GLOBAL ENTERTAINMENT AND MEDIA OUTLOOK 2018-2022 - GLOBAL AND RUSSIAN MARKETS: KEY TRENDS AND OUTLOOKS - PWC
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Global Entertainment and Media Outlook
2018-2022
Expert opinions
Vyacheslav Nikolaev
Global and Russian markets: Artem Pulikov
Key trends and outlooks Mikhail Voshchinsky
Vadim Vereshchagin
Oleg Tumanov
CONTENTS
9
STEADY GROWTH
Development trends in
Russia's entertainment and
media industry
CREATIVE INTELLIGENCE
AI: The new business reality
NEW ROUND OF
DEVELOPMENT
Entertainment and media:
Global trends
9
METHODOLOGY
Detailed calculation
methodology for all
segments
9
KEY SEGMENTS
Russia’s 2018
entertainment and media
outlook
19 Internet access
21 TV advertising
23 Internet advertising
27 Cinema
31 OTT video EXPERT OPINIONS
Vyacheslav Nikolaev (13)
35 Video games and e-sports
Artem Pulikov (17)
Mikhail Voshchinsky (25)
37 Virtual reality (VR)
Vadim Vereshchagin (29)
Oleg Tumanov (33)
NEW ROUND OF DEVELOPMENT
The entertainment and media market is entering a new phase of
development. The lines that once separated the entertainment and
media, technology and telecoms industries are becoming more and more
blurred. Major content producers have become vertically aligned and
integrated with distribution platforms that allow them to access end
customers more efficiently, and Internet and telecoms giants are starting
to create content and build local integrated ecosystems. The distinctions
between segments are blurring, such as the distinctions between print
and digital; video games and sports; terrestrial, cable and online TV;
and social and traditional media.
KEY DRIVERS OF THE NEW ECOSYSTEM
2018
The first year when global
revenue from mobile Internet
advertising will surpass its
traditional equivalent.
3
Media Outlook | 2018
The distinctions between segments
are blurring, such as the distinctions
between print and digital; video games
and sports; terrestrial, cable and online
TV; and social and traditional media
IN THE EVOLUTION OF
ENTERTAINMENT AND MEDIA,
TRADITIONAL BUSINESS
MODELS ARE BEING
REINVENTED SO THAT
COMPANIES CAN TAP INTO
NEW REVENUE STREAMS AND
CREATE MARKET RELEVANCE
AT SCALE.
PwC 4
NEW ROUND OF DEVELOPMENT
Three types of industry
development
ENTERTAINMENT AND MEDIA COMPANIES:
THREE KEY WAYS TO TRANSFORM
These three strategies are interrelated areas of development
for achieving a company’s key goals of robust financial
performance and maximum audience coverage. To be
successful, companies should focus on all three areas.
5
Media Outlook | 2018
Continuing revenue growth...
…but with stark differences
among segments…
...and countries
PwC 6
NEW ROUND OF DEVELOPMENT 7
Media Outlook | 2018
COMPOUND ANNUAL GROWTH RATES BY COUNTRY, 2017-2022
Нигерия
Nigeria 21,0%
Египет
Egypt 17,1%
Индия
India 11,6%
Кения
Kenia 10,3%
Индонезия
Indonesia 8,8%
Россия
Russia 8,8%
Пакистан
Pakistan 8,8%
Вьетнам
Vietnam 8,1%
Филиппины
Philippines 8,1%
Турция
Turkish 7,9%
Саудовская
SaudiАравия
Arabia 7,6%
Румыния
Romania 7,3%
Аргентина
Argentina 7,2%
Китай
China 7,2%
ОАЭ
UAE 7,1%
Тайланд
Thailand 6,5%
Перу
Peru 6,4%
Южная
SouthАфрика
Africa 6,4%
Греция
Greece 6,4%
Чили
Chile 6,2%
Польша
Poland 6,1%
Южная Корея 5,9%
SouthМексика
Korea 5,7%
Малайзия
Mexico 5,6%
Колумбия
Columbia 5,6%
Чехия
Czech Republic 5,4%
Бразилия
Brazil 5,3%
Венгрия
Hungry 4,6%
Италия
Italy 4,3%
Португалия
Portugal 4,3%
Швеция
Sweden 4,0%
Австралия
Australia 3,8%
Канада
Canada 3,7%
Сингапур
Singapore 3,6%
Испания
Spain 3,5%
Нидерланды
Netherlands 3,5%
США
USA 3,5%
Ирландия
Ireland 3,5%
Великобритания
Great Brittan 3,2%
Израиль
Israel 3,1%
Новая
NewЗеландия
Zealand 2,9%
Тайвань
Taiwan 2,8%
Швейцария
Switzerland 2,8%
Дания
Denmark 2,7%
Норвегия
Norway 2,7%
Бельгия
Belgium 2,6%
Финляндия
Finland 2,6%
Япония
Japan 2,3%
Франция
France 2,2%
Hong Гонконг
Kong 2,2%
Австрия
Austria 2,2%
Германия
Germany 2,0%
PwC 8
STEADY GROWTH
In 2017, the entertainment and media industry in Russia continued to show strong growth,
with an upward trend expected through 2018 and over the next several years. The positive
trend was facilitated by the sustainable trajectory of growth achieved by the Russian economy,
for one, and by the 2018 FIFA World Cup, a large-scale sporting event hosted by Russia.
