Indonesia to See Big Growth in Digital Media: PwC
With increasing access to the Internet and an explosive growth in mobile devices and entertainment, most notably in the BRIC countries, businesses must engage in constant innovation in order to keep pace with evolving markets, PricewaterhouseCooper projected on Thursday.
In its annual Global Entertainment and Media Outlook 2013-2017, PwC said that growth in the industry will come from spending on digitally delivered media in the next five years, although most spending will continue to be on on-digital media.
PwC says that China, Brazil, India, Russia — which make up the BRIC nations — as well as the Middle East and North Africa, Mexico, Indonesia and Argentina will see the most growth, almost doubling their share of total entertainment and media (E&M) revenues by 2017 to 22 percent from 12 percent in 2008.
“The impact of a growing middle class and increased urbanization in these market will help reverse the fortunes of some segments of the industry,” PwC said in a statement.
In response, entertainment and media businesses are continuing to heighten their customer insights and transform their business models to become more agile.
“Constant digital innovation becomes the industry’s new license to operate,” the report said.
It forecasts global spending in entertainment and media to rise to $2.1 trillion by 2017 from $1.7 trillion in 2012, with a compound annual growth rate of 5.6 percent.
The growing affluence of a rapidly emerging middle-class consumer with a propensity to spend on entertainment and media experiences — combined with improving infrastructure in many high growth markets — bolsters overall growth rates in a number of key segments, Marcel Fenez, PwC’s global entertainment and media leader said.
“Universally, E&M companies need to invest in developing and distributing content in ways that compel customers to loyalty and take advantage of their tendency to engage in sharing content experiences,” Fenez added.
Everyone in the E&M industry will need to invest in constant innovation in its products and services, its operating and business models and most importantly, its customer experience, understanding and engagement.
It also said that digital innovation and growth continues to dominate the E&M industry landscape, and the strong momentum behind digital spending will trigger significant tipping points in many of the more mature markets of North America, Western Europe and Asia Pacific between now and 2017.
The report said that digital E&M spending, encouraged by widespread ownership of smart devices, will constitute 44 percent of all spending in the mature markets by 2017, almost double the 2008 level and up 34 percent from 2012.
It said that Indonesia will be the fastest-growing TV market, with a 21 percent compound annual growth rate in revenues and a market of $1.7 billion in 2017. Kenya, Thailand and Vietnam also all show impressive growth, it added.
In consumer spending on E&M, China will rise from a fifth in 2012 to a third in 2017. China will also become the second-largest TV market, PwC reported.
Brazil, having one of the fastest-growing markets for consumer spending, will surpass Britain, Canada and India in 2013 to become the third-largest market for TV subscription, it said.
Global newspaper publishing revenues will stagnate at the $164 billion 2012 levels and projected to remain at this level for the five-year period.
Continued expansion in growth markets will offset the longer-term declines in mature markets. PwC said that understanding new consumers will be key over the next five years as the global customer base will be more diverse than ever, especially with an increasing number of consumers accessing the Internet through mobile devices.
While consumers are increasingly in control of their entertainment experience, they are also confused amid the recent explosion in their media choices.
Consumers, according to PwC, also increasingly want their media and entertainment personalized — using the device they want, when they want it.
It pointed to consumer’s growing use of the “second screen” of smartphones and tablets, to comment on and share the experience of TV and other content with others, often on social media.
PwC said that advertising spending continues to migrate to new digital platforms.
However, the ability to attract them will depend on offering advertisers, credible, cross-platform metrics that define and measure audience reach, engagement and relevance.
Fenez said that the old rationale of the E&M industry was to achieve complete control over the content life cycle from development through distribution.
“Control is now in the homes and hands of E&M customers. Now E&M companies have to not only offer engaging content, but also an exceptional digital experience,” he said.
The challenge, Fenez added, is to find “the ideal balance of the right content at the right price at the right time through the right medium.”