Entertainment & Media Companies in South East Asia Harness Data to Drive Deeper Engagement as Advertising Faces Headwinds

Amid shifting consumer preferences, advances in technology and disruption to business models, the strategic imperative for E&M companies is to turn customers into fans.

Jakarta, 3 August 2017 - Dramatic shifts are underway in how entertainment and media companies in South East Asia generate value, as they pivot towards quality of customer experience as the primary basis for strategic differentiation and revenue growth. To thrive in a marketplace that is increasingly competitive and crowded, companies need to develop strategies and capabilities to engage their most loyal and passionate users, and to turn them into fans. According to PwC’s Global Entertainment and Media Outlook 2017-2021, this means that companies must combine compelling content with breadth and depth of distribution and then connect it all to a great user experience, where content is easily discoverable on an array of screens and at an attractive price. 

Key Takeaways from Indonesia:

• The report forecasts that by 2021, revenue growth of E&M in Indonesia will reach 10% (Compound Annual Growth Rate or CAGR 2016-2021) or around US$8,168mn with internet video constituting the largest contributor at nearly 30% (US$61mn). Internet video produced revenues of US$24mn in Indonesia in 2016 and is estimated to reach US$85mn in 2021.
• Meanwhile, the books segment will be declining by 0.3% or US$7mn. Books produced revenues of US$433mn in Indonesia in 2016, which is expected to decline to US$426mn in 2021.
• Indonesia will generate a significant growth of 11% on accessibility, 10.3% (US$5,338mn) on advertising and 6% (US$1,050mn) on consumers.
• Traditional TV/video will still play a huge part in Indonesia’s E&M industry landscape at 53.8% in 2021 out of Indonesia’s total advertising mix.
• Indonesia’s social and casual gaming segment is also forecast to grow significantly, with segments including advertising, social, PC games and console games.
• The mix of advertising, social, PC games and console games will be dominated by social segments with 77% (US$569mn) out of the total mix showing improvements from 2016’s 61% (US$210mn) contribution. The advertising segment also shows growth, resulting in a 6% contribution.

Current advertising growth is now overwhelmingly driven by internet advertising. The segment is still the largest in the global sector and it is expected to grow at the highest rate, both locally and globally.

Mohammad Chowdhury, PwC Telecom, Media and Technology Leader for Indonesia stated the following:

“Indonesia’s internet advertising market has shown strong growth compared to the other segments, whereas Singapore’s growth, for example, is more muted, with non-video display showing a decline in the forecast period. Indonesian entertainment and media companies have a great opportunity today to get closer to the consumer and create a great user experience.  Like others in the region, the Indonesian media companies have to turn customers into fans.”

This report also finds the steady march of digital technology has ushered in a more direct-to-consumer environment characterised by greater choice and user control. Businesses that are fan-centric will find themselves with audiences that are more engaged, more committed and spend more per capita.

On that note, Michael Graham, PwC SEA Media Consulting Leader, added:

“Consumers in entertainment and media business can drive overall business value. Which is why content efforts must prioritise initiatives aimed at super-serving them — deepening engagement with avid fans and simultaneously extending the brands and franchises associated with these passionate fans into new areas.”

User experience is becoming a key differentiator; winning in E&M’s slower growth environment is about making the right choices between what consumers want and what technology can enable; and then designing the business models and data systems to energise, amplify and monetise those choices. This is how companies can expand growth through increased ticket sales, subscription fees, licensed merchandise and e-commerce to name a few.