PWC ENTERTAINMENT & MEDIA OUTLOOK 2017-2021 - MEDIENORGE
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www.pwc.no PwC Entertainment & Media Outlook 2017-2021
Consumer/end-user &
advertising spending
5 Year historical &
5 Year forecast data 54 countries 17 segments
Data Video games Internet TV advertising Cinema Music
consumption access
Radio Magazine Newspaper Book publishing Out-of-home Business-
publishing publishing advertising to-business
E-sports Internet Internet Traditional TV Virtual reality
advertising video and home video
www.pwc.com/outlook
Emerging technologies are enabling companies to differentiate by creating innovative user experiences
The accelerating speed of technological change is
opening up large opportunities for innovation in
product offerings that revolve around user experience
1 Technology is the driving force behind
new and rapidly growing segments 2 Exploitation of data and new technology
is enabling innovative user experiences.
Internet of
Things
Augmented
Robots reality
Virtual reality
2021 Virtual
Drones
Emerging E-sports outlook reality
technologies are
changing the
E&M industry
3D printing Blockchain
Artificial
intelligence
Technology companies now dominate the world‘s
largest companies measured by market capitalization
Top 5 public traded companies by market cap (June 30) Tech
Other
2007
2017
Source: FT Global 500 & Ycharts.com
Companies are already leveraging emerging
technologies to enhance user experience
Worldwide tech company developing A U.S-based VR startup is
next mobile OS with AI-powered features planning to open a VR multiplex
AI/ auto-
to streamline consumer experience. AR/ VR immersing consumers in a personalized
mation
entertainment experience.
Global telecom company Social networking
invests in entertainment Cyber- company releases anti-
Cloud
operating system to deliver a security harassment capabilities to
personalized entertainment Technologies enhance user safety.
experience across all devices. transforming
E&M
Multinational E&M Access,
The sharing economy
conglomerate has created a 3D shifts consumer behaviour from
not owner-
patent-pending 3D printer. printing owning assets.
ship
E-commerce company is investing in Big data/ Multinational tech company
Internet
an IoT voice-led operating system to enable data providing real-time sports statistics and
of Things
analytics
smart devices. point-by-point analysis.
Business Insider, Forbes, Variety, International Data Corp., Tech News World, CNBC, PwC
What Are the Global Trends?
Expected global growth in E&M expenditures of 4.3%
Scandinavia Russia
3.1% 7.2%
US Germany
3.7% 1.8%
UK
3.0% France
2.4% Japan
1.8%
Global China
4.3% 8.3%
Brazil
4.7% India
10.5%
BRIC: 8.0%
Mature: 3.1%E-sports and internet video are expected to outperform the other segments in the global E&M market in terms of percentage growth Global growth by segment 2016-2021F E-sports 21,7 % Internet video 11,6 % Internet advertising 9,8 % Video games 8,2 % Internet access 6,0 % Cinema 4,4 % Total music revenue 3,5 % TV advertising 2,8 % Business-to-business 2,7 % Radio 2,1 % Total traditional TV and home video 1,3 % Books 1,1 % Magazines -0,5 % Newspaper -2,7 %
The Scandinavian E&M market
Spending on digital channels is expected
to drive growth in the Scandinavian E&M
market
40 Digital is defined as:
