Entertainment & Media Outlook 2018-2022

Trending now: convergence, connections and trust

What is the Outlook?

Overview

Understanding where consumers and advertisers are spending their money in the entertainment and media industry can help inform many important business decisions. Covering 15 segments across 53 countries, PwC’s Global entertainment and media outlook is a single comparable source of consumer and advertiser spending data and analysis. Regardless of how you influence business decisions, the Outlook can help you understand industry trends so you can capitalise on new opportunities.

Product features

Updated annually and now in its 19th year, the Outlook is a powerful online tool that allows you to easily browse, compare and contrast spending. With the Outlook, you can:

● Compare digital and non- digital spend data for 15 entertainment and media segments across 53 countries
● See year-on-year growth with five-year forecast and five- year historical spend data
● Download country and segment data and commentary to PDF

Segments covered

The Outlook covers 15 E&M segments. This year, we expanded coverage of emerging revenue lines like esports and podcasts. The Outlook enables you to compare digital and non-digital spending data.

Locations covered

Understanding where consumers and advertisers are spending in the entertainment and media industry can help you understand industry trends and can inform key business decisions. The Outlook provides five-year forecast and five-year historic consumer and advertiser spending data across 53 locations, including Canada, US, UK and China.

Explore the Outlook themes

Convergence 3.0

A handful of factors combine, creating the momentum behind this new wave of convergence. We see five fundamental drivers of change:

Ubiquitous connectivity

Ongoing investments in technology and broadband network infrastructure have expanded coverage, capacity, bandwidth and connectivity to the point where consumers and their devices are always connected and always on. These developments support an ever-expanding supply and diversity of content, experiences and applications that can be delivered directly and digitally to users.

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The mobile consumer

As spending grows, the connected mobile device is rapidly becoming consumers’ primary means of accessing E&M content and services across virtually all markets worldwide. That makes it imperative for content creators, distributors and platforms to develop the means to reach and monetise mobile consumers directly through mobile experiences rather than through traditional sales and distribution approaches.

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Need for new sources of revenue growth

Many sectors of the E&M ecosystem are showing weak, stagnant or even declining growth. Players will find that the streams that nourished them in previous years will not be flowing with the same force. Simultaneously, telecommunications companies face stagnant core businesses and are looking at E&M as a growth driver of products, services and experiences. Every company in the E&M ecosystem is racing to develop new revenue streams, especially in digital. 

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Value shift to platforms

As entertainment and media has digitized, social media and technology platforms have become the primary beneficiaries of users’ growth in time and spending. The platforms have shown greater effectiveness in monetizing across advertising, subscriptions and transactions. These platforms are playing a more prominent role in content creation. In parallel, many publishers, especially in video, are investing in their own platforms and seeking to become more proficient in technology, data and digital delivery.

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Personalization

Consumers no longer want one-size-fits-all E&M experiences determined by network programmers or publishing editors. Neither do advertisers. As a result, data analytics and technology that can support better decision-making with respect to content, distribution, user experience and monetisation have become increasingly critical to success in the E&M marketplace.

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Connections

With the rise of supercompetitors, more specialized brands need to build businesses of relevant scale. What capabilities does it take to build relevance at scale? Our research and industry experience point to three vital ones:

Be a powerhouse of quality and engagement

As creators of high quality and distinctive content, successful players are true specialists who are passionate about their subject matter and care about delivering a high-quality experience for their audiences and fans. These attributes create a sense of identity and community between the brand and its customers that is not easily matched.

Aim at high-value and hard-to-reach audiences

Most successful players target their content and user experiences at high-value audiences that others find challenging to attract, engage and aggregate. They also tend to be highly efficient and effective at reaching these audiences and turning them into active fan communities. Largely as a result, these focused players enjoy a very high concentration of defined user/fan groups. Many members of their audiences self identify as loyal fans, and in turn recommend the brand and content experience to others, which further accelerates organic growth.

Deliver content and advertising consistent with the brand and user expectations

Advertisements and content focused on a specific experience, a narrowly defined theme or a fan community are more likely to be consistent, to be viewed, to be brand safe and to be in the right context for the users. It also holds true that a brand’s video, article, music or podcast is more likely to be seen, read or heard by the fans for whom it was created. In other words, when it comes to getting people to consume the content a company is offering, addressing its fans’ interests and preferences brings benefits in terms of both subscriptions and advertising.

Trust

Trust will be a vital determinant of the sector’s ability to forge connections and succeed in an age of convergence.

Content trust

Is your content safe?

Broadly speaking, advertisers are raising questions about the quality, safety and appropriateness of the content they advertise against. As algorithms serve up millions of ads without human intervention – sometimes accompanying videos with objectionable content – major companies have grown concerned about brand safety on some of the leading platforms.

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Audience trust

Is your audience who you say it is?

Today’s technology offers the tantalising prospect of ultraprecise audience measurement: who is watching and for how long? But legitimate questions have been raised as to how much faith can be put in the measurement. A series of media and academic reports have highlighted the presence of bots, or fake accounts, on social media platforms. Multiple investigations have shown that it is quite easy for people to create personas – even entire organisations – on social media platforms that don’t exist in real life.

 

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Data trust

Are you taking appropriate and proper care of the data that consumers entrust to you?

As more E&M companies enter direct commercial relationships with customers, whether selling products inside video games or signing up subscribers to OTT apps, they are assuming more responsibility for the protection of credit card numbers. In an age of large-scale hacks, it is natural for users to question whether it makes sense to transact so freely. At the same time, the ability of app developers to access the profiles of tens of millions of social media account holders has highlighted the dilemma of data protection – even in instances when users may have accepted terms and conditions that allow for the sharing of data.

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Monetization trust

Are your investments paying off?

Again, e-commerce and online advertising and marketing offer the potential for transparency and direct measurement. But questions about how audiences are measured, or the length of time people actually viewed an online video counted as a view, or what percentage of viewers are skipping ads, or whether a publisher is delivering the promised audience to an agency, or whether an agency is delivering the promised audience to a client have not been answered to everyone’s satisfaction.

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Ecosystem trust

Is your company or industry good for society?

This may seem like a philosophical question. But, again, within the past year, we have seen significant questions raised about the use of television networks as vehicles for propaganda, about the pervasiveness of hate speech on discussion boards and about the use of social media platforms by parties that sow division and ethnic strife. To a degree, this is nothing new. But the sheer size, reach and utility of today’s media platforms are making them a target once again.

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How we can help

Our industry professionals help Entertainment and Media companies achieve their business objectives in a rapidly evolving landscape. Contact us to discuss these trends, their impact to the Canadian market and how your company can respond.

Contact us

Anita McOuat
National Technology, Communications, Retail & Consumer (TCRC) Leader, PwC Canada
Tel: +1 416 869 8667
Email

John Simcoe
Partner, PwC Canada
Tel: +1 416 815 5231
Email

Anne Tauber
Partner, PwC Canada
Tel: +1 416 815 5315
Email

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