According to PwC’s annual Global Entertainment and Media Outlook 2013-2017 (available by paid subscription), spending on traditional media will continue to dominate over the next five years– the 9% of overall consumer E&M spend on digital content in 2012 will rise to just 16% of total spend in 2017. However, digital innovation is crucial for E&M companies in North America, the South Pacific and Western Europe and will be a key priority for these markets over the next five years.
Specifically, in Canada:
- Canadian online advertising revenue reached US$3.2 billion in 2012, up from US$2.8 billion in 2011. By 2017, the market will be worth US$6.4 billion, a CAGR of 14.5% over the forecast period. Canada is a developed Internet market, with a high household broadband penetration rate of 67% and a highly Web-literate population. According to comScore, Canadians are some of the most active users of the Internet, in terms of the number of pages viewed and the time spent online, in the world, and online advertising has benefited accordingly.
- Mobile advertising is a small piece of the puzzle, but is growing at a rapid pace. Revenue is forecast to increase from US$113 million in 2012 to US$311 million in 2017, a CAGR of 22.4%. Smartphone penetration in Canada is high, and is driving growth in the market.
- The future of digital radio in Canada will be carried primarily by subscription satellite digital services from Sirius XM Canada. Satellite radio subscription revenues will grow rapidly ? at a CAGR of 8.3% through to 2017, when they will reach US$387 million, representing 17% of all Canadian radio revenue.
Although emerging markets such as those in Asia, Africa, and the Middle East will see the most total E&M growth, mature markets unsurprisingly will continue to be instrumental in driving the global shift towards digital consumption of E&M services. Encouraged by widespread ownership of smart devices, digital will constitute 44% of all spending in the mature markets by 2017, which is almost double the level in 2008 and up from 34% in 2012.
Business spending is likely a result of changing consumer preferences. Consumer are shifting their purchasing away from physical purchases, such as boxed video games, DVDs and music CDs– in 2008 physical items constituted 88% of total consumer spending, which has dropped to 73% today and which will continue falling as consumers become more accustomed to purchasing digital media and become more digitally advanced. By 2017, physical purchases will represent just 53% of spend.
Additional key statistics from PwC’s Global Entertainment and Media Outlook 2013-2017 include:
- Within the E&M sector as a whole, Internet advertising will be the fastest-growing segment, with an expected 13.1% CCAGR during the forecast period. The segment is currently worth US$100.2 billion and set to reach US$185.4 billion by 2017. A large aspect of this is mobile, with growth forecast across all regions over the next five years. A 27% CAGR will ensure mobile advertising revenues will be in excess of US$27 billion in 2017, comprising 15% of Internet advertising revenues. Video games at a 6.5% CAGR and TV advertising at a 5.3% CAGR are also showing strong growth.
- The annual value of North America’s electronic home video market—both pay-TV and over-the-top streaming services—will surpass box office for the first time in 2017. North America’s electronic home video market will be US$14.78 billion in 2017 compared to box office’s US$13.5 billion.
- Looking solely at consumer spending on E&M, China will rise from fifth in 2012 to third in 2017, surpassing the UK in 2013 and Germany in 2016. Brazil will also grow, surpassing Canada in 2014 and South Korea and Italy in 2016 to reach number seven. India will pass Australia in 2014 but remain just outside the top 10 consumer spending markets.
- Brazil will overtake UK, Canada and India in 2013 to become the third largest market for TV subscriptions (excluding license fees). Brazil is one of the fastest growing markets for consumer spending within the subscription segment at 13% CAGR.
PwC’s 14th annual update of the Global Entertainment and Media Outlook 2013-2017, is a comprehensive online source of global analysis for consumer and advertising spend. With like-for-like, five-year historical and forecast data across 13 industry segments in 50 countries, the Outlook makes it easy to compare and contrast regional growth rates and consumer and advertising spend. And new this year, it also contains individual country commentary for all segments. Find out more at www.pwc.com/ca/emoutlook