Entertainment & Media Outlook: 2020-2024

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Global Entertainment & Media Outlook: 2020-2024

October 2020

PwC | Global Entertainment & Media Outlook

1. Perspectives from the 2020 Outlook 03

2. Overview – Global E&M macro trends 07

3. Segment review – Spotlight on India 13

4. Q&A 37

Contents

2

Perspectives from the 2020 Entertainment & Media outlook

Pulling the future forward: The entertainment and media industry reconfigures amid recovery


Pulling the future forward: The entertainment and media industry reconfigures amid recovery

4

• Consumer habits can take a lifetime to learn—but just a lockdown to lose.

In only a few short months, COVID-19 accelerated ongoing changes in

consumers’ behaviour, pulling forward a series of digital disruptions that would

have occurred in future years

• New opportunities for new business models present themselves to meet

consumers who are predominantly at home and online – businesses are creating

new arrangements and combinations aimed at opening up new revenue

opportunities

• Consumer spending to grow faster than advertising – E&M companies are

increasingly in the business of delivering experiences and content directly to

consumers, not delivering audiences and eyeballs to advertisers

• Reconfiguration is underway as consumers and businesses adapt. Although

there will still be challenges for E&M companies as we move beyond the

pandemic, the digital migration that has been pulled forward will also generate

opportunities in most segments

Global Entertainment & Media Outlook perspectives

2020 Outlook perspectives


Shifting patterns of consumer behavior…

5

The pandemic has propelled consumers even faster towards digital behaviours in many areas of their lives


From To

Attending live music events (e.g.,

concerts, festivals)

Viewing movies in the cinema

Attending fitness classes at studios

• Live performances streamed online

• Viewing concerts on gaming platform event

• Viewing films on over-the-top (OTT) platforms

(e.g., Netflix, Disney Hotstar)

• On-demand online fitness classes

• Live-streamed fitness classes

Attending B2B trade shows• Virtual events, online digital tours and

multimedia


… had led to E&M companies adopting new ways to drive growth and match consumer preferences

6


Companies shift from

advertisers to

subscriptions

• Drive towards subscriptions reflects a wider attribute of the accelerated digital future:

the power of direct-to consumer connections

Digital event spaces

present new opportunities

• Companies are exploring different ways to bring live experiences into the home in a

more personalized and engaging way. Eg. Virtual events, online digital tour and esports

Pandemic boosts

virtualization

• Connected studios: From production to sound and graphics have an opportunity to

leverage cloud infrastructure enabling virtual production capabilities.

• Advances in tech such as 5G roll-outs combined with the aftereffects of COVID-19 may

help immersive tech like AR/VR to realize their true potential

Marketers are redirecting

spend to Digital

• Media budgets are shifting to Digital channels in tandem with the spike in media

consumption since lockdown. Cross-platform strategies (OTT + CTV) are becoming

critical to improve monetization and advertiser ROI.

• Though still nascent, many brands and businesses are looking to utilize Podcasts as a

channel to deliver vs their normal advertising channel of choice such as OOH

Overview – Global Entertainment & Media macro trends

Global summary and macro trends


Total E&M revenue is set to fall more than US$120bn on 2019

8


Global total E&M revenue vs annual growth, 2015-2024

…In 2009, the last year the global economy shrank, total global E&M revenue fell by just 3.0%

Note: All figures are reported in nominal terms reflecting actual spending transactions and therefore include the effects of inflation

Source: PwC Global Entertainment & Media Outlook 2020-2024, www.pwc.com/outlook, World Bank, IMF

1.71.8

1.92.0

2.12.0

2.22.3

2.42.5

-8.0%

-6.0%

-4.0%

-2.0%

0.0%

2.0%

4.0%

6.0%

8.0%

0

0.5

1

1.5

2

2.5

3

2015 2016 2017 2018 2019 2020 2021 2022 2023 2024

Yo

Y g

row

th (

%)

To

tal E

&M

re

ve

nu

e (

US

$tr

)

Global E&M revenue (Est.) Annual E&M growth Global GDP growth

-5.6% drop in

E&M revenue

6.4% jump in

E&M revenue


However, Digital will see its share of total E&M revenue jump in 2020

9


Source: PwC Global Entertainment & Media Outlook 2020-2024, www.pwc.com/outlook

Note: 2019 is the latest available data. 2020-2024 values are forecast projections

600

700

800

900

1,000

1,100

1,200

1,300

1,400

1,500

1,600

2015 2016 2017 2018 2019 2020 2021 2022 2023 2024

Revenue (

US

$bn)

Digital Non-digital

Global total E&M revenue, digital vs. non-digital, 2015-2024 (US$bn)

• Digital revenue to touch 60%

share of total E&M revenue by

2020. Pre-COVID forecast was

58.5%

• Non-digital revenue segments

heavily impacted: cinema, sales

of print newspaper and

magazines

• Digital revenue segments that

have benefited: OTT, video

games, internet advertising

Digital revenue accelerates5.4%

2019-24

CAGR

-1.0%

Non-digital entertainment

choices have been heavily

affected by COVID-19


In terms of individual segment market size as % of global E&M revenue, OTT video will see the largest gain

10



Note: 2019 is the latest available data. 2020-2024 values are forecast projections | Above table excludes figures for Internet access.