Convergence
The media industry is one of the few
in which consumers, tempted by
emerging technologies, tend to
quickly change their behaviour and
preferences
9Media Outlook | 2018
Innovative technologies and personalisation
THE DATA FROM 2017 SHOW THAT
THE SIZE OF RUSSIA’S
ENTERTAINMENT AND MEDIA
INDUSTRY WAS USD 22BN,
EXCEEDING THE 2016 MARKET SIZE
BY 11%. WE EXPECT THAT THE
MARKET WILL CONTINUE TO GROW
AT THIS RATE AND SURPASS USD
24BN IN 2018.
LOOKING FIVE YEARS AHEAD, WE
PREDICT THAT THE MEDIA MARKET
WILL DEMONSTRATE A CAGR OF
8.8%, WHICH IS TWICE THE GLOBAL
RATE, AND THE TOTAL VOLUME OF
THE RUSSIAN MEDIA INDUSTRY
WILL EXCEED USD 33BN
PwC 10STEADY GROWTH
USD
6.5bn
Internet access will be
the leader among all
segments, accounting
for 30% of the total
volume.
11E-sports 10
Virtual reality 22
2017
Radio 264
Predictions for 2022
OTT video 175
Out-of-home
advertising 628
Magazines 652
Music
643
Cinema 942
Business-to-business
1,320
(B2B)
Books 1,423
TV advertising 2,912
RUSSIA’S ENTERTAINMENT AND MEDIA REVENUE IN 2017 AND 2022 (USD M)
Video games 2,268
Internet advertising 2,665
Internet access 6,549
PwC
Media Outlook | 2018
12STEADY GROWTH
EXPERT OPINION
Telecoms market development
vectors
Vyacheslav
Nikolaev
“
13Media Outlook | 2018
From telecoms to entertainment
ANY TOOL MUST BE THE
MOST CONVENIENT…
WITH AN ATTRACTIVE
OFFERING, THE
OPERATOR MAY ONLY
GAIN A LITTLE, BUT THEY
DO GAIN AN ADVANTAGE
The services ecosystem
and a personalised approach
PwC 14CREATIVE INTELLIGENCE
Artificial intelligence (AI) is a new suite of technologies
capable of performing tasks that usually require human
intelligence, e.g. speech recognition, decision-making or
learning. AI is being rapidly adopted as the business reality
for many global industries. Its role in the entertainment and
media industry is remarkable.
