Digital and online services are making significant inroads in the developed world, but a new report says traditional media will continue to attract the “lion’s share” of global consumer spending through 2017.
PwC’s 14th annual Global Entertainment and Media Outlook report, examining the years 2013-2017, says that digital innovation is “crucial” for entertainment and media companies even though consumer spend on digital content will only account for 16% of the total worldwide spend by 2017 (it currently accounts for 9% of total spending).
The report says that emerging markets such as Asia, Africa and the Middle East will see the most growth in entertainment and media spending, but that mature markets will be instrumental in driving the global shift towards digital consumption of entertainment and media.
The report projects digital to constitute 44% of all consumer spending in mature markets by 2017 – almost double that of 2008 and up 10 percentage points from 2012.
Consumers in those markets are increasingly shifting their purchasing away from physical items such as boxed video games, CDs and DVDs – which comprise 73% of total consumer spending today and are projected to fall to 53% by the end of 2017.
The internet will remain the fastest-growing segment in media and entertainment with a 13.1% compound annual growth rate (CAGR) during the forecast period. The segment is worth US$100.2 billion globally, and set to reach US$185.4 billion by 2017.
Mobile will account for a large portion of the growth, with a 27% CAGR meaning that mobile advertising revenues will exceed US$27 billion by 2017, an estimated 15% of Internet ad revenues. Video games (6.5% CAGR) and TV advertising (5.3% CAGR) are also showing strong growth, said the report.
While mobile advertising remains a “small piece of the puzzle” in Canada, the PwC report noted that it is growing rapidly – with revenues projected to increase to US$311 by 2017.
Online advertising remains strong however, with revenues projected to reach US$6.4 billion by 2017. Canada is a developed Internet market with a broadband penetration rate of 67% and a “highly Web-literate” population.
The report also predicted for Canadian satellite radio subscriptions to grow quickly, reaching US$387 million by the end of the forecast period.