2016-2021F CAGR • Online and mobile internet
35 advertising
• Mobile TV subscription
30 Internet Access 5.0% • Digital music
• Electronic home video
25 • Online and wireless video
USD in billions
games
20 Digital 8.1% • Digital consumer magazines
circulation spending
15 • Digital newspaper circulation
spending
10 Non-Digital -0.9% • Digital trade magazine
circulation spending
5
• Electronic consumer,
Total educational, and professional
Digital and 3.1% books
• Satellite radio subscriptions
14
20 6
Non-Digital
12
15
20 F
20 F
20 F
20 F
13
F
1
17
18
19
20
21
20
20
20
20
20Internet advertising is expected to lead growth across media segments in the Scandinavian E&M market towards 2021 Scandinavian growth by segment 2016-2021F Internet advertising 8,3 % Video games 6,7 % Internet access 5,0 % Internet video 4,2 % Music 2,8 % Radio 2,4 % Out-of-home advertising 2,1 % Business-to-business 1,4 % TV subscriptions and licence fees 1,1 % TV advertising 0,9 % Book publishing -0,2 % Filmed entertainment -1,0 % Magazine publishing -1,3 % Newspaper publishing -4,6 %
Digital advertising revenues are expected
to represent 58% of total Scandinavian
advertising revenues in 2021
2016 CAGR: 3.2 % 2021F
4%
4%
5%
6% 9%
8%
12%
18% 8 566 10 023
USD USD
millions 48% 14% millions
58%
16%
Digital advertising Television - excluding online Newspaper print
Business-to-business Magazine print OtherMobile is expected to make up more than 70 %
of internet advertising revenue in US by 2021
Internet advertising in US advertising revenue
120
100 26%
27%
2016 –2021F CAGR
USD in billions
30%
80 34%
Mobile internet advertising in USA 18.7%
40%
60 Non-Mobile internet advertising in USA -3.7%
49%
74%
40 65% 73%
70%
75% 66%
83% 60%
20 91% 51%
35%
25%
9% 17%
12
13
14
15
16
17
18
19
20
21
20
20
20
20
20
20
20
20
20
20User Experience Driving Growth
Print will continue to see a negative growth
rate and digital will not compensate for
this loss
Year-over-year % growth rate in Scandinavia
60 %
50 % 2016 –2021F CAGR
11.7 % Digital circulation
40 % 3.1 % Digital advertising
- 6.0 % Print advertising
30 %
- 6.7 % Print circulation
20 %
10 %
0%
(10 %)
14
16
15
F
F
F
F
13
F
17
18
19
20
21
20
20
20
20
20
20
20
20
20Mobile will continue to be the biggest growth
story towards 2021 in internet advertising
Internet advertising market by sub segment in Scandinavia
2016 CAGR: 8.3 % 2021F
16% 17%
25% 24%
2016 –2021F CAGR
4% Mobile 17.6 %
3 788 5 638 Search 10.7 %
USD USD Video 8.9 %
millions 4% millions Classified 2.8 %
19%
Banner/Display 0.3 %
15%
40%
35%Number of apps per smartphone & tablet
is expected to continue to grow and drive
growth in mobile internet advertising
Apps per smartphone & tablet
200
180 2016 –2021F CAGR
10.5 % Central & Eastern Europe
160 9.2 % Scandinavia
7.7 % Western Europe
140
Number of apps
6.0 % US
120
100
80
60
40
20
2012 2013 2014 2015 2016 2017F 2018F 2019F 2020F 2021FThe gap between TV advertising revenue and
Internet revenue is increasing
Internet and TV advertising revenues in Scandinavia
2016 –2021F CAGR
6 000
8.3% Internet
0.9 % TV
5 000
USD in millions
4 000
3 000
2 000
1 000
2012 2013 2014 2015 2016 2017F 2018F 2019F 2020F 2021FTraditional losing ground to online
streaming services focusing on user
experience
Traditional TV advertising is losing ground to online streaming services.
