M+E Daily

By Mel Lambert

PricewaterhouseCoopers’ new 2010-14 Outlook report affirms that digital technology will continue to transform every entertainment and media (E&M) segment in the coming years, as consumers escalate their adoption of digital platforms.

PwC’s extensive research shows that the pace of consumers’ digital migration is running well ahead of the industry’s expectations, although non-digital revenue streams will still account for two thirds of total global spending in 2014.

“Changing consumer behavior is impacting all segments of the entertainment and media industry, as companies search for the right role and positioning in the digital value chain that is now taking shape,” says Theodore X. Garcia, newly appointed Managing Director of PwC’s US Entertainment, Media and Communications Advisory Services.

“As one of the newest members of MESA,” Garcia adds, “we are looking forward to further extending our relationships within the rapidly-growing entertainment and media space. Many of our current clients are also MESA members; we understand their goals and can help them create lasting value, to develop successful synergies and offer a competitive advantage.”

“The digital pace of change has proven to be even quicker than anticipated,” says Ken Sharkey, US Leader, Entertainment, Media & Communications Practice, “with consumers embracing new media experiences and digital downloads at often-unexpected speeds. There is no ‘one-size-fits-all’ approach for E&M companies to stake their position in the digital value chain. The continued fragmentation of the E&M sector will fuel greater experimentation by both established industry giants and niche players in adopting business models that include hybrid combinations of advertising and subscription approaches.”

The PwC Outlook forecasts global entertainment and media spending to rise from $1.3 trillion to $1.7 trillion by 2014, growing at a compound annual growth rate (CAGR) of 5.0%. The US E&M market is expected to grow at 3.8% CAGR, reaching $517 billion in 2014, from $428 billion in 2009. And while digital services continue to be the primary growth engine, traditional revenue streams are expected to remain significantly larger throughout the forecast period.

As one of the world’s leading suppliers of professional services, PwC advises that the industry will need to embrace digital not as a competitor to traditional services, but as a complement. Digital spending in the US is expected to account for 26% of all E&M spending in 2014, up from 19% in 2009.

Now in its 11th annual edition, PwC’s Global Entertainment & Media Outlook provides a comprehensive source of global analysis for consumer/end-user and advertising spending. With like-for-like, five-year historical and forecast data across 13 industry segments within 48 countries, the PwC Outlook balances local, on-the-ground PwC expertise against a global perspective.