Share of E&M revenue by segment: 2019 vs. 2024

– Fast trackers: OTT, Internet

Advertising, Video games and

esports, music, radio and

podcasts

– Slow trackers: Cinema,

Newspapers and consumer

magazines, Traditional TV and

advertising

COVID impact on market size

Segment 2019 actual

- Global

2024

forecast

2019 actual

- India

2024

forecast

Internet Advertising 14.5% 15.9% 4.1% 6.8%

TV and Home Video 11.3% 9.4% 33% 29.2%

B2B 8.5% 8.0% 3.9% 3.2%

Video games and esports 6.1% 7.3% 3.9% 5.7%

TV Advertising 7.2% 6.1% 9.4% 6.4%

Newspapers and consumer

magazines7.4% 4.9% 11.8% 7%

Music, radio and podcasts 4.3% 4.2% 2.7% 3.1%

OTT video 2.2% 3.5% 2.4% 5.2%

Books 2.8% 2.6% 2.7% 2.6%

OOH 1.8% 1.8% 1.4% 1.2%

Cinema 2.1% 1.6% 5.1% 2.8%

VR 0.1% 0.2% - -


Looking at growth across segments, OTT continues to top the list, followed by Internet advertising

11



Note: Data consumption is not included

-4.0%

-2.4%

-1.0%

0.1%

1.4%

1.8%

2.8%

3.3%

4.7%

6.5%

13.4%

24.9%

-0.7%

-2.6%

7.4%

2.1%

9.0%

6.0%

13.5%

7.6%

21.7%

18.8%

28.5%

-10% -5% 0% 5% 10% 15% 20% 25% 30% 35%

Newspapers and consumer magazines

Cinema

Traditional TV and home video

TV advertising

Books

B2B

Music, radio and podcasts

OOH

Internet advertising

Video games and esports

OTT video

VR

2019-2024 CAGR %

India

Global

Segment CAGR % 2019 - 2024

Cinema and Newspapers are

showing negative growth for

the first time in India


India leads as the fastest-growing consumer market when looking at pure consumer E&M revenue*

12



Note: 2019 is the latest available data. 2020-2024 values are forecast projections | * Includes only subscription revenue

Five fastest-growth consumer markets, CAGR 2019-2024 (%)

8.8% 8.6%

5.8%5.4% 5.4%

0%

1%

2%

3%

4%

5%

6%

7%

8%

9%

10%

India Nigeria Philippines Saudi Arabia Pakistan

• Overall E&M total revenue by

territories has Egypt leading the

way with a 17.3% CAGR and

total revenue set to double in

2024

• However, looking at pure

consumer revenue has India

leading the pack with a 8.8%

CAGR through 2019-2024

• Overall global consumer

revenue is forecasted to rise

2.2% in the forecasted period

E&M consumer revenue leaders


Industry Global Mega trends

13



Mobile display will overtake wired Internet advertising in 2022. Led by mobile video consumption and social media.

Games category is set to become the third-largest consumer of data by 2024

Digital advertising revenue surpassed traditional advertising in 2019

Globally, Digital consumer magazine advertising will overtake print magazine by 2023.

Asia Pacific overtakes North America as the leader in smart speaker ownership in 2019

COVID-19 has accelerated OTT platform adoption. Global SVOD revenue will overtake box office spend in 2020.

In 2019, data consumed by smartphones overtook fixed broadband ; to accelerate as 5G becomes more accessible1

2

3

4

5

6

7

Segment review –Spotlight on India


Expect a K-shaped bifurcated recovery, in which some sectors rise while others fall

15

India spotlight - Summary


Note: Data consumption is not included Size proportional to segment revenue in 2019

• Segments linked to advertising and

those where consumption happens in

physical spaces are likely to be

negatively impacted

• Digital E&M spending — OTT subscription

or mobile data allowance is being

increasingly regarded as a utility and

therefore a non-discretionary expense

• Top 4 segments in terms of % CAGR

growth (2019-24)

1. OTT Video

2. Internet Advertising

3. Video games and esports

4. Music, radio and podcasts

• The industry’s longer-term outlook

remains robust, growing at a CAGR of

10.1% to reach US$55 Bn by 2024

• Changing consumer behaviors will clearly

impact Cinema and Print segment.