1 800
CAGR 0,90%
%
CAGR 1,80
1 500
7% 8% 9% 10% 11% 2016 –2021F CAGR
5% 6%
1 200
USD in millions
Online 14.5%
900
84% 83% 81% 80% 79% 77% 76% 75% 73% 72%
600 Multichannel 2.8%
300
15% 15% 15% 15% 16% 16% 16% 16% 17% 17% Terrestrial -0.9%
14
16
12
15
F
F
F
F
13
F
17
18
19
20
21
20
20
20
20
20
20
20
20
20
20Electronic home video is expected to grow, but
cinema is still keeping up
Scandinavian filmed entertainment revenue
100% 2016 –2021F CAGR
12% 11% 10%
16% 14%
90% 18%
24%
33%
80% 41%
54%
Electronic home video 4.2%
70%
52% 53%
51% 52%
60% 46% 49%
41%
50% 21%
33% Cinema tickets 2.0%
7%
40%
30%
Physical home video -9.6%
20% 39% 38% 35% 35% 36% 35% 36% 36% 36% 37%
10%
0%
14
16
12
15
F
F
F
F
13
F
17
18
19
20
21
20
20
20
20
20
20
20
20
20
20Despite growth in streaming, live music will
continue to be the main revenue stream in the
music industry
Scandinavian music revenue
100% 2016 –2021F CAGR
10% 10% 9% 9% 8% 8%
11% 11%
90% 16%
13%
Streaming 6.7%
80% 19% 21% 23% 24% 25% 26% 27% 27%
12% 16%
70%
60%
Live music 2.5%
50%
40%
68% 67% 68% 67% 66%
30%
65% 65% 64% 64% 65%
Physical music -3.7%
20%
10%
0%
14
16
12
15
F
F
F
F
13
F
17
18
19
20
21
20
20
20
20
20
20
20
20
20
20Emerging technologies will change how companies generate, distribute and control content
Among emerging technologies, AI, IoT and VR received
most funding in 2016
Global VC funding, Essential
Eight technologies
24%
AI
IoT
VR
Other
(Robots, AR, 29% 5 876
Drones, 3D USD
Printing and millions
Blockchain) 14%
33%
Source: CB Insights, PwC, VC FundingBenefits from AI include an improved ability
to tap into consumer preferences and
generate personalized content
AI can help companies innovate content creation and
improve customer experience
Simplifying content creation
• AI-generated music
• AI generated video-ads Artificial Intelligence (AI) could
contribute up to $15.7 trillion to
Improving the customer experience
• AI-generated content curation (e.g. Spotify playlists)
the global economy by 2030 and the
• AI-generated product recommendations (film, TV, music) E&M industry can seize a significant
share of this gain
Better, more creative decisions
• Maximization of film and content licensing revenues PwC AI-report: Sizing the prize
• AI-generated insight from video and social media
Freedom of repetitive tasks
• Programmatic ad buying
• Newsletter curation, creation and distribution
• AI-generated sports summaries, film scoring and stock music
Outlook 2017-21: AI is already entertaining you. Deborah Bothun & David LancefieldScandinavia is better positioned to create
value from Internet Of Things compared to
the rest of the world
Key drivers for the Scandinavian IoT value creation
potential
By expanding to new or even
non-existing entertainment
1 Well developed fiber- and internet-
infrastructure. platforms, E&M companies can
unlock the potential of IoT
2 4G coverage is widely spread across Scandinavia. Sweden is
leading in testing 5G coverage.
PwC AI-report: Sizing the prize
3 On average, each person in the Nordics has almost 3 devices
connected to the internet in 2016. By 2021, this is expected
to grow to 6 devices per capita, which represents four times
as many devices as in the rest of the world. 67M USD
IoT Scandinavian market size 2016
20 %
Nordic loT CAGR 2016-2021 in the
Source: Connected Things: New digital ecosystems – unlocking the growth Nordics 2016 - 2021
potential of IoT (2017) Arthur D. Little and TeliaWe are at an amazing point in history for
artists. A revolution is going to happen, and
next year it’s going to take over. It’s the ability
of artists to have the control and the say of
what they do with their music at large. The
answer to this is in the blockchain.”
- Imogen Heap, British singer & songwriterCEO perspective: E&M CEOs are mostly concerned about
changing consumer behaviour
81 % 78 % 78 %
of E&M CEOs are of E&M CEOs are of E&M CEOs are
concerned about concerned about concerned about
changing consumer availability of key volatile energy costs
behaviour
77 % skills
75 %
of E&M CEOs are of E&M CEOs are
concerned about concerned about the
uncertain economic speed of technological
growth changeFind your own Outlook story online ... www.pwc.com/outlook
Contact us!
Eivind Nilsen
Partner
952 608 32
eivind.nilsen@pwc.com
Øystein B. Sandvik
Director
952 604 15
oystein.sandvik@pwc.com
© 2017 PwC. All rights reserved. In this context, “PwC”
refers to PricewaterhouseCoopers AS, Advokatfirmaet
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Accounting AS and PricewaterhouseCoopers Skatterådgivere AS
which are member firms of PricewaterhouseCoopers International
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