Become a super agency
To pinpoint value opportunities, companies need to understand the forces at play at a local level
Worldwide entertainment and media revenues will rise at a compound annual growth rate of 4.4% in the next five years, but are down from last year’s 5.5%.
PwC’s Global Entertainment & Media Outlook 2016-2020 says revenues will rise from US$1.72 trillion in 2015 to $2.14 trillion in 2020. Entertainment and media still remains a “dynamic, diverse industry with steady and sustainable growth”.
In 36 out of the 54 countries surveyed, entertainment and media spending is growing more rapidly than GDP, often by a factor of over 50%. Many populous entertainment and media markets, including Brazil, Pakistan, and Nigeria, are likely to produce higher entertainment and media growth rates.
SA is not highlighted for exceptional revenue growth.
Global Internet advertising is expected to grow at just over 11%, while magazine and newspaper publishing will continue to suffer declines.
Deborah Bothun, PwC global entertainment and media leader, says: “Entertainment and media companies are facing an evermore complex global environment in which every market has its own unique growth dynamics, shaped by local factors ranging from demographics to content tastes to infrastructure to regulation. To pinpoint value opportunities, companies need a more intimate understanding of the forces at play at a local level.”
The report finds “an almost perfect correlation between the relative size of the under-35 population and growth in entertainment and media spending.”
A second shift is the growing power of content. “In a world where Netflix can launch in 130 new countries in a single day, it’s easy to assume content is becoming more globally homogeneous. But in reality content is being redefined by forces of globalisation and localisation simultaneously.”
A third trend is the ability of consumers to design and curate their own media diet. “As takeup of these new-style bundles grows, [the] bulk of digital massmarket services will gradually become aggregated offerings.”
Developing markets are becoming more attractive. “The dynamics are shifting rapidly as disruption pushes markets to develop in different ways, meaning economies within the same region can display significantly varied growth patterns.”
It is pointed out that today’s entertainment and media market includes technology companies racing to become hybrid content companies, and traditional publishers evolving the other way to emerge as hybrid technology firms. This underlines how the growth of technology and digitisation is acting as a “centripetal force” breaking up existing relationships. Ad agencies should use new media shifts to reorient themselves to become invaluable to markets by bringing together programmatic capabilities, analytics, data aggregation, and native content to create a “new super agency”.