Technology adoption
15Media Outlook | 2018
Complete automation through Human resources and
AI only AI technology
Consumer-centred Optimisation of content Enhancing the customer
innovation creation experience
• Music produced by AI • Tracking exercise
• Filmmaking based on the (e.g. improved workout
Facebook newsfeed performance and developing
a workout schedule)
• Image gallery made in Google’s
facial recognition system • Capabilities of interactive content
(e.g. asking customers to fill out
• Filmmaking based on Google a short questionnaire after
photos viewing a video to rank the
quality of a service/product)
• Recommendations
(e.g. TV, films and music)
• Content tracking
(e.g. Spotify playlists)
• Interactive assistants
(e.g. Alexa)
Optimised internal Reduction of repetitive Enhanced and more creative
processes tasks solutions
• Automation of customer support • Strengthening sales performance
• Automation of credit • Maximising revenue from films
management • Maximising sales of content
• Predictive technologies for licences
analysing customer outflow • Reduced regulatory risks
• Media planning and buying • Tracking and grouping comments
• Tracking, creating • Video content analytics
and distributing newsfeeds
• Social media analytics
• Creating content tags
• Editing content (e.g. film trailers)
• Developing sports recaps
• Music for films and music libraries
produced using AI
PwC 16KEY SEGMENTS
EXPERT OPINION
Artem Pulikov
“
17Media Outlook | 2018
Moving up
Apparent symbiosis
PwC 18KEY SEGMENTS
INTERNET ACCESS
Most Russian operators cite
similar trends: the steady
growth in the mobile data
used, increased activity in the
segment of products based on
fixed-mobile convergence
(FMC) and the growth of the
fixed broadband access and
pay TV segments.
19Media Outlook | 2018
Networks and upgrades
5G infrastructure
Mobile Internet revenue will grow
strongly in line with increased data
usage.
PwC 20KEY SEGMENTS
TV ADVERTISING
The Russian economy is closely linked to the performance
of the TV advertising market, and a recession in 2015 saw
a 13.7% decline in expenditures on TV advertising. However,
this segment has proved resilient and is again experiencing
strong rates of growth.
21Media Outlook | 2018
2018 FIFA World Cup in Russia
National Advertising Alliance
12.3%
Projected growth in TV advertising for
2018, due in particular to the impact of
Russia hosting the FIFA World Cup.
PwC 22KEY SEGMENTS
INTERNET ADVERTISING
Russia’s Internet advertising market is the largest in Central and Eastern Europe, totalling USD
2.7bn in 2017. It is one of the fastest-growing markets and is expected to increase at a CAGR of
15% through 2022, when revenues will hit USD 5.4bn.
23Media Outlook | 2018
Mobile advertising
Display advertising
PwC 24KEY SEGMENTS
EXPERT OPINION
Internet versus TV
Mikhail
Voshchinsky
“
25Media Outlook | 2018
Partnerships, emerging
technology and content
Big data,
big opportunities
ONE DATA SOURCE IS NOT
ENOUGH TO RUN AN EFFECTIVE
ADVERTISING CAMPAIGN.
PwC 26KEY SEGMENTS
CINEMA
The Russian cinema sector remains heavily dependent on
Hollywood for revenue. Of the top 20 films at the box office in
2017, 16 were American. In 2016, the market saw a similar
situation, with an even larger number of Hollywood films (18)
in the top 20.
WE EXPECT THAT TOTAL CINEMA
REVENUE WILL GROW TO USD 1.2BN
BY 2022, UP FROM USD 942M IN 2017.
USD
USD
942m 1.2bn
2017 2022
27Media Outlook | 2018
Russian tastes
PwC 28KEY SEGMENTS
EXPERT OPINION
“It is the story that counts”
THE VIEWER GOES TO THE CINEMA
FOR AN EMOTIONAL EXPERIENCE THAT
ONLY THE CINEMA CAN PROVIDE;
IT SHOULD BE A HUMAN INTEREST STORY,
NOT A RETELLING OF AN EVENT
29Media Outlook | 2018
Vadim
Vereshchagin
The Central Partnership film
production company
was established in 1996.
“
It is part of the Gazprom-Media
Group and it is an
exclusive distributor
of Hollywood Paramount
Pictures and Lionsgate/
Summit Entertainment films in Russia and the CIS.
The company owns one of Russia’s biggest copyright
libraries. In 2017, Central Partnership films grossed
over RUB 70bn at the box office, with domestic projects
accounting for 30% of its revenue.
Crossing borders:
E-sports in cinema
PwC 30KEY SEGMENTS
OTT VIDEO
In Russia, the growth of the OTT video market has been limited
since the issue of piracy remains unsolved.
