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ATS Singapore 2013, PWC Presentation
The 'Global Entertainment and Media Outlook 2013-2017' report from PwC analyzes growth trends and consumer behavior across various sectors, including internet access, advertising, and entertainment. It forecasts significant growth in mobile internet subscribers and highlights the increasing importance of consumer insights and digital innovation in shaping market dynamics. The report emphasizes the divergence in spending and growth rates between mature markets and emerging economies, pointing out the shift towards digital advertising and consumer-driven experiences.
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ATS Singapore 2013, PWC Presentation
- 1. Global entertainment andmedia outlook 2013-2017 Agility to Innovate with a Focus on Customer Insights Greg Unsworth Singapore Technology, Media and Telecommunications Industry Leader www.pwc.com/outlook
- 2. PwC LLP Internet accessspending 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 www.pwc.com/outlook Consumer/end- user & advertising spending 5 year historic & 5 year forecast data 50 countries 13 segments
- 3. PwC LLP Plotting globalmarkets based on growth and market size reveals two different insights 3.0% | $1,011 9.5% | $351 2017 market size ($US mn) Mature Next Wave Up & Comers Slow Growing Examples: Germany Japan UK US Singapore Examples: Greece Poland Sweden New Zealand Examples: BRIC Argentina Indonesia Examples: Colombia Kenya Philippines Thailand Turkey $114 Market Size 2.6% 10.2% | $101 2013 – 2017 CAGR $ 1,384,554 3.7%CAGR Market Size $ 477,648 11.6% 11.2% $ 136,214 3.1% $154,057
- 4. PwC LLP What drivesadvertiser and consumer spending?
- 5. PwC LLP Growth inInternet subscribers will drive advertiser and consumer spending . . . Broadband CAGR (2013 – 2017) 8.9% 20.5% 31.5% 3.7% 11.6% 11.2%3.1% 2.6% 9.7% 7.7%2.9% Mobile Internet Subscriber CAGR (2013 – 2017) Total E&M CAGR (2013 – 2017) 12.1% Singapore : 5.1%
- 6. PwC LLP While the“Mature” markets will dominate the list of top mobile Internet countries . . . US 87% Germany 87% UK 88% Japan 93% S. Korea 96% Canada 77% Italy 85% Australia 85% Netherlands 84% Singapore 85% 83% 52% 54% Top 10 Nations in 2017 Mobile Internet Subscriber Penetration (% of population) Total 2017 Mobile Internet Subscriber Penetration (% of population)
- 7. PwC LLP The “NextWave” and “Up & Comers” markets dominate the list of fastest growing Mobile Internet Subscriber bases India 42.1% MENA 36.5% Indonesia 30.3% Chile 41.8% Turkey 27.9% Colombia 35.1% Pakistan 71.1% Thailand 43.9% Vietnam 30.4% Philippines 31.1% 8.9% 20.5% 31.5% Top 10 Nations in Mobile Internet Subscriber Penetration Growth (2013 – 2017 CAGR) Total 2017 Mobile Internet Subscriber Penetration Growth (2013 – 2017 CAGR)
- 8. Consumer insights are the heartof innovation
- 10. PwC LLP The consumerjourney and what we have seen so far . . . 1 Consumers revel in cheaper – even free – E & M products, as digital distribution over multiple platforms/devices brings the prices down. 2 Consumers use social networks to find and filter content, creating versions customised “to me” . . . and “shared” with their friends. 3 Consumers regard “convenience and experience” as inseparable elements of content consumption 4 An enhanced awareness of targeted advertising and the implications on the power and value of consumer data but . . . 5 As businesses recognise and focus on this individual, we‟ve seen privacy concerns increase . . .
- 11. PwC LLP So, whatdid the consumer tell us??? The multi-screen experience „My time,‟ but it‟s a shared experience Targeted advertising – make it worth it Work catching up with the way we play The changing reading experience Recommendations shape choice $ Paying for quality and „the experience‟ Connectivity and rights barriers Love it or hate it, always „on‟ Consumers new “normal”
- 12. PwC LLP How dothe Segments Diverge?