Digital businesses to gain

OTT video

Internet advertising

Video games and esports

Music, radio and podcasts

Consumer books

Out-of-home advertising

Traditional TV and home video

B2BTV advertising

Newspaper and consumer magazine

Cinema -50

-30

-10

10

30

50

70

-10 -5 0 5 10 15 20 25 30

Sh

ort

te

rm r

eco

ve

ry : %

gro

wth

in

20

21

v/s

20

19

Long term view : 5yr % CAGR 2019-2024


India is the fastest growing OTT market at 28.6 % CAGR ; to become the sixth-largest market in 2024

16

Deep dive: OTT video


OTT video segment revenue 2019-2024 (US$ Bn)

46.3

58.4

86.8

2019 2020E 2024E

0.8

1.1

2.9

2019 2020E 2024E

84% 86% 93%

16% 14% 7%

2019 2020E 2024E

Subscription VOD Transactional VOD

Subscription VOD vs transaction VOD

(% share of overall OTT market)

82% 85% 87%

18% 15% 13%

2019 2020E 2024E

IndiaGlobalIndiaGlobal

• India’s OTT market to overtake South Korea, Germany and

Australia and become the sixth-largest market in 2024.

• OTT video growth is coming from both inside and outside the

home as Internet-connected devices proliferate, notably new

smartphones and connected TVs.

• Subscription VOD will be the prime driver of revenue, increasing at a

30.7% CAGR from US$708mn in 2019 to US$2.7bn in 2024

• The new at-home environment has led to the rise of new direct-to-

consumer apps, local ‘bite-sized’ entertainment platforms and user-

generated content (UGC) formats.


OTT to gain as cinema degrows; SVOD revenue to overtake box office spend in 2020

17

Deep dive: OTT video



0

10

20

30

40

50

60

70

80

2015 2016 2017 2018 2019 2020 2021 2022 2023 2024

Reve

nu

e (

US

$b

n)

Subscription VOD revenue Box office revenue

Global SVOD vs box office revenue, 2015-2024 (US$bn)

14.5%

-2.4%

2019-24 CAGR

0.0

0.5

1.0

1.5

2.0

2.5

3.0

2015 2016 2017 2018 2019 2020 2021 2022 2023 2024

Re

ve

nu

e (

US

$b

n)

Subscription VOD revenue Box office revenue

India SVOD vs box office revenue, 2015-2024 (US$bn)

30.7%

-2.6%

2019-24 CAGR

• COVID-19 has accelerated OTT platform adoption

• A key tipping point will be reached in 2020 when SVOD revenue will overtake box office spend. This event highlights the

speed at which OTT platforms have been accepted by consumers.

• OTT to benefit from the degrowth of cinemas, as some film studios choose to fast-track new releases to home video platforms.

SVOD

slides past

box office

In 2018, SVOD revenue

was approx. a third of total

box office revenue


While COVID impacted overall advertiser confidence, Internet advertising segment emerged comparatively unscathed

18

Deep dive: Advertising



India advertising market, 2019-2024 (US$mn)

• India is now the sixth-largest Internet

ad market in the Asia Pacific, having

surpassed Taiwan in 2019.

• Mobile will continue to be the

primary driver of revenue due to

increased data affordability, new

mobile-first formats, ability to

measure, and strategic targeting (i.e.

geolocation).

• TV advertising model continues to

be impacted by the ongoing shift in

the consumers’ media consumption

habits

• Traditional media such as

newspapers are investing heavily in

their own digital services and looking

to monetize through a hybrid of

subscriptions and ad based models.

Internet adv - US$3.8bn by 2024

0

2,000

4,000

6,000

8,000

10,000

12,000

2019 2020 2021 2022 2023 2024

Re

ve

nu

e (

US

$m

n)

Newspaper and consumer magazine OOH TV Internet Music and podcasts Radio

21.7%

2019-24

CAGR

2.1%

-1.5%

7.6%

20%

9.8%


India’s billion-dollar gaming market to reach US$3.2bn in 2024, increasing at an impressive 18.8% CAGR

19

Deep dive: video games and esports



• Gaming and esports is capitalizing on the need

to bring live experiences into the home in more

personalized and engaging ways. Players are

increasingly experimenting with cloud, virtual

reality (VR) and mixed reality (MR)

• Esports represents less than 1.0% of overall

market in 2019, but will be the faster growing

segment with a projected 33% CAGR to 2024

• As per category, social/casual games to become

even more dominant over the forecast period,

accounting for 86.7% of the market in 2024.

