One of the more interesting annual reports is PwC’s ‘Global Entertainment and Media Outlook’, which looks at how various media verticals are likely to perform in the coming years. Here are some of the key findings from this year’s research:
Online Viewership Will Drive TV Advertising and Will be Boosted by New Measurement Services
At a 15.1 percent CAGR, PwC say they expect that online TV advertising will more than double to US$10.19bn in 2020. Interestingly, PwC say that in 2020 that figure will stilform a relatively small portion of the global TV advertising market – just 4.8 percent – due in large part to the growth of ad-free SVOD services like Netflix and Amazon. The study also predicts that new measurement services will help to both monetise changing consumption patterns and target ad campaigns more accurately.
Chinese OTT Market is Catching Up with the US
The US’s electronic home video revenue (which includes all forms of on-demand video, including physical copies) of US$17.19bn in 2020 will account for around one-third of the global total. However, China will see the strongest growth, with a 31.3 percent CAGR taking it from fifth in the world in 2015 to second in 2020, with revenue of US$3.11bn. As with many areas of media and technology, PwC expect that the Chinese domestic market for OTT/streaming will be dominated by local players like Tencent and Alibaba – but not Netflix, at least for now.
Live Programming Will Continue to be a Key Differentiator
PwC say that the biggest linear audiences – and therefore the biggest advertising spend – will be attracted by entertainment shows with live interaction such as voting, and by live sporting events – which has already been driving the price of rights for live sport competitions like the NFL and English Premier League to new heights.
Online Advertising’s Growth Will be Curbed by Ad Blocking
While total Internet advertising revenue will surge at an 11.1% CAGR to reach US$260.4bn by 2020, the full potential of the sector will remain unfulfilled, as consumers turn to ad-blocking to overcome their frustrations over ads’ impacts on their loading times and data consumption. More positively, programmatic advertising has grown rapidly, with more than half of digital ads in mature markets now traded automatically – opening the way to better targeting of premium ads.
Mobile Won’t Dominate Online Advertising
While global mobile advertising will continue its surging growth at a CAGR of 19.6 percent to US$84.8bn in 2020 due to smartphone adoption, PwC say that mobile’s share of total global Internet advertising will be just 32.6 percent even in 2020. They say that until the measurement and user experience of mobile ads improve, advertisers are more likely to stick with traditional media and other forms of Internet advertising.