online and wireless video
games• Digital consumer magazines
circulation spending• Digital newspaper circulation
spending• Digital trade magazine
circulation spending• Electronic consumer,
educational, and professional books
• Satellite radio subscriptions
Internet advertising is expected to lead growth across media segments in the Scandinavian E&M market towards 2021
Scandinavian growth by segment 2016-2021F
Internet advertising
Video games
Internet access
Internet video
Music
Radio
Out-of-home advertising
Business-to-business
TV subscriptions and licence fees
TV advertising
Book publishing
Filmed entertainment
Magazine publishing
Newspaper publishing
8,3 %
6,7 %
5,0 %
4,2 %
2,8 %
2,4 %
2,1 %
1,4 %
1,1 %
0,9 %
-0,2 %
-1,0 %
-1,3 %
-4,6 %
Digital advertising revenues are expected to represent 58% of total Scandinavian advertising revenues in 2021
2016 2021FCAGR: 3.2 %
Digital advertising Television - excluding online Newspaper print
Business-to-business Magazine print Other
8 566USD
millions
10 023USD
millions14%
12%
58%
48%
16%
18%
5%4%
4%
9%6% 8%
Mobile is expected to make up more than 70 % of internet advertising revenue in US by 2021
120
100
80
60
40
20
US
D in
bill
ions
Internet advertising in US advertising revenue
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
Mobile internet advertising in USA
Non-Mobile internet advertising in USA
18.7%
-3.7%
2016 –2021F CAGR
91%83%
75%
65%
49%
40%
34%
30%
27%26%
74%73%
70%66%
60%
51%
35%25%
17%9%
User Experience Driving Growth
Print will continue to see a negative growth rate and digital will not compensate for this loss
60 %
50 %
40 %
30 %
20 %
10 %
0 %
(10 %)
Year-over-year % growth rate in Scandinavia
2016 –2021F CAGR
- 6.0 %3.1 %
- 6.7 %
11.7 %
Print advertisingDigital advertising
Print circulation
Digital circulation
2013
2014
2015
2016
2017
F
2018
F
2019
F
2020
F
2021
F
Mobile will continue to be the biggest growth story towards 2021 in internet advertising
2016 2021FCAGR: 8.3 %
3 788USD
millions
5 638USD
millions
16%24%
17%
40%15%
4%
25%
35%
19%
4%
2016 –2021F CAGRMobile 17.6 %
Video 8.9 %Classified 2.8%
Search 10.7 %
Banner/Display 0.3 %
Internet advertising market by sub segment in Scandinavia
Number of apps per smartphone & tablet is expected to continue to grow and drive growth in mobile internet advertising
Apps per smartphone & tablet
200
180
160
140
120
100
80
60
40
20
2012 2013 2014 2015 2016 2017F 2018F 2019F 2020F 2021F
2016 –2021F CAGR
7.7 %9.2 %10.5 %
6.0 %Western EuropeScandinaviaCentral & Eastern Europe
US
Num
ber o
f app
s
The gap between TV advertising revenue and Internet revenue is increasing
Internet and TV advertising revenues in Scandinavia
6 000
5 000
4 000
3 000
2 000
1 000
2012 2013 2014 2015 2016 2017F 2018F 2019F 2020F 2021F
2016 –2021F CAGR
0.9 %8.3%
TVInternet
USD
in m
illio
ns
Traditional losing ground to online streaming services focusing on user experience
Traditional TV advertising is losing ground to online streaming services.
