Global Entertainment and Media Outlook: Music Courtesy Price Waterhouse Cooper
Click on the Image to Enlarge
Total entertainment and media spending on digital services is forecast to grow at a 12.2% compound annual growth rate between 2013 and 2018 and account for 65% of global entertainment and media spending growth, excluding spending on Internet access.
That’s according to Price Waterhouse Cooper, which released its latest media forecast for 2014–2018.
Advertising is leading the way. In 2018, 33% of total advertising revenue is forecast to be digital, compared to 17% of consumer revenue.
However, profiting from the migration by increasing revenue from digital consumers will not just be about the application of digital technology. It will be about applying a “digital mindset” to build the right behaviors, advancing from a digital strategy to a business strategy fit for a digital age, according to PwC’s report.
“The bedrock of a strategy fit for the digital age is the digital mindset: getting ever closer to the customer — across the entire organization, and in everything it does. We now see that mindset embedded in many entertainment and media companies,” says Marcel Fenez, PwC’s Global leader, entertainment & media.
But the industry needs to get even closer to the consumer and adopt more flexible business models, according to Fenez. “To do this, companies must exhibit three behaviors: forging trust with consumers; creating the confidence to move with speed and agility; and empowering innovation. This will be an important step in monetizing the digital consumer.”
Mobile Internet penetration will reach 55% in 2018, which will help drive digital advertising to increase its share of total advertising revenue to 33% by 2018, up from 14% in 2009. With Internet advertising growing at a 10.7% compound annual growth rate (compared to a total advertising CAGR of 4.4%), the industry is approaching a significant tipping point.
PwC forecasts music streaming to “explode,” with a compound annual growth rate of music-streaming revenues at 14.5%, growing the earnings pie from $848 million to $1.7 billion. As a portion of total music industry earnings, streaming is forecast to account for 37% of total digital recorded music revenues, up from 23% in 2013.