31Media Outlook | 2018
USD 175
Russia’s OTT video market
m
in 2017
PwC 32KEY SEGMENTS
EXPERT OPINION
Oleg
Tumanov
“
33Media Outlook | 2018
Different screens, different
methods of monetisation
Tell me who you are, and I will tell
you what you consume
PwC 34KEY SEGMENTS
VIDEO GAMES AND E-SPORTS
In 2017, video games and e-sports grossed up to USD 2.2bn in
box office revenues in the Russian market, an increase of USD
1bn from 2013. In 2022, the market is expected to be worth
USD 4.8bn, with an average annual growth rate of 16.3%.
Traditional video games
USD 10m
Aggregate revenue
of e-sports in Russia
in 2017
35Media Outlook | 2018
é
PwC 36KEY SEGMENTS
VIRTUAL REALITY (VR)
Consumer interest in VR video and VR gaming will ensure
that the Russian VR segment grows at a CAGR of 51.3% over
the next five years. By 2022, the total revenue for the VR
market is expected to reach USD 178m. It is interesting to
note that by 2022, video market revenue will exceed gaming
revenue, despite the fact that gaming has a head-start on
video.
37Media Outlook | 2018
VR gadgets are expected
7m to be in use in Russia by 2022.
By 2022, 7m VR gadgets will be
in use in Russia, with 3.3m of them
representing the latest and most
user-friendly portable headsets.
PwC 38METHODOLOGY
Detailed calculation
methodology for all segments
The Global Entertainment and Media Outlook 2018-2022
provides insights into the industry’s main trends and figures. The
market falls into 15 main segments that are analysed in detail in
this report.
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39Media Outlook | 2018
PwC 40METHODOLOGY
SEGMENT DEFINITIONS
The final figures provided in charts and graphs may differ
from the mathematically determined final values due to
rounding up.
Internet advertising This segment comprises spending by advertisers media and email) are also included under this
either through a wired Internet connection or through category, but video advertising, searches and
mobile devices. The revenue relates to the provision classifieds are excluded. Classified ads are Internet
of digital services and includes spending on advertisements containing a list of products or
advertising. Internet advertising, in general, refers to services by categories. An advertiser pays a fee to
online TV advertising, ads in newspapers, consumer display an ad or a list of products/services around a
and professional magazines and directories, and specific vertical such as automotive, recruiting or real
online radio advertising (for North America only). estate. Video Internet advertising comprises revenue
Wired Internet advertising falls into the following from in-stream video advertising (e.g. pre-rolls, mid-
categories: paid searches, banners/displays, and rolls and post-rolls) only. It does not include in-
classified and video formats. The total advertising stream banner-display advertising or out-of-stream
figures eliminate any double counting. Search video advertising. Online video advertising generates
Internet advertising involves placing ads on web revenue both from advertising placed by traditional
pages that show the results of search engine queries broadcasting companies and from ads on websites
(e.g. Google AdWords). Banner Internet advertising such as YouTube. Mobile Internet advertising
generates revenue from traditional ads placed on comprises all advertising delivered to mobile gadgets
web pages in many forms, including banner ads. through formats designed for specific devices. This
Other Internet advertising formats (e.g. affiliates, rich revenue is considered digital.
Pay TV This segment comprises consumer spending on The revenue comprises the sell-through and rental of
basic and premium TV subscriptions, and consumer physical home videos, and subscription and
spending on public TV licence fees (when applicable) transactional revenues from electronic home video.
and home video. Consumer spending on basic and The revenue from physical home videos is split
premium subscriptions includes Video on Demand between rentals and the sell-through of video
(VOD) and pay per view (PPV) accessed from cable formats. It is formed from consumer spending on
operators, satellite providers, telephone companies films, TV programmes and other video content on
and other multichannel distributors. For subscription DVDs and Blu-ray media. The revenue is formed
TV household estimates, only data on primary TV from all consumer spending on products, both retail
subscriptions by household were considered. Home and online. Rental revenue comprises spending on
video includes both electronic and physical home rentals of videos at video stores and other retail
video of films, TV programmes and other video outlets, along with DVDs or Blu-ray discs distributed
content. by mail services.
41Media Outlook | 2018
OTT video This segment comprises consumer spending on OTT with conventional pay TV services (e.g. Sky’s Go or
video services and video streaming services (e.g. Comcast’s Xfinity).
