Global entertainment and media outlook Amy Ball IBEC, 10 th October 2014

Transcription

1 Global entertainment and media outlook Amy Ball IBEC, 10 th October 2014

2 Consumer/end-u ser & advertising spending 5 year historic & 5 year forecast data 50 countries 13 segments Internet access spending Internet advertising TV subscriptions and license fees Television advertising Filmed entertainment Video games Music Consumer magazine publishing Newspaper publishing Radio Out-of-home advertising Consumer and educational book publishing Business-to-business

3 Ireland vs Global Trends in E&M Spend Ireland Global -7% -5% Internet Ad Internet Access V Games TV Ad OOH ad -2% Filmed Ent B2B TV Subs/Licenses Radio Music -2% Book Pub -1% Mag Pub News Pub 0% 0% 1% 1% 1% 2% 1% 1% 3% 3% 3% 5% 5% 6% 6% 5% 6% 8% 9% 2013 to 2018 % growth (CAGR) Ireland 2.3% Global 5% 11% 12%

4 What drives advertising and consumer spending in Ireland?

5 Entertainment and media spending snapshot Ireland forecasted 2018 total E&M spending by segment and value ( m): Internet access 1,133 TV subscriptions and license fees 643 Newspaper publishing 462 Internet advertising 364 Video games Business-to-business TV advertisng Filmed entertainment Music Book publishing Radio 126 Magazine publishing Out-of-home advertising 57 48

6 E&M spending in Ireland is forecast to grow Ireland s forecasted 2018 total E&M spending by value ( m) and growth (%): 116 4,254 4,200 4,000 3,800 3, % 90 3,600 CAGR 3,400 3,200 3, Total

7 Internet advertising and access will drive future growth in Ireland Value Change in Spending ( , m): Internet access in Ireland Internet advertising in Ireland Video games in Ireland TV advertising in Ireland TV subscriptions and licence fees in Ireland Business-to-business in Ireland Music in Ireland Radio in Ireland Magazine publishing in Ireland Out-of-home advertising in Ireland Book publishing in Ireland Filmed entertainment in Ireland Newspaper publishing in Ireland

8 Growth in Ireland s internet advertising will lead all E&M segments by Internet advertising ( m): Total CAGR % Total Segment (weighted) 12.2% % Mobile Internet Advertising Wired Internet Advertising

9 96%* of internet advertising growth is due to wired internet advertising, but mobile internet advertising is growing at a faster rate Breakdown of Wired Advertising Elements by 2018: Paid search Internet 48.1% Mobile 20.8% growth 6m 15 m Video Internet 3.3% Wired Display Internet 39.2% 11.9% 199 m 349 m growth Classified Internet 9.3% Mobile+Wired 205 m 12.2% 364m growth * On a value weighted basis ; m

10 Internet advertising growth is being driven by Internet access rather than content spending 1, Internet access ( m): Total 1, CAGR Total Segment 1, % (weighted) 7.9% % Mobile internet access in Ireland Fixed broadband access in Ireland

11 Mobile will increase its share within Internet Access Segment in Ireland 4G rollout across the country planned with the creation of a shared network of more than 2k sites between 2014 and 2017

12 The growth in market share of smart phones is driving expanded Internet usage 100% Worldwide Shipments of Connected Devices, by market share (%) CAGR: 90% 2.0% 80% 70% 60% 50% 40% 30% 20% 10% 0% 65% 67% 68% 69% 71% 72% 15% 15% 16% 16% 17% 17% 12% 11% 10% 9% 8% 7% 9% 8% 7% 6% 5% 4% Desktop PC Portable PC Tablet Smartphone 3.1% -8.9% -12.7% 1. IDC data; PwC analysis

13 Where are the tipping points and segment variations?

14 In Ireland, digital is displacing traditional media forms Ireland: digital vs. non-digital entertainment and media total spend ( m) and growth (CAGR), nondigital -1.6% digital % digital non-digital at these growth rates, digital will outspend non-digital by 2020