• Despite surging growth and enormous potential,

the challenge that remains is of relatively low

levels of app monetization.

Gaming content sees rapid growth

0.0

0.5

1.0

1.5

2.0

2.5

3.0

US

$ B

n

Social/ Casual

Traditional

Consumer spend by gaming category (US$ Bn)

Video games and Esports segment revenue 2019-2024 (US$ Bn)

US$2.7 Bn

US$0.3 Bn

1.31.7

3.2

2019 2020E 2024E


With 57.6mn monthly listeners*, India is the third largest podcast listening market in the world after China and the US

20

Deep dive: music, radio and podcasts


Note: 2019 is the latest available data. 2020-2024 values are forecast projections | *people who listened to at least one podcast in the last month

• Fuelled by the uptake of music-streaming brands, the

overall space is forecast to expand to total revenue of

nearly US$1.7bn in 2024, at a 13.5% CAGR.

• The music industry is seeing increasing value in

partnerships with Esports and social media companies

as they look to strengthen their music library for

integration with gaming events, videos, messages etc.

• India will also see strong increase at a 30.4% CAGR in

its monthly podcast listener base over the next five

years, supported by entry of foreign players and original

content on topics including news, society, culture and

sports.

• Ease of voice search coupled with increasing

penetration of smart speakers will further drive segment

revenues over the next 5 years.

India the sleeping giant of the global podcast

market

Music, radio and podcasts segment revenue (US$bn) 2019-2024

99 103120

2019 2020E 2024E

0.80.9

1.7

2019 2020E 2024E

India podcast ad revenue (US$mn) and monthly listeners (mn), 2015-2024

0

50

100

150

200

250

0

20

40

60

80

100

2015 2016 2017 2018 2019 2020 2021 2022 2023 2024

Po

dca

st m

on

thly

lis

ten

ers

(m

n)

Po

dca

st a

dve

rtis

ing

re

ve

nu

e (U

S$

mn

)

Podcast advertising revenue Podcast monthly listeners

IndiaGlobal

2019-24

CAGR

30.4%


Preparing for the new normal

21

The Road Ahead

Source: PwC analysis, Secondary research., PwC Global Entertainment & Media Outlook 2020-2024, www.pwc.com/outlook

Changing patterns of

media consumption

will clearly affect

business models – but

will also open up new

opportunities for

capturing growth.

Offer convenience &

accessibility, as consumers

are likely to hold on to some

of their newly acquired habits

Create new (digital)

content propositions,

realize new revenue streams

Optimize revenue mix or

pricing models to emerge

more resilient.

Data, Personalization of

content & advertising, to

capture a bigger share of

wallet.

Digital Acceleration led by

cloud to increase flexibility,

lower costs and minimize

disruptions

Strategic investments &

Alliances in search of scale

and growth

As the industry navigates into the post-pandemic world, six long-term growth opportunities

are emerging.

pwc.com

Thank you

© 2020 PwC. All rights reserved. Not for further distribution without the permission of PwC. “PwC” refers to the network of member firms of PricewaterhouseCoopers

International Limited (PwCIL), or, as the context requires, individual member firms of the PwC network. Each member firm is a separate legal entity and does not act as

agent of PwCIL or any other member firm. PwCIL does not provide any services to clients. PwCIL is not responsible or liable for the acts or omissions of any of its

member firms nor can it control the exercise of their professional judgment or bind them in any way. No member firm is responsible or liable for the acts or omissions of

any other member firm nor can it control the exercise of another member firm’s professional judgment or bind another member f irm or PwCIL in any way.


Methodology

23

Methodology

• A base line of historic data was collected from publicly available information including from trade associations and government agencies.

• In addition to this, interviews with relevant associations, regulators and leading players have been conducted to gather insights and

estimates not available in the public domain.

• This year, we’ve delayed publication of the Outlook to get a clearer view of the pandemic’s impacts. And we’d like to make highlight that

while our projections are robust, their future accuracy could clearly be affected by the continued rapid changes related to the pandemic,

including policy responses from the Government.

• The data was sourced from both primary and secondary research from a variety of sources.

• A total of 53 countries are represented within this year’s Outlook covering a list of 14 segments covered as below:• Traditional TV and home video

• OTT video

• VR

• Data consumption

• TV advertising

• Internet access

• Newspapers and consumer magazines

• All revenues are estimated in US dollars. The 2019 exchange rates have been applied to all historic and future years to eliminate

fluctuating currencies. ( 1$ = 70.031 INR)

• OOH

• Business-to-business

• Video games and esports

• Cinema

• Music, radio and podcasts

• Books

• Internet advertising

Documents

Entertainment & Media Outlook: 2020-2024