Netflix). TVOD services (such as iTunes) deliver filmed
OTT video revenue comprises revenue from stand- entertainment content through the open Internet and
alone services such as Netflix, whose filmed do not require a subscription. SVOD services (such
entertainment content is accessed through a as Netflix) are also delivered over the Internet but
broadband or wireless Internet connection and is require a subscription.
viewable on a PC, TV, tablet, smartphone or other
device that bypasses TV subscription providers.
These services are split between transactional video
on demand (TVOD) and subscription video on
demand (SVOD). Note that this category also
includes revenue from stand-alone operator OTT
services, such as MTG's Viaplay or Sky's Now,
neither of which require a subscription to a core TV
service but do exclude revenue from "TV
Everywhere" operator packages that bundle OTT
Internet access This segment comprises spending on access to the dongles and data cards. App downloads refer to any
Internet and is split into two categories: mobile applications that are downloaded from an app store
Internet and fixed broadband. Fixed broadband either for free or for a fee, and that are installed on
Internet access includes both wired and wireless connected devices such as smartphones, tablets
connections. The revenue from providing such and smart TVs.
access comes from subscriptions to residential or
business Internet access services delivered to a
home, office or any other location. Access is
provided by cable, MMDS modem, xDSL, FTTx,
WiMAX, proprietary wireless broadband, Ethernet,
power line communications and satellite broadband
technologies. Mobile Internet comprises Internet
access over the medium of cellular air interfaces,
generally through a 2.5G network or higher. This
covers Internet access through mobile devices and
connected devices that use embedded modems,
Video games and e-sports This segment generates revenue from consumer dynamic advertising inserted into or displayed
spending on video-game software and related alongside the game in an app or browser during
services (not hardware or devices) for both gameplay.
traditional and social/casual gaming, as well as from E-sports comprises consumer and advertiser
advertising through video games. The revenue spending on e-sports, which are defined as
includes spending by both consumers and organised video-gaming competitions, both online
advertisers on e-sports. and offline, from one-off events to organised
Traditional gaming comprises revenues associated leagues.
with playing games on PCs and gaming consoles Streaming advertising is advertising revenue spent
(both TV-connected and portable). This includes on e-sports events streamed on websites (e.g.
sales of physical (disc-based) games at retail stores Twitch). This is distinct from the advertising revenue
(both brick-and-mortar and online retailers), sales of associated with the general streaming of video
digital games (including Steam, Good Old Games games from such platforms (e.g. Minecraft videos),
and Origin for PCs, as well as the PlayStation Store, which is not covered.
Xbox Games Store and Nintendo eShop for
consoles), additional downloadable content (DLC) Sponsorship revenue is the revenue from the
and subscription services. Online/micro-transaction sponsorship of organised e-sports competitions,
revenue also includes spending associated with free- (e.g. Snickers’ sponsorship of the ELEAGUE) and of
to-play massively multiplayer online games (MMOs) individual teams.
but does not include spending on social/casual Consumer ticket sales is revenue from consumers
browser-based games, which are included in the spent on tickets to physically attend e-sports events.
social/casual gaming component.
Consumer contribution is revenue that consumers
Social/casual gaming revenues include consumer spend on compendiums for e-sports events, or battle
spending on and in app-based games on tablets and passes (e.g. the International Battle Pass) for
smartphones, and browser games aimed at a casual virtually attending e-sports events. Spending must
audience (e.g. Ruzzle and Zynga’s Words with count towards an organised e-sports event, and is
Friends). This includes revenues associated with the therefore distinct from regular spending on games
purchase of social/casual gaming apps, subscription such as League Of Legends.
services for social/casual games and the purchase
Media rights revenue is revenue from spending by
of virtual items within social/casual games. This also
broadcasters and streaming companies for the rights
includes revenues associated with “hardcore” mobile
to show e-sports events.
games (e.g. Infinity Blade 2).
Excluded from the definition are the sale of
Advertising revenue from video games includes only
merchandise at events, and e-sports betting
static advertising in video games. It does not include
revenue.
PwC 42METHODOLOGY
SEGMENT DEFINITIONS
The final figures provided in charts and graphs may differ
from the mathematically determined final values due to
rounding up.
