12 June 2012 - Despite ongoing economic uncertainty, the past year has seen global sales of tablets and smart devices reach record levels once again, underlining the growing revenue opportunities from digital delivery of entertainment and media (E&M) content and advertising to increasingly connected, and particularly mobile, consumers.
According to PwC’s annual Global Entertainment and Media Outlook 2012-2016, released today, digital opportunities are now well understood by media companies, advertising agencies and advertisers themselves: the industry is approaching the ‘end of the digital beginning’ as rising comfort levels with digital mean that it is becoming business-as-usual. Although the ‘fog’ experienced in the past few years around strategic options is lifting, there is more to be done: today’s challenge is in the implementation of those digital strategies.
PwC believes that though the focus may still be on digital migration, challenges for E&M companies differ according to diverging market pictures across segments and geographies.
Tipping points and contrasting market development rates highlighted by this year’s Outlook data and analysis show:
“The various segments of the E&M sector are at different stages of digital development, but they are all embracing digital to meet the ever-changing demands of consumers effectively and profitably. Entertainment and media companies have reached what we’re calling the ‘end of the digital beginning’: they’ve made the commitment to a digital future, and are now striving to make the necessary changes to their products, distribution and organisations.”
According to the Outlook, the challenge now for E&M companies in a world where digital is established as ‘business as usual’ – and in those markets where the infrastructure is suitably developed to support digital distribution and consumption – is to focus on planning out and executing their digital strategies. Uncertainty in past years triggered by digital migration is giving way to a sharper focus on identifying, choosing and executing the business models, organisational structures and skill sets to harness new consumer behaviours and deliver rising future value.
“As the walls of the silos come down, individuals within these organisations will need to adapt to new performance indicators and operating behaviours or face the risk of being left behind as the digital generation moves past them.”
In the face of sweeping change and uncertainty, the E&M industry has spent the past few years seeking effective business and operating models for the new world, through a cycle of constant experimentation, ongoing innovation and targeted analysis of the results. This will continue. But with digital now at the core of business-as- usual, PwC believes that experimentation and execution are no longer sequential but will proceed in parallel, enabling E&M companies to press ahead into the ‘new normal’ with confidence.
“We've reached the point at which talking specifically about 'digital' increasingly misses the point. As digital becomes the standard, its rising penetration ceases to be a topic for discussion in itself. What matters now is how companies capitalise on it and operate within it.”
PwC’s Global Entertainment and Media Outlook 2012-2016, the 13th annual edition, contains in-depth analysis and historical and forecast data for advertising and consumer/end-user spending in 13 major industry segments across 48 countries. Find out more at http://www.pwc.com/outlook.
Business-to-business, Consumer and educational books, Consumer magazine publishing, Filmed entertainment, Internet access spending: wired and mobile, Internet advertising: wired and mobile, Newspaper publishing, Out-of-home advertising, Radio, Music, Television advertising, TV Subscriptions and license fees, Video games.
Digital spending consists of broadband and mobile Internet access; online and mobile Internet advertising; mobile TV subscriptions; digital music; electronic home video; online and wireless video games; digital consumer magazine circulation spending; digital newspaper circulation spending; digital trade magazine circulation spending; electronic consumer, educational, and professional books; and satellite radio subscriptions.
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