Editorial director Brad Dick analyzes and comments on PricewaterhouseCoopers’ “Global Entertainment & Media Outlook 2009-2013.”
Breezing through the garbage, euphemistically called “press releases,” that crosses my desk daily, I came across one from PricewaterhouseCoopers (PWC). The release was designed to look like news, but it was really a sales brochure for the company's latest economic forecast, “Global Entertainment & Media Outlook 2009-2013.” You can get yourself a copy for a mere $995, or $3000 if you want to share it across your organization. Let me save you some money and summarize the release.
The firm says that throughout the next five years, the media industry will see structural not cyclical change, calling these changes “intensified … digital migration.” Maybe I've missed something, but I think digital is already here. In fact, I don't see much in the media today that isn't already digital.
For the front office folks, the report's key numbers focused on advertiser spending. PWC says the global entertainment and media market as a whole, including both consumer and advertising spending, will grow by 2.7 percent over the next five years, reaching $1.6 trillion in 2013. Unfortunately, if you were hoping for good news for the remainder of 2009, forget it. PWC says advertising will see a 3.9 percent drop this year, but recover with a 0.4 percent advance in 2010.
The report refers to consumer activities using the term “digital behaviors,” i.e. consumers seeking more control over where, when and how they consume content, while simultaneously cutting back and looking for bargains. Let's see, consumers want more for less. That's not news.
Consumer spending through digital/mobile platforms accounted for about one-quarter of the overall market in 2008, but PWC says that segment will account for three times that amount (78 percent) of total growth over the next five years. Hey broadcasters, now are you thinking about mobile TV?
One unsurprising aspect of the report verifies that viewers are increasingly focused on “time-shifting” using DVRs and VOD to free themselves from scheduled TV viewing. In addition, the Web is enabling them to access a larger variety of content from divergent sources through better downloading and streaming technologies.
Because we depend on advertising, the report's predictions of ad spending are worth consideration. PWC predicts that as consumers receive an increasing proportion of their content through digital and mobile platforms, advertisers will shift their resources to reflect this increasingly fragmented ad market. In the mobile arena, opportunities across the advertising continuum will enable the growth between brands and consumers, ranging from click-through banner ads and preroll ads on video clips to coupons and online subscriptions. This migration to mobile, games and on-demand services will reinforce the need for greater transparency and accuracy in audience metrics, which the company calls a “must have” in this new media world.
The press release concluded by saying, “The winners will be those players who focus on driving and leading change that delivers real value for consumers. Segments will have to consolidate, the least loyal customers will have already left, higher-quality products will be valued by both consumers and advertisers, and digital distribution will have become mainstream, commanding fees more in line with its value. But for each of the industry's diverse segments to participate fully in this growth, they will first need to embrace the digital future.”
Correct me if I'm wrong, but hasn't the broadcast industry already embraced the digital future?
So where's our payoff?
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