2012
2013
2014
2015
2016
2017
F
2018
F
2019
F
2020
F
2021
F
1 800
CAGR 1,80%CAGR 0,90%
1 500
1 200
900
600
300
US
D in
mill
ions
84% 83% 81% 80% 79% 77% 76% 75% 73% 72%
5% 6% 7% 8% 9% 10% 11%
15% 15% 15% 15% 16% 16% 16% 16% 17% 17%
Online
Multichannel
Terrestrial
14.5%
-0.9%
2.8%
2016 –2021F CAGR
Electronic home video is expected to grow, but cinema is still keeping up
100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%
2012
2013
2014
2015
2016
2017
F
2018
F
2019
F
2020
F
2021
F
Scandinavianfilmedentertainmentrevenue
Physical home video
Cinema tickets
Electronic home video
-9.6%
4.2%
2.0%
2016 –2021F CAGR
54%
7%
39% 38%
21%
41%33%
33%
35% 35%
41%
24%18% 16% 14% 12% 11% 10%
46% 49% 51% 52% 52% 53%
36% 35% 36% 36% 36% 37%
Despite growth in streaming, live music will continue to be the main revenue stream in the music industry
Live music
Physical music
Streaming
2.5%
6.7%
-3.7%
2016 –2021F CAGR100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%
2012
2013
2014
2015
2016
2017
F
2018
F
2019
F
2020
F
2021
F
Scandinavian music revenue
68%
12%
16%13%
11% 11% 10% 10% 9% 9% 8% 8%
16%19% 21% 23% 24% 25% 26% 27% 27%
67% 68% 67% 66% 65% 65% 64% 64% 65%
Emerging technologies will change how companies generate, distribute and control content
Among emerging technologies, AI, IoT and VR received most funding in 2016
Global VC funding, Essential Eight technologies
5 876USD
millions
33%
29%
24%
14%
IoTVROther (Robots, AR, Drones, 3D Printing and Blockchain)
AI
Source: CB Insights, PwC, VC Funding
Outlook2017-21:AIisalreadyentertainingyou.DeborahBothun&DavidLancefield
Benefits from AI include an improved ability to tap into consumer preferences and generate personalized content
AI can help companies innovate content creation and improve customer experience
Simplifying content creation• AI-generated music• AI generated video-ads
Improving the customer experience• AI-generated content curation (e.g. Spotify playlists)• AI-generatedproductrecommendations(film,TV,music)
Better, more creative decisions• Maximizationoffilmandcontentlicensingrevenues• AI-generated insight from video and social media
Freedom of repetitive tasks• Programmatic ad buying• Newsletter curation, creation and distribution• AI-generatedsportssummaries,filmscoringandstockmusic
Artificial Intelligence (AI) could contribute up to $15.7 trillion to the global economy by 2030 and the E&M industry can seize a significant share of this gain
PwC AI-report: Sizing the prize
Scandinavia is better positioned to create value from Internet Of Things compared to the rest of the world
Key drivers for the Scandinavian IoT value creation potential
1 Welldevelopedfiber-andinternet- infrastructure.
2 4G coverage is widely spread across Scandinavia. Sweden is leading in testing 5G coverage.
3 On average, each person in the Nordics has almost 3 devices connected to the internet in 2016. By 2021, this is expectedto grow to 6 devices per capita, which represents four times as many devices as in the rest of the world.
By expanding to new or even non-existing entertainment platforms, E&M companies can unlock the potential of IoT
PwC AI-report: Sizing the prize
67M USDIoT Scandinavian market size 2016
20 %Nordic loT CAGR 2016-2021 in the
Nordics 2016 - 2021Source: Connected Things: New digital ecosystems – unlocking the growth potential of IoT (2017) Arthur D. Little and Telia
We are at an amazing point in history for artists. A revolution is going to happen, and next year it’s going to take over. It’s the ability of artists to have the control and the say of what they do with their music at large. The answer to this is in the blockchain.”
- Imogen Heap, British singer & songwriter
CEO perspective: E&M CEOs are mostly concerned about changing consumer behaviour
81 % 78 % 78 %
77 % 75 %
of E&M CEOs are concerned about
changing consumer behaviour
of E&M CEOs are concerned about availability of key
skills
of E&M CEOs are concerned about
uncertain economic growth
of E&M CEOs are concerned about the
speed of technological change
of E&M CEOs are concerned about
volatile energy costs
Find your own Outlook story
online ...www.pwc.com/outlook
Contact us!
Eivind NilsenPartner 952 608 [email protected]
Øystein B. SandvikDirector 952 604 [email protected]
© 2017 PwC. All rights reserved. In this context, “PwC” refers to PricewaterhouseCoopers AS, Advokatfirmaet PricewaterhouseCoopers AS, PricewaterhouseCoopers Accounting AS and PricewaterhouseCoopers Skatterådgivere AS which are member firms of PricewaterhouseCoopers International Limited, each member firm of which is a separate legal entity.