15 Growth in digital advertising is also evidenced in online TV advertising Total TV advertising in Ireland ( m): CAGR % 9.3% % Terrestrial broadcast Multichannel broadcast Online advertising but, digital will still only account for 4.2% of total value in TV advertising spend by 2018

16 Digital growth in newspapers is negligible on a value weighted basis 400 Newspaper advertising and circulation in Ireland; value ( m) and growth (%) print circulation digital circulation digital advertising print advertising CAGR: -5.6% PC 23.9% DC -2.5% DA -11.7% PA but, continued growth in digital circulation could create a tipping point for digital advertising growth past 2018

17 Growth in filmed entertainment overall was negative, but there are bright spots Filmed entertainment in Ireland ( m), CAGR: Electronic home video value ( m), CAGR: % % % Cinema Electronic Home Video Physical Home Video 2018 Through TV Subscription OTT/Streaming mainly electronic home video and, more specifically, OTT/Streaming

18 Even though OTT will earn a small portion of revenue, operators can t ignore its growth OTT/streaming vs. Total physical home video in Ireland ( m): CAGR Physical Home Video CAGR -14.3% % % SVOD TVOD Total physical home video* especially considering the negative growth in physical home video * Rentals and sell-through ; m

19 Video Gaming will be a growth area in Ireland Breakdown of Video Game Segment, CAGR: 16.0% 13.0% Total CAGR 9.5% 5.4% +5.7% 0.2% 0.6% VG Ads Digital console VG Physical console VG Online VG Digital PC VG Physical PC VG Mobile VG + 292m -18.0% with potential for advertising across gamin platforms and content * Rentals and sell-through ; m

20 Advancing from a digital strategy - to a business strategy fit for a digital age

21 The biggest challenge is monetising the digital consumer 4,500 4,000 3,500 3,000 2,500 2,000 1,500 1, Irish E&M revenue, digital vs. non-digital and year-on-year growth (%) 11.0% 2,528 1, % -3.2% 11.8% 2,448 1, % 9.8% 2,398 1, % 8.4% 2,364 1, % 2,334 1, % - 0.2% 6.7% 2,328 1,925 14% 12% 10% 8% 6% 4% 2% 0% -2% -4% % NON-DIGITAL total revenue DIGITAL total revenue growth YoY% DIGITAL total revenue NON-DIGITAL total revenue growth YoY% more must be done to encourage not just consumers digital behaviours, but their digital spending

22 How will your business change?

23 Companies' ability to drive digital growth depends on innovation focused on the consumer and... Consumer appetite for digital services will drive global E&M growth Evolution of business models to incorporate the curation of communities driving digital growth Leveraging richer, deeper data between advertisers and consumers

24 ... employing an agile business model Content creators are increasingly building direct relationships with consumers Advertisers are looking beyond the traditional agency model driving digital growth Content distributors are increasingly looking to create their own content

25 A digital strategy means customer relationships Digital Strategy Looks beyond digital innovation to target relationship innovation for the digital age Relevancy Communicate with the customer; know them as individuals Embedding behaviours Internally and externally between everyone in the business Behaviours: Forging trust, confidence, empowering innovation Give customers control, execute new ideas quickly and decisively Digital mind set: targeted, experimental, experiential, inclusive, collaborative Shift towards a more personalised customer centric organisation from finding content customers have liked, to being found by content experiences they will like -- via every channel and device

26 Thank you.. Amy Ball PwC. All rights reserved. Not for further distribution without the permission of PwC. PwC refers to the network of myear ember firms of PricewaterhouseCoopers International Limited (PwCIL), or, as the context requires, individual member firms of the PwC network. Each member firm is a separate legal entity and does not act as agent of PwCIL or any other member firm. PwCIL does not provide any services to clients. PwCIL is not responsible or liable for the acts or omissions of any of its member firms nor can it control the exercise of their professional judgment or bind them in any way. No member firm is responsible or liable for the acts or omissions of any other member firm nor can it control the exercise of another member firm s professional judgment or bind another member firm or PwCIL in any way.

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