Global Entertainment & Media Outlook...Global Entertainment & M edia Outlook 9 In terms of...

www.pwc.com/outlook

Global Entertainment & Media Outlook

2018–2022

PwC


2

Perspectives: 2018 Outlook report summary Trending now: convergence, connections and trust


So what’s trending now? Convergence, connections and trust

3

Perspectives report

• The media system is experiencing a third wave of

convergence. Call it Convergence 3.0. Companies

that hail from different starting points are aiming at

business models that revolve around comprehensive

direct-to-consumer relationships

• As they transform, E&M players are building up and

leveraging their connections with users, partners

and other stakeholders to develop new revenue

streams

• The growing power of technology and importance of

data is pushing trust to an even more central focus.

Strong capabilities to build trust with users, improve

value exchange and drive transparency while

ensuring safeguards and protection are vital

differentiators for E&M businesses

Global Entertainment & Media Outlook perspectives


The mobile consumer

Need for new

sources of growth

Value shift to

platforms

Personalization

Ubiquitous connectivity

4

Convergence 3.0: A handful of factors combine, creating the momentum behind this new wave of convergence

Perspectives report

Consumers and their devices are always connected, always on

Mobile devices are becoming the primary

means of accessing E&M

content and services

Revenue streams that

nourished companies in the past

will not be flowing with the same

force

Platforms rather than publishers are the primary

beneficiaries of users’ growth in time and spending

Data analytics and technology that can

support better decision-

making are critical to

success Convergence

3.0

Drivers of convergence

PwC


5

Overview: Global E&M macro trends Global summary and macro trends

Global Entertainment & Media Outlook 6

The Global E&M industry is growing at a pace close to its historical rates - even amid significant disruption….

Global summary and macro trends

Source: PwC Global Entertainment & Media Outlook 2018-2022, www.pwc.com/outlook

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2.5

2013 2014 2015 2016 2017 2018 2019 2020 2021 2022

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… and a dizzying array of different trends at the segment and territory levels, an accumulation of near-infinite micro stories

Global E&M revenue and nominal growth forecast for next 5 years*

Historical Forecast

Note: All figures are reported in nominal terms reflecting actual spending transactions and therefore include the effects of inflation


And final pieces fall into place for a mobile-first world, with the symbolic tipping point occurring in 2020

Global summary and macro trends


-

100,000

200,000

300,000

400,000

500,000

600,000

700,000

2013 2014 2015 2016 2017 2018 2019 2020 2021 2022

Fixed broadband data consumption Smartphone data consumption

18.8%

2017--22

CAGR

33.3%

2017--22

CAGR

Fixed broadband data consumption

Smartphone data consumption

India achieved this tipping point in 2016 itself; Smartphone data consumption growing at a CAGR of 90.4% for 2017 - 2022

Global fixed broadband vs. smartphone data consumption (billion MB)

Smartphone data consumption overtakes fixed


-5 0 5 10 15 20 25 30 35 40 45

Newspaper

Magazines

Traditional TV and home video

Books

TV advertising

Business-to-business

Music, radio and podcasts

Out-of-home

Cinema

Internet access

Video games and e-sports

Internet advertising

OTT

VR

2017-2022 CAGR %

8

Looking across segments, the fastest growth will be in digitally driven segments, with virtual reality leading the way

Segment CAGR 2017 - 2022

Global summary and macro trends: segments


VR revenue includes consumer spending on VR

video, games and apps.


In terms of individual segment market size, Internet access again tops the chart with the largest % of global E&M revenue


Global summary and macro trends: segments

Segment 2016 2017 2018 forecast

Internet access 25.5% 26.2% 26.8%

Traditional TV and home video 13.6% 13.0% 12.3%

Internet advertising 9.9% 11.1% 11.9%

Business-to-business 9.6% 9.4% 9.1%

TV advertising 8.8% 8.3% 8.1%

Newspaper 6.4% 5.9% 5.5%

Books 6.0% 5.8% 5.6%

Video games and e-sports 4.9% 5.2% 5.5%

Music, radio and podcasts 4.8% 4.7% 4.7%

Magazines 4.8% 4.6% 4.3%

Cinema 2.1% 2.1% 2.1%

Out-of-home 1.9% 1.8% 1.8%

OTT 1.6% 1.8% 1.9%

VR 0.0% 0.2% 0.4%

Share of E&M 2017 revenue by segment

Note: 2017 is the latest available data. 2018-2022 values are forecast projections


USA

Canada

Austria

Belgium

Denmark

Finland

France

Germany

Greece

Ireland

Italy

Netherlands

Norway

Portugal

Spain

Sweden

Switzerland

UK

Czech Republic

Hungary

Poland

Romania

Russia

Turkey

Israel Saudi Arabia

UAE

Rest of MENA

Nigeria Kenya

South Africa

Argentina

Brazil

Chile

Colombia

Mexico

Peru

Australia

China

Hong Kong

India

Indonesia

Japan

Malaysia New Zealand

Pakistan

Philippines

Singapore

South Korea

Taiwan Thailand

Vietnam

1

10

100

1000

0 0.02 0.04 0.06 0.08 0.1 0.12

To

tal E

&M

re

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02

2 (

$b

n U

SD

)

