Press Release: Advertising to Outpace Consumer Spending in the Migration to Digital for Entertainment & Media Industry, Says PwC US
NEW YORK, June 3, 2014 - As the entertainment & media (E&M) industry continues its digital shift, advertising growth is outpacing consumer spending, according to PwC's annual Global Entertainment and Media Outlook 2014-2018 - an in-depth five-year outlook for global consumer spending and advertising revenues directly related to entertainment and media content - released today. Attracting, retaining, and monetizing the digital consumer remains challenging and requires businesses to apply a 'digital mindset' to build the right behaviors to move from a digital strategy to a business strategy fit.
The Outlook forecasts that global E&M spending is expected to rise from $1.8 trillion in 2013 to $2.3 trillion by 2018, growing at a compound annual growth rate (CAGR) of 5 percent. The U.S. remains the largest E&M market, growing at a 4.8 percent CAGR and reaching $724 billion by 2018, from $573 billion in 2013.
Globally, digital E&M spending (excluding Internet access spending) is expected to grow at a 12.2 percent CAGR between 2013 and 2018 and account for 65 percent of global entertainment and media spending growth by 2018 - almost two out of every three dollars. Digital spending in the U.S. is expected to grow at an 11.2 percent CAGR over the next five years and account for 45 percent of overall U.S. E&M spending growth, up from 33 percent in 2013. U.S. digital advertising is leading the way; 40 percent of total advertising growth is expected to be digital by 2018.
According to Outlook, E&M companies should operate with a digital mindset. This requires adopting three behaviors: forging trust with consumers; creating the confidence to move with speed and agility; and empowering innovation.
"The consumer is now at the center of their own entertainment and media world, pivoting from finding to being found by content experiences via every channel and device," said Ken Sharkey, PwC's U.S. entertainment, media & communications practice leader. "The battle for relevancy has never been greater as E&M businesses are being joined by companies from other industries such as retailers, automakers and utilities to compete head on for the same consumer relationship. E&M businesses may need to look beyond technology, and adopt more flexible business models that allow them to get closer to the consumer. What's important to the consumer is the specific experience - whether it's live or on-demand and on any screen."