(Toronto, June 20, 2017)--To address slower-growth rates and increased competition, leading entertainment and media companies are developing innovative strategies and improving their capabilities to engage their most loyal and passionate users — their fans. According to PwC’s Global entertainment and media outlook 2017-2021, companies are creating more compelling and accessible content with comprehensive distribution that better connects the user to a great experience, and at an attractive price.
Canadian entertainment and media revenues are projected to rise at a compound annual growth rate (CAGR) of 2.8% in nominal terms over the coming five years, from US$42.98 billion in 2016 to US$49.40 billion in 2021, according to the report. This growth rate represents a slowdown from last year’s 3.5% growth in industry revenues, and will lag behind overall global economic growth during the next five years. Total data consumed in Canada will grow by CAGR 18.1% and reach 27trn MB by 2021.
These trends reveal that the entertainment and media industry is facing increased disruption due to the shift in consumer behaviour towards online entertainment, particularly over the past few years. “As Canadian content creators develop their digital strategies, they are being compelled to prioritize the user experience in order to compete with online options,” says John Simcoe, National Entertainment and Media Outlook Leader, PwC Canada. “User experience is becoming a key business driver that will differentiate what will thrive in the long term as opposed to be a one hit wonder in this sector.”
Internet video (SVOD), Internet advertising, and Out of Home (OOH) advertising top the list with steady and sustainable growth in Canada. Canada has an advanced Internet advertising market, valued at US$4.4bn in 2016. Widespread Internet access has boosted online advertising spending, and in 2016 fixed-line broadband household penetration rate stood at 96.4%.
Canada has been an early adopter of Internet video, with Netflix launching in 2010 and domestic operators launching OTT platforms to counter the threat of cord-cutting. With growth of 7.1% CAGR over the forecast period, Internet video will produce revenues of US$1.6bn in 2021. Over 70% of this revenue will be attributable to subscription-based VOD, with transactional sites such as Apple’s iTunes accounting for the remainder.
Canada’s total out-of-home (OOH) revenue in 2016 came to US$572mn, up from US$436mn in 2012. Growth is set to continue at a 5.1% CAGR over the next five years, reaching US$732mn by 2021. Canada’s OOH market has benefitted from steady economic growth in recent years, and this is expected to continue through to 2021. OOH advertising is a particularly strong proposition in Canada, given over 80% of the population lives in cities. Toronto, Montreal and Vancouver alone house one-third of the country.
Globally, there are major digital tipping-points occurring or in prospect across all segments…
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