Global entertainment and media revenues are set to rise at a compounded annual growth rate (CAGR) of 4.2% from $1.8tn to $2.2tn in 2021 according to PwC’s Global entertainment and media outlook for the years 2017-2021.
Globally, Internet advertising has hit the tipping point in 2017, when it overtook TV advertising in revenue generated. This is only set to increase with a CAGR of 9.8% due to the rapid growth of mobile advertising revenues.
In Singapore the entertainment and media revenues are set to rise at CAGR of 4.7% over the next five years from $5.6bn to $7.1bn in 2021.
Singapore lags behind the global averages, with Internet advertising comprising of 14.7% of total advertising spend, compared to 25.9% in Japan and 53.6% in China. Print advertising spend remains dominant with a 44.5% share of total advertising spend.
However, Internet advertising is projected to grow 11.3% per year to 2021, with print declining 2.1% per year for the next five years.
Consumer spend on video games has reached a tipping point in 2016 according to the report, with Singaporeans spending more on video games than on TV (combining TV subscriptions, over-the-top and video-on-demand). Video games expenditure in 2016 hit $368m and is forecast to hit $489m in 2021.
The report cites factors such as consumers rejecting traditional large-bundle subscriptions for viewing content online and social media. While on the video games end, the profile of a typical gamer has shifted from a young male to a casual gamer from all demographic segments. While spend per transaction is low, in-app purchases form a significant chunk of the market, where 60% of Singapore video game spend coming from casual or social gamers.
Spending on live event in Singapore (box office and live music) is also expected to grow at 4% per year over the next five years. This is almost double the rate of total entertainment and media consumer spend.
“At a time when entertainment and media is becoming more virtual, consumers in Singapore continue to value live experiences. Singapore now has venues, such as the National Stadium, which play host to the global stars, and consumers are snapping up these high-priced tickets more than ever before,” said Oliver Wilkinson, entertainment and media leader, PwC Singapore.
Across the Southeast Asia region, the media industry is diverse, where markets can be at extreme ends of the spectrum. Myanmar for example has a nascent media industry, but is now seeing rapid acceleration and attracting investor interest in the sizable amount of consumers who can afford to pay for media content and the brands that want to reach them.
From five free-to-air TV channels in Myanmar in 2009, to over 20 today, Myanmar households are looking beyond free-to-air with a fifth of the 6m households having pay TV. While average revenue per user is very low, the report noted that this is an exciting market for media industry players and represents significant growth potential.
Indonesia on the other hand remain the largest media and entertainment market in the region, and is forecasted to be the highest growing at CAGR of 9.6%. Internet advertising there is expected to surge 21.8% per year to 2021.
Thailand’s Internet advertising spend is also expected to surge just behind Indonesia at 20.3% per year between 2016 to 2021. Video game spend has also outpaced pay TV due to high take-up of social and casual games, with spending on games expected to grow 23.8% per year between 2016 to 2021.
The report claims that future growth in this sector will be driven by platforms where consumers have freedom of choice. This results in players needing to be clear about the strategies they employ.
“It is a focus on user experience above all that will determine the winners and the losers. Embracing technology and data is not new – what is new is the focus on using both to enhance user experiences and interfaces. In particular data analysis used right can enable the industry to shift from describing outcomes to predicting consumer trends and prescribing courses of action,” said Mark Jansen, technology, media and telecommunications leader, PwC Singapore.