Pulling the future forward: The entertainment and media industry reconfigures amid recovery
Five-year projection of consumer and advertiser spending data across 14 segments and 53 territories
Note: year on year (YOY), over the top (OTT) | CAGR period – 2019 to 2024
Our research shows that India will be the fastest-growing entertainment and media market globally in terms of pure consumer revenue. Over the next five years, the outlook remains highly positive for digital led segments such as OTT, Internet Advertising, Online Gaming, and Music & Podcasts that were perfectly positioned to meet consumers where they are in 2020 - predominantly at home and online. However, E&M companies simultaneously have to prepare to meet them where they will be two years from now. They will need to build and maintain direct-to-consumer relationships, offer enough differentiation or scale to compete, and unlock greater value using the right technologies.
India holds the most potential of any market in the world and its breakneck rate of growth will see total OTT video revenue overtake South Korea, Germany and Australia to jump to be the sixth-largest market in 2024.
By almost any metric India is a phenomenal market, displaying the fastest growth of any world market at a 28.6% CAGR across the forecast period. buoyed this year by the impact of the pandemic as people entertained themselves more at home. Subscription video on demand will be the prime driver of revenue, increasing at a 30.7% CAGR.
The Indian advertising market has had a tough time during the pandemic. Advertising suffered much larger falls than consumer spending on E&M, as companies selling products that rely on consumers leaving their homes stopped placing ads on various media. While digital advertising was also affected, the impact on it was relatively mild compared to that on other advertising options such as print newspapers, cinema and out-of-home. We anticipate that total Indian internet advertising (across display, search and classifieds) – will rise by 18% in 2020.
India is now the sixth-largest Internet ad market in the Asia Pacific, having surpassed Taiwan in 2019. As ad revenues recover from the pandemic, digital advertising is set to continue to outperform other forms of advertising, enabling it to rebound more robustly from the temporary setback.
Like OTT video streaming, video game and esports revenues in the India emerged as one of the beneficiaries of lockdowns and people spending more time keeping safe at home. The sub-sector’s total India revenue is expected to have risen by 27% in 2020 to $1.7bn. And it is projected to continue to rise at a CAGR of 18.8% over the five years to 2024. The video games industry has benefited from the increased demand for immersive, engaging content at home – with digital/mobile downloads seeing very strong growth during lockdown, and consumers able to consume the rich libraries of available content.
Like OTT video, digital music streaming appears a natural choice for consumers in a lockdown. Overall, we project digital recorded music revenue growth of 14% in 2020, the vast majority of it from subscriptions. Perhaps more significant are the shifts underway in the content that people are consuming via these services. Podcasts have been a big success during the pandemic. Relatively low rates of Internet connectivity and smartphone ownership have tended to restrict the podcast audience to a predominantly urban and affluent demographic with better access to the relevant technologies. But with access to the Internet and smartphones widening dramatically, Podcast listening in India has increased rapidly in recent years.
There is perhaps no other business as negatively impacted by COVID-19 as the cinema industry - theaters were shut down, blockbusters movies were rescheduled and movie production ground to a halt.
The outbreak of the COVID-19 virus globally will severely impact the Indian market, causing revenue to contract sharply. Cinema revenue will fall by -58.9% in 2020, as many screens are forced to close and major Hollywood releases are delayed.
The whole cinema ecosystem will be dramatically affected, from the cinema owners with heavy rent payments, to the staff that work there, technology vendors, suppliers of food and beverage products, cinema ad providers, and marketing agencies. What the future looks like for the cinema business is more opaque than it’s ever been in recent history.
In a word, the theme this year is personalisation. Consumers are using an expanding array of connected devices to organise, curate and discover their own unique worlds of media. In response, companies are designing their offerings to revolve around personal preferences, using data and usage patterns to pitch their products not at audiences of billions, but separately at billions of individuals.
Understanding where consumers and advertisers are spending their money in the entertainment and media industry can help inform many important business decisions.
PwC’s Global Entertainment & Media Outlook provides a single comparable source of consumer and advertiser spending data and analysis. Regardless of how you influence business decisions, the Outlook can help you understand industry trends so you can capitalise on new opportunities.
Partner and Leader
Entertainment and Media, PwC India
Tel: +91 98 3640 9700