Dramatic shifts are underway in how entertainment and media companies compete and generate value, as the quality of the experience they deliver to consumers becomes their primary basis for strategic differentiation and revenue growth. Below are some major tipping-points, which are occurring or will happen across various segments.
The fastest-growing markets are those which currently spend the least, while those which have high spending are growing slowly. In the lowest spending markets, an increase of just a few dollars per year in E&M spending will represent substantial growth. As disposable incomes rise steadily in these markets such modest increases in E&M spending are all but inevitable. In the highest-spending markets, by contrast, consumers would need to be a substantial increase in spending per year to produce a similar increase, which is virtually impossible in the context of much slower economic growth in these markets.
The broad pattern in the global E&M market is clear: as countries become more developed, E&M spending per capita relative to its GDP increases and growth slows. In fact, most E&M segments will fail to keep pace with GDP growth over the next five years. Although only two segments, newspapers and magazines, are declining in absolute terms, many others are slow-growing and not keeping pace with the general rate of economic growth.