- 13. PwC LLP 1.4% 1.5% 1.9% 6.4% 4.5% 1.5% 2.8% 3.5% 8.3% 3.5% 5.1% 8.1% 8.1% 12.2% 0.0% 0.3% 0.5% 1.5% 2.8% 3.2% 3.6% 3.8% 4.9% 5.3% 5.6% 6.5% 11.1% 13.1% Newspaper publishing Consumermagazines Consumer & educational books Music B2B Radio Filmed entertainment TV subscriptions & license fees Out-of-home TV advertising Total Video games Internet access Internet advertising Global Singapore Internet & video game spending will drive future growth Global growth in aggregate spending (2013 – 2017 CAGR) 2013 2017 1,730,981 2,152,473 Total E&M Market ($US mn) 24.3% growth
- 14. PwC LLP Consequently, Internetand video games will also attract more and more advertising dollars -2.7% 1.5% 0.2% 0.0% 1.5% 2.9% 8.3% 3.5% 5.1% 15.0% 12.2% -1.5% -0.8% 0.4% 1.0% 3.3% 4.8% 4.9% 5.3% 5.5% 11.9% 13.1% Directories Newspapers Consumer magazines Trade magazines Radio Total Out-of-home Television Cinema Video games Internet advertising Global Singapore Global growth in advertising spending (2013 – 2017 CAGR) 488,660 592,274 2013 2017 Total Advertising Market ($US mn) 21.2% growth
- 15. PwC LLP 34% 21% 17% 7% 7% 7% 7% 2012 Television -excluding online and mobile Digital advertising Newspaper - print Radio Consumer magazines - print Out-of-home Other Television will continue to attract big ad dollars, but digital will close the gap in total spend 34% 31% 12% 7% 5% 7% 5%0 2017 CAGR: 4.8% Global advertising spend by platform (share of total advertising spend)
- 16. PwC LLP 24% 8% 42% 8% 6% 9% 3% 2012 Television -excluding online and mobile Digital advertising Newspaper - print Radio Consumer magazines - print Out-of-home Other Taking a Singapore view 25% 13% 37% 8% 4% 12% 2%0 2017 CAGR: 2.9% Singapore advertising spend by platform (share of total advertising spend)
- 17. PwC LLP Digital advertisinggrowth 100 185 CAGR: 13.1% 2012 2017 72% 10% 7% 4% 5% 71% 12% 8% 4% 3% Internet advertising B2B Newspaper Consumer magazines TV advertising 72% 20% 6%2% 78% 13% 7% 2% Mature Next Wave Slow Growing Up & Comers CAGR: 21.6% Global digital advertising spend ($US bn) Sector Share of Spend Share of Spend
- 18. PwC LLP Projected growthin consumer spending -4.9% 0.3% 0.5% 0.8% 1.5% 0.0% 2.9% 3.1% 3.5% 3.8% 5.2% 6.3% 19.1% 0.0% 3.5% 1.9% 8.0% 15.7% 6.1% 4.3% 0.0% 5.5% 3.5% 4.4% 7.7% 38.3% Physical home video Consumer magazine circulation Consumer & educational book publishing Newspaper publishing circulation Music Concerts Total Radio Business-to-business TV subscriptions Box office Video game end-user spending Electronic home video Singapore Global Global growth in consumer spending (2013 – 2017 CAGR) 797,711 895,093 2013 2017 Total Consumer Spending Market ($US mn) 12.9% growth
- 19. Where are the tipping pointsand segment variations?
- 20. PwC LLP 29,350 24,927 25,977 27,62828,897 30,231 31,221 2008 2012 2013 2014 2015 2016 2017 Online & mobile drive Video Game revenue…. Global console games spend ($US mn) 2013 – 2017 CAGR 10.5% mobile -0.1% PC 8.2% online 4.6% console 32% 54% 2008 2017 51% 2014 tipping point: online & mobile gaming become the main driver of industry revenue for the first time Share of total video game end- user spending
- 21. PwC LLP Mobile advertisingto overtake classified in Internet advertising categories by 2015 $0 $10,000 $20,000 $30,000 $40,000 $50,000 $60,000 $70,000 $80,000 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 $USmillions Classified Display Video Search Mobile Global Internet advertising spend by category 12.1% 2013 – 2017 CAGR 10.3% 27.0% 6.5% 25.8%
- 22. PwC LLP A CloserLook at The Region
- 23. PwC LLP Overall RevenueGrowth By Country 1.2% 3.1% 3.5% 3.6% 4.7% 4.8% 5.1% 8.8% 11.3% 12.0% 13.5% 13.5% 14.8% 16.2% 17.1% Japan Australia New Zealand Taiwan Hong Kong South Korea Singapore Malaysia Thailand China India Vietnam Philippines Pakistan Indonesia Total E&M Growth Rates (CAGR 2013 -2017)
- 24. PwC LLP Overall Revenueby Country Total E&M Revenue 2013 Japan China South Korea Australia India Indonesia Taiwan Thailand Malaysia Hong Kong Philippines Singapore New Zealand 2017 Japan China South Korea Australia India Indonesia Thailand Taiwan Malaysia Philippines Hong Kong Singapore New Zealand
- 25. PwC LLP Internet AdvertisingGrowth By Country 5.2% 8.4% 8.9% 9.4% 11.3% 12.2% 12.6% 15.9% 18.3% 21.5% 22.6% 24.2% 24.7% 25.8% 31.7% Japan Taiwan New Zealand Australia Hong Kong Singapore South Korea Malaysia Vietnam China Pakistan India Thailand Philippines Indonesia Internet Advertising Growth (2013 -2017)
- 26. www.pwc.com/outlook © 2013 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. Constant Digital Innovation
Editor's Notes
- #2 Welcome to this presentation of PwC’s Global Entertainment & Media Outlook 2013-2017. Extensive content –covers consumer and advertising spending across 13 media segments and 50 countries – gives us a real competitive edge in the insight it provides into our clients’ markets. Teams across our global network have been using the Outlook to engage with clients in multiple sectors and geographies for thirteen years now, and its continuing strength from year to year – particularly in its flexible online environment – is testament to the value that Outlook continues to deliver value for our clients worldwide in the entertainment and industry and beyond, worldwide. The website has information for further deep dive into each segment and country which allows us to tailor our approach and discussion with our clients and the markets they operate in.Major changes in our Outlook this year include: No longer publishing a print version of the Outlook Added the “Insights” publication – both online and printed – to provide more context to the data Included commentary on each of the regions Changed vendor to Informa for statistical and data analysis Added two new countries – Nigeria and KenyaWhat you’ll see over the course of the this presentation are some of the major data findings, sector trends and key themes in this year’s Outlook. And what I can give you here is of course just a snapshot. The Outlook’s content is so rich that every presentation is – or certainly should be – different, tailored to the audience’s specific areas of interest – something that’s particularly easy to do now, using the Outlook’s online