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PWC optimistic about near future of entertainment industry
By CMU Editorial | Published on Wednesday 16 June 2010
New research from accountancy types PricewaterhouseCoopers concludes that the fortunes of the media and entertainment industries will improve considerably in the next four years, and yes, that includes music. Though it’s the gaming and pay TV sectors that PwC reckons will see the biggest growth in the coming years.
The PwC report reckons that the advertising recession, which hit ad-funded media in particular, and also hindered efforts by the music and film companies to tap into advertising as a new revenue stream, is over and a resurgence in advertising and sponsorship budgets will help the media and entertainment sectors recover after some tricky years. Internet advertising will see the biggest rise, PwC reckon web ad spend could go up by over 10%. Meanwhile TV advertising, which has suffered most in recent years, should also enjoy a boost.
The other reason PwC are optimistic about the future of media and entertainment is that they reckon the internet is about to come of age, and after a decade of media, music and movie types desperately trying to work out how to adapt to the internet era, certain key new business models will come into their own and start raking in the cash. In part that will be because consumers will adapt and become more willing to pay for digital content, especially when it is delivered via smartphones.
The accountants’ Global Entertainment & Media Outlook 2010-2014, published yesterday, observes that “the industry has reached a defining moment: re-evaluating and redefining its business models in ways that will ultimately redraw the value chain”, while adding “more and more, people are willing to pay for subscriptions” and “the tipping point is fast approaching at which usage, subscription and advertising revenues for content services will migrate quickly towards mobile platforms; in some markets it has already happened”.
That said, to tap into all this lovely growth, music and entertainment companies will need to quickly adapt to those new business models that start to take hold. Anyone hoping the Napster generation, who embraced the internet so early on, and drove the boom in online piracy, would conform to more traditional consumer behaviour once they grew up will be disappointed, if the PwC report is to be believed. It remarks: “Consumers [at large] are changing. We studied if, when young people grew up, they were adopting their parents’ behaviour. It absolutely was not the case”.