TV advertising This segment comprises all TV advertising revenue, traditional, core and over-the-air TV channels.
including broadcast and online. Broadcast television
covers all advertising revenue generated by free-to-
air networks (terrestrial) and pay TV operators
(multichannel). Online TV advertising consists of in-
stream ads around TV content delivered by such
websites. This includes revenues from pre-roll, mid-
roll and post-roll ads around TV content distributed
by broadcaster-owned websites. Multichannel
includes non-core network advertising revenue
generated through pay TV networks (e.g. cable,
digital terrestrial television [DTT], Internet Protocol
Television [IPTV] or satellite), including revenue from
free-to-air spin-off digital channels launched by core
terrestrial networks. This revenue is considered non-
digital. Terrestrial covers advertising sold on
Business-to-business This segment comprises business-to-business advertising and circulation revenue from magazines
media, which comprises business information, aimed at a professional audience. This segment
directory advertising, trade magazines, professional comprises the spending on advertising in both
books and trade shows. Business information traditional print and digital online magazines, either
includes spending on business-focused data and directly through a magazine website or discretely
intelligence, and it is split into three separate through digital editions of magazines that are
categories: financial, marketing and industry. distributed directly to a connected device such as a
Financial includes securities and economic credit PC or tablet. Circulation revenue comprises
data; marketing includes sales and survey research, spending by readers on printed trade magazines,
mailing lists and demographic databases; and including single copies direct from retail outlets or
industry includes data and content covering market through subscriptions. Professional books are those
share information and competitor intelligence. This targeted at professional users (e.g. legal publishing).
revenue is both digital and non-digital, and is This segment comprises the revenue generated by
considered consumer spending. Directory sales across both print (including audio) and digital
advertising covers the spending on advertising in editions. Trade shows take into account revenue
both print and digital editions of directories such as from spending by businesses on exhibitions at trade
the Yellow Pages. This revenue is both digital and shows. It does not include any sponsorship of
non-digital, and it is considered spending on events.
advertising. Trade magazines comprise both
Cinema This segment comprises cinema revenue (including revenue is non-digital, and it is from both consumer
box office and advertising). Cinema revenue and advertising spending.
comprises consumer spending at the box office for
theatrical motion pictures and the spending on
advertising at the cinema, including on-screen
advertisements prior to films. It does not include any
revenue from merchandise or concessions. This
Books This segment comprises revenue generated from the bought by schools, government agencies and
sale of consumer books (i.e. bought by consumers students for educational use. Professional books are
for personal use), educational books (i.e. bought by those targeted at professional users (e.g. legal
consumers or institutions for educational use) and publishing).
professional books (i.e. targeted at professional
users, such as legal publishing), including both print
and electronic editions. Educational books are those
43Media Outlook | 2018
Music This segment comprises consumer spending on included along with sponsorship revenues. This
music, including both physical and digital recordings, comprises non-digital revenue that is generated from
as well as live music played at concerts. This also both consumer and advertising spending.
includes revenue from sponsoring live music events. Revenue from advertising on radio stations and radio
The recorded music component comprises both networks is tracked as the net of agency
physical and digital recordings. All consumer commissions, production costs and discounts.
spending is measured at the retail level, which can
be substantially higher than the wholesale or trade
value revenues sometimes reported. Streaming
comprises revenue from subscription and advertiser-
supported streaming services. Note that service
providers do not break this revenue down into
consumer and advertising components. Downloads
includes revenues from any licenced recorded music
downloaded through app stores or licenced services
(e.g. iTunes). Mobile music refers to the purchase of
ringtones and ring-back tones only. Revenues from
music services that are delivered wirelessly to
connected devices are considered digital. The total
number of music units sold at the retail level, both
physical and digital, includes single tracks, albums
and music videos.
For live music, consumer spending on tickets is
Magazines This segment comprises revenue from both digitally. Magazines published under contract
consumer-focused and trade magazines (i.e. (customer magazines/contract or custom publishing)
magazines aimed at a professional audience) are included within the print advertising section. The
generated from both circulation and advertising. licencing of merchandise is not included in this
Circulation revenue for both consumer and trade segment.
magazines comprises spending by readers on either
single sales from retail outlets or through
subscriptions in print, as well as through downloads
of individual copies or subscriptions delivered
Newspapers This segment comprises revenue from both digital, and is generated by both consumers and
circulation (consumer spending on newspapers) and spending on advertising.
advertising in newspapers, and it takes both physical
print editions and digital editions into consideration. It
includes revenue from spending on advertising in
free dailies. This revenue is both digital and non-
Out-of-home ads The out-of-home (OOH) advertising market consists digital.
