3 Takeaways from PwC’s 2020 Entertainment & Media Outlook
Last week consulting firm PwC released its annual “Global Entertainment and Media Outlook,” which forecasts how different segments of the media industry will grow or decline contract from 2016 to 2020. While the report predicted magazine publishing revenue, (narrowly defined as revenue from print, digital, and website advertising and circulation) would increase only 0.1% over that four-year period from $30.5 billion to $30.7 billion, PwC did point toward growth in other areas of the media industry that magazine publishers can capitalize on -- from video to mobile and online advertising.
Internet Ad Spending to Surpass TV
According to PwC, U.S. internet advertising is predicted to overtake broadcast TV advertising by 2017, reaching $75.3 billion. By 2020, PwC projects U.S. internet advertising will reach $93.5 billion. That’s a 42.6% increase over the U.S.’s 2015 online ad revenue of $53.6 billion.
This rapid growth spells major opportunity for publishers to expand their online advertising revenue. Recently publishers have enhanced their ad offering by leveraging demographic and behavioral data, cultivating programmatic strategies, creating lead generation campaigns, and offering custom native advertising campaigns. PwC notes that new ad innovations are needed as consumers continue to resist poor online ad experiences and increasingly adopt ad-blocking technology.
Mobile Ads Continue to Evolve
A subset of internet advertising, mobile ads will drive significant revenue over the next four years. While today mobile ads make up roughly a third of all online advertising (34.7%) at $20.7 billion, by 2020 mobile ads’ share will grow to nearly half of all online advertising (49.4%). Mobile video ads will represent much of that growth, abetted by the anticipated rollout of 5G mobile networks, reports PwC. 5G networks will enable higher quality videos to stream even faster on mobile devices.
Third party distributors like Google and Apple are also working to create faster and more seamless mobile reading experiences through efforts like Google AMP and Apple News. Publishing Executive will explore how these types of platforms can aid publishers at the upcoming summit FUSE: The Convergence of Media & Technology. Google’s director of news and magazines partnerships Craig DiNatali will discuss the future of mobile, the launch of Google AMP, and opportunities for publishers to monetize mobile content.
Video Will Dominate Internet Usage
Another medium publishers should take advantage of in this changing media market is the rise of digital video content. PwC predicts that video will drive 85.5% of total internet data usage by 2020.
In recent years, publishing and media companies have increased investment in digital video. Large publishers like Hearst and Time Inc. have launched dedicated video studios and industry disruptors, such as Buzzfeed and Vice, have predicated their growth on ambitious video strategies. Trends point toward video that is mobile and social friendly, catering to the platforms on which it is shared. Real Simple, for example, is developing content ideal for specific platforms like Snapchat and Facebook, recognizing that these platforms require different types of video experiences.
“For content providers across the entertainment and media industry, the message is clear: seamless delivery and a focus on the consumer experience is the formula for growth in today’s evolved entertainment and media business landscape,” said PwC’s Deborah Bothun, global leader of entertainment & media and U.S. leader of entertainment, media, and communications.