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Global spend on entertainment and media services will reach $2.1 trillion by 2016, from $1.6 trillion in 2011 according to PwC. But the continuing change to digital over physical distribution will mean that growth will come at a slower pace than in previous years — and at a rate slower than that of overall GDP, 5.7 per cent versus 6.6 per cent. PwC says digital spend will generate 67 per cent of E&M spending growth in the next five years.
Digital will continue to cannibalise older formats: OTT and streamed video services are predicted to be worth $11 billion in 2016, overtaking spend for TV subscriptions in 2012.
Other highlights from PwC’s report include:
– Consumer spend will be nearly $1 trillion in 2016 ($966 billion). Video games will be the fastest-growing segment of consumer/end-user spending during the next five years; TV subscriptions and related fees follow. Spend on more analogue services like printed magazines is on the decline.
– Internet access spend will go up to $493 billion in 2016 from $317 billion in 2011. Mobile internet access continues to take wallet share: it accounted for 40 per cent of all Internet access spend, and will go up to 46 per cent by 2016. There are now 1.2 billion people using mobile Internet services; that number will rise to 2.9 billion in 2016. India, it says, is leading the pack on mobile internet growth, growing at over 50 per cent in numbers and 42.4 per cent in value.
– Digital advertising growth is still outstripping that of more traditional formats, although it is still a relatively small portion of overall spend. Through 2016, Internet advertising is growing at a rate of nearly 16 per cent, with video games advertising growing by 11.2 per cent — compared to formats like TV ads (6.6 per cent growth); radio (3.8 per cent) and print segments (less than 3.5 per cent compounded annually).
– China’s Internet advertising market will grow the fastest over the next five years, and will be with $31 billion in 2016, putting it second behind the US.
– Mobile advertising spend will be $24.5 billion in 2016, up from $5.2 billion in 2011.
– The US is currently way ahead of the pack of individual countries when it comes to E&M spend. It accounted for $464 billion in 2011, almost one-third of all spend, with Japan the second-closed at $193 billion. But developing markets, led by Latin America, will continue to see faster growth in the future. The slowest-growing EMEA will remain the biggest overall region in the next five years, with $678 billion in annual spend by 2016.