of spending on advertisements in out-of-home media
(both traditional and digital). OOH comprises the
total spending by advertisers on all formats of out-of-
home media, and it is split between the physical and
Virtual reality (VR) Virtual reality (VR) refers to a head-mounted system VR app revenue comprises consumer spending on
that immerses a wearer in a stereoscopic, wholly apps for VR headsets beyond those (usually free)
virtual environment, or a scene where they can look apps provided by platform holders for VR gaming
around and optionally move and interact. This and VR video.
segment comprises consumer spending on VR
videos, VR games and VR apps.
VR video revenue comprises revenue from
subscription top-ups, streaming fees, electronic sell-
through (EST) and physical purchases.
VR gaming comprises revenue from free-to-
play/micro-transactions, subscription top-ups, digital
transactions and physical purchases.
PwC 44APPENDIX
CAGR BY COUNTRY AND SEGMENT, 2017-2022
TV advertising
Russia US Germany China India Indonesia Japan
Segment revenue, 2017
2,912 70,100 5,369 13,502 4,033 4,615 13,207
(USD m)
Segment revenue, 2022
3,908 74,862 6,013 14,032 6,858 7,096 14,480
(USD m)
CAGR (%) 6.1% 1.3% 2.3% 0.8% 11.2% 9% 1.9%
B2B
Segment revenue, 2017
1,320 91,119 17,451 9,346 1,215 520 8,335
(USD m)
Segment revenue, 2022
1,495 106,761 19,374 11,382 1,770 715 8,885
(USD m)
CAGR (%) 2.5% 3.2% 2.1% 4% 7.3% 6.6% 1.3%
Cinema
Segment revenue, 2017
942 11,203 1,276 8,945 1,785 335 2,049
(USD m)
Segment revenue, 2022
1,207 12,274 1,351 14,183 2,802 472 2,250
(USD m)
CAGR (%) 5.1% 1.8% 1.2% 9.7% 9.4% 7.1% 1.9%
Books
Segment revenue, 2017
1,423 36,827 10,324 14,917 2,382 440 11,086
(USD m)
Segment revenue, 2022
1,517 40,177 10,374 17,674 3,144 454 11,513
(USD m)
CAGR (%) 1.3% 1.8% 0.1% 3.5% 5.7% 0.6% 0.8%
45Media Outlook | 2018
Music
Russia US Germany China India Indonesia Japan
Segment revenue, 2017
643 18,726 4,091 581 344 207 6,132
(USD m)
Segment revenue, 2022
834 25,317 4,401 1,128 763 462 6,229
(USD m)
CAGR (%) 5.3% 6.2% 1.5% 14.2% 17.3% 17.5% 0.3%
Magazines
Segment revenue, 2017
652 30,206 5,903 17,511 258 232 7,910
(USD m)
Segment revenue, 2022
747 28,876 5,431 17,578 283 231 7,488
(USD m)
CAGR (%) 2.8% -0.9% -1.7% 0.1% 1.8% -0.1% -1.1%
Newspapers
Segment revenue, 2017
537 28,955 8,751 10,688 3,893 2,836 14,506
(USD m)
Segment revenue, 2022
407 24,958 8,387 10,031 4,838 2,684 12,375
(USD m)
CAGR (%) -5.4% -2.9% -0.8% -1.3% 4.4% -1.1% -3.1%
Out-of-home ads
Segment revenue, 2017
628 9,645 1,187 6,385 416 279 6,525
(USD m)
Segment revenue, 2022
645 11,533 1,357 9,391 589 396 6,952
(USD m)
CAGR (%) 0.5% 3.6% 2.7% 8% 7.2% 7.3% 1.3%
PwC 46APPENDIX
CAGR BY COUNTRY AND SEGMENT, 2017-2022
Internet advertising Russia US Germany China India Indonesia Japan
Segment revenue, 2017
2,665 88,007 7,864 45,723 958 1,480 12,094
(USD m)
Segment revenue, 2022
5,353 127,387 10,077 80,004 2,029 3,715 15,156
(USD m)
CAGR (%) 15% 7.7% 5.1% 11.8% 16.2% 20.2% 4.6%
Pay TV
Segment revenue, 2017
1,534 98,918 5,840 20,731 9,263 1,013 4,937
(USD m)
Segment revenue, 2022
1,753 92,682 6,533 30,483 15,141 1,331 5,168