CAGR 2017-22 (%)

10

Looking across territories, there are relatively few markets that are both large and fast growing

Quadrant of total E&M revenue (excluding Internet access)

Global summary and macro trends: territories


The effect of Internet access revenue is more apparent in the fastest growing E&M territories

• India is the fastest growing market (excluding internet access)

• The distribution of markets is indicative of the increasing difficulty of finding lucrative investment opportunities in the global media market

• Conditions in territories like China, India, Russia and Indonesia create unique challenges for investors

Key takeaways


All segments in India are growing faster than Global; India one of the fastest growing territories at a CAGR of 11.7% through 2022

E&M segment CAGR 2017-2022: Global, India

Segment overview: India v/s Global summary


-5 5 15 25 35 45 55 65 75

Newspaper

Magazines


Books

TV advertising

B2B


OOH

Cinema

Internet access



OTT

Data consumption (in bn MB)

2017-2022 CAGR Global India

• Fastest growing segments in India are Data Consumption (non-revenue), OTT and Internet Advertising

• Newspapers in India continue to showcase positive growth over the Outlook period as opposed to Global

• E-sports is a promising sub-segment with a high CAGR of 56.6% over the Outlook period

Key takeaways


Traditional TV and video continues to hold the largest share in Indian E&M market in terms of revenue

2017 E&M market share by segment: Global, India (%, USD mn)

Segment overview: India v/s Global summary


0% 5% 10% 15% 20% 25% 30% 35%

Internet access

B2B

OOH

TV advertising


VR


Cinema

OTT



Newspaper

Magazines

Books

Global India

• While OTT happens to be one of the fastest growing segments, Traditional TV and home video will still hold the largest share of the Indian E&M market throughout the Outlook period

• India will be amongst top 10 Video games countries with respect to revenue by 2022

Key takeaways 2382

258

3893

775

9281

297

1785

609

0

958

4033

416

1245

4901

PwC


Segment Insights



Deep dive: OTT video

OTT video comprises consumer spending on video accessed via an over-the-top /streaming service

OTT video

Transactional video on

demand (TVOD) services

(such as iTunes), that

deliver filmed

entertainment content via

the open Internet and

which do not require a

subscription

Stand-alone subscription

video on demand (SVOD)

services delivered over the

open Internet, such as

Netflix

SVOD

TVOD


Deep dive: OTT video


India will be amongst Top 10 highest CAGR SVOD

countries

Top 10 SVOD countries 2017 US

China

Japan

UK

Canada

Germany

Sweden

South Korea

Brazil

Mexico

Countries on both lists

South Korea

Top 10 countries with highest SVOD CAGR 2017-2022 Indonesia

Philippines

India

Kenya

South Korea

Malaysia

Egypt

South Africa

Portugal

Spain

Top 10 SVOD countries by revenue 2017

SVOD top countries by 2017 revenue and growth 2017-2022

Top 10 SVOD countries by CAGR 2017-2022



While global newspaper revenue will continue to decline at -2.4% CAGR through 2022, India showcases positive growth

Segment revenue 2013-2022: Global, India

Segment overview: newspapers

• The global news industry continues to respond to the ongoing product devaluation, despite overall consumption growth

• Globally, future shrinkage is expected to improve slightly, as digital monetization improves, resulting in -2.4% CAGR

Regional revenue and growth: 2017 global revenue $119bn USD


• Indian newspaper revenue to grow at 4.4% CAGR

• Expanding literacy rates, rural economic growth, successful coverage in regional news titles and ongoing low cover prices are all driving the popularity of print in India

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India RoW

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CA

GR

2017 Growth

Size proportional to revenue



India in Top 10 video games territories with respect to CAGR as well as revenue by 2022

Top 10 video game countries by revenue 2022

China

US

Japan

South Korea

UK

Germany

France

Russia

Italy

India


India Russia

Top 10 countries with highest video game CAGR 2017-2022 India

Turkey

Pakistan

UAE

Indonesia

Thailand

Argentina

Saudi Arabia

Russia

Romania

Top 10 video games countries by revenue 2017

Video games top countries by 2022 revenue and growth 2017-2022

Top 10 video games countries by CAGR 2017-2022


Deep dive: video games and e-sports

pwc.com/outlook

This publication has been prepared for general guidance on matters of interest only, and does not constitute professional advice. You should not act upon the information contained in this publication without obtaining specific professional advice. No representation or warranty (express or implied) is given as to the accuracy or completeness of the information contained in this publication, and, to the extent permitted by law, PwC does not accept or assume any liability, responsibility or duty of care for any consequences of you or anyone else acting, or refraining to act, in reliance on the information contained in this publication or for any decision based on it.

© 2017 PwC. All rights reserved. PwC refers to the PwC network and/or one or more of its member firms, each of which is a separate legal entity. Please see www.pwc.com/structure for further details.

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