PwC has released its Australian Entertainment and Media Outlook for 2020-2024 showing the impact of changes in consumer habits accelerated by the pandemic, including the evolving appetite of advertisers for more measurable media investment.
Forecasts:
- Advertising revenue to grow to $17.9 billion in 2024 at CAGR (compound annual growth rate) of 1.37% a year.
- Consumer revenue to $50.6 billion in 2024, at 3.14% a year.
- Streaming video on demand (SVOD) to grow to $2.3 billion by 2024 at 16.15% a year.
- Digital newspaper consumption continues to grow, with digital subscription revenues to grow to $535 million in 2024 at 11.93% a year.
- Broadcast Video on Demand (BVOD) to reach $501 million in 2024, a 24.87% a year growth rate.
- Free-to-air (FTA) TV ad revenue down by 13.9% to $2.93 billion in 2020. FTA advertising revenue is forecast to decrease 2.48% CAGR to 2024.
- Digitally distributed music including streaming will surge to $1.4 billion in 2024, a 10.31% a year
- Interactive games and esports to grow to $4.4 billion in 2024, a 6.87% a year rise, driven by app-based games and esports, after being the fastest growing segment in last year’s outlook.
Australians are opening their wallets for entertainment and media such as video on demand, podcasting, music streaming and esports, a trend accelerated by the pandemic.
PwC’s Australian Entertainment and Media Outlook 2020-2024 shows Australia's entertainment and media revenue contracting by 4.46% to $57.4 billion in 2020, although the industry’s fundamental growth trajectory remains positive after the disruption of COVID-19.
The outlook, in its 19th year, indicates advertising revenue will fall 11.31% to $14.9 billion in 2020.
The decline is mainly from pandemic-driven changes to consumption behaviour and the evolving appetite of advertisers for more measurable media investment.
“This result comes amid the sharpest fall in global entertainment and media revenue in the 21-year history of this research, with a global decline of 5.6% from 2019 – more than US$120 billion in absolute terms,” says Justin Papps, PwC Australia partner and entertainment and media outlook editor.
“While the pandemic has had an unprecedented and varying impact, the entertainment and media industry has been going through significant change for years and the pandemic has, in the most part, simply accelerated and amplified ongoing shifts in consumers’ behaviour and in digitalisation.”
PwC forecasts, depending on the route of recovery, that advertising will not exceed 2019 figures until 2022, although some channels will emerge relatively unscathed compared to others.
Streaming Video On Demand grows as people adjust to more time at home
Streaming video on demand (SVOD) to grow to $2.3 billion by 2024 at an impressive 16.15% CAGR.
The introduction of Disney+, Apple TV+ and Binge since the last PwC outlook report coincided with people spending much more time at home and the reduction of out of home entertainment options.
SVOD platforms took advantage of this opportunity with the release of content that will create new habits with consumers.
“SVOD is one of the parts of the market that everyone is watching closely, largely based on their own consumption habits changing during 2020,” says Papps.
“As a market, we are spoilt for choice for streaming services and it will be interesting to watch how many services are retained by consumers once things return to normal,.”
Digital newspaper consumption
PwC’s Outlook shows COVID-19 has driven record-breaking news consumption among Australians. Digital advertising and digital subscriptions is forecast to grow to $928 million to 2024, at a CAGR of 5.64%.
“Australian newspapers have increased their value proposition as a ‘trusted source of news content’ during the pandemic, with many local new publishers offering free coverage of the pandemic, regularly updated blogs and dedicated pages during the health crisis, and before that, the bushfires in early 2020,” says Papps.
“There's also been an industry-wide focus on digital transformation and the monetisation of digital news formats in the Australian newspaper landscape.
“The ability of the news media outlets to successfully convert newly acquired digital news audiences during the pandemic to subscription models will be central to future growth within the industry.”
COVID-19 accelerating consumer transition to all things digital
PwC’s Outlook shows Broadcast Video on Demand (BVOD), Streaming Video On Demand (SVOD), podcasting, music streaming and online gaming are the top beneficiaries of the acceleration in digitisation due to the pandemic.
BVOD is forecast to grow rapidly reaching more than $501 million in 2024 and a CAGR of 24.87%.
This is followed by streaming video on demand (SVOD) to grow to $2.3 billion by 2024 at 16.15% CAGR.
Digitally distributed music including streaming will surge to $1.4 billion in 2024 and a CAGR of 10.31%.
The interactive games segment to grow to $4.4 billion in 2024, a 6.87% CAGR, buoyed by growth in app-based games and esports as people have looked for alternative forms of entertainment during lockdown and while their favourite sporting codes were on hiatus.
“What our Outlook tells us is that entertainment and media in Australia is becoming more virtual, streamed, personal and - at least for the time being - more centred on the home than anyone anticipated at the start of 2020,” says Papps. “This is also in line with what our Global Entertainment and Media Outlook shows.
“Across the 12 segments forecast in the Outlook all players have an urgent focus on undertaking the organisational transformation necessary to deliver growth.
"Consumer habits can take a lifetime to learn but we’ve seen they can take a lockdown to lose, which meanus business must continue to adapt in parallel in their search for growth.”
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