(USD m)
CAGR (%) 2.7% -1.3% 2.3% 8% 10.3% 5.6% 0.9%
OTT video
Segment revenue, 2017
175 20,055 958 2,443 297 30 2,401
(USD m)
Segment revenue, 2022
331 30,597 1,495 5,191 823 132 3,878
(USD m)
CAGR (%) 13.6% 8.8% 9.3% 16.3% 22.6% 34.2% 10.1%
Video games
Segment revenue, 2017 2,268 23,269 4,670 19,867 609 455 13,576
(USD m)
Segment revenue, 2022 4,832 28,804 6,075 31,437 2,702 1,004 17,082
(USD m)
CAGR (%) 16.3% 4.4% 5.4% 9.6% 34.7% 17.2% 4,7%
47Media Outlook | 2018
E-sports Russia US Germany China India Indonesia Japan
Segment revenue, 2017
10 184 55 117 2 3 11
(USD m)
Segment revenue, 2022
32 467 113 338 14 15 42
(USD m)
CAGR (%) 25.5% 20.5% 15.3% 23.7% 56.6% 41.2% 31.2%
Radio
Segment revenue, 2017
264 21,739 3,865 2,346 428 115 1,192
(USD m)
Segment revenue, 2022
292 23,424 4,235 2,776 785 140 1,141
(USD m)
CAGR (%) 2% 1.5% 1.8% 3.4% 12.9% 4.1% -0.9%
VR
Segment revenue, 2017
22 1,451 213 728 0 0 407
(USD m)
Segment revenue, 2022
178 7,194 1,003 4,587 0 0 2,859
(USD m)
CAGR (%) 51.3% 37.7% 36.3% 44.5% --- --- 47.7%
Internet access
Segment revenue, 2017
6,549 146,268 17,635 68,115 4,901 2,871 59,698
(USD m)
Segment revenue, 2022
10,846 196,862 20,110 92,470 10,852 4,708 69,753
(USD m)
CAGR (%) 10.6% 6.1% 2.7% 6.3% 17.2% 10.4% 3.2%
PwC 48CONTACTS
You are welcome to discuss the results of the survey with us.
PwC partners
Yury Pukha
Partner, Advisory
Leader, Telecommunications, Utilities, Communication and Entertainment
(TUCE)
Email: yury.pukha@pwc.com
Evgeny Klimenko
Partner, Assurance
Technology, Media and Telecommunications
evgeny.klimenko@ru.pwc.com
Natalia Vozianova
Partner, TLS
Technology, Media and Telecommunications
natalia.vozianova@ru.pwc.com
Authors
Grigory Sidorov
Director, Technology, Media and Telecommunications
grigory.sidorov@pwc.com
Vladimir Lapin
Senior Manager, Technology, Media and Telecommunications
vladimir.lapin@pwc.com
Claudia Chistova
Business Development Manager
claudia.chistova@pwc.com
Viktoria Nosachenko
Senior Marketing Specialist
viktoria.nosachenko@pwc.comContributors:
Global Entertainment and Media Outlook online data source By subscribing to the Global Entertainment and Media Outlook, you can: ... try ... use ... see ... assess www.pwc.ru/en/publications/media-outlook-2018 PwC Russia(www.pwc.ru) provides industry-focused assurance, tax, legal and advisory services. Over 2,700 professionals working in PwC offices in Moscow, St Petersburg, Ekaterinburg, Kazan, Novosibirsk, Rostov-on-Don, Krasnodar, Voronezh, Vladikavkaz, Ufa, Nizhny Novgorod and Perm share their thinking, experience and solutions to develop fresh perspectives and practical advice for our clients. The global network of PwC firms brings together more than 250,000 people in 158 countries. * PwC refers jointly to AO PricewaterhouseCoopers Audit and OOO PricewaterhouseCoopers Advisory or, as the context requires, other member firms of PricewaterhouseCoopers International Limited, each of which is a separate legal entity. © 2018 AO PricewaterhouseCoopers Audit and OOO PricewaterhouseCoopers Advisory. All rights reserved.
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