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Italy: Entertainment & Media sector worth €36bn by 2020

Revenues from the Entertainment and Media (E&M) sector in Italy should reach €36 billion by 2020, with a CAGR of 4 per cent, according to a PwC report covering the period 2016-2020.

Of the total, the expense of end-users will reach €26.9 billion (+4.1 per cent in five years), while the remaining €9.1 billion will come from advertising revenue (+3.6 per cent).

Last year, E&M revenue grew by 3.1 per cent on 2014, to €29.6 billion (€22 billion from end users and €7.6 billion from advertising).

Growth is being driven by digital media, with overall digital revenue forecast to move from €12 billion in 2015 to €17.3 billion in 2020, at a 7.7 per cent CAGR.

In the TV segment (+4.6 per cent by 2020), pay-TV is forecast to perform well after several tough years, with a 3.4 per cent CAGR anticipated to 2020, creating €3.6 billion in revenue. This will be possible thanks to growing public interest in streaming services like Netflix, Sky Online, Tim Vision and Premium Play.

In total there were thought to be 700,000 subscribers to SVOD services in Italy in January 2016, with Netflix responsible for 280,000 of them (170,000 of which are in a free trial period).

PwC expects a slow but progressive erosion of the flat subscription model in favour of the PPV model.

In particular, TV advertising has returned to growth after successive years of decline, and prospects for the years ahead are far stronger than before. Internet advertising is going from strength to strength, with growth in mobile ads complementing a mobile Internet penetration rate that is forecast to reach 92.1 per cent in 2020 – the highest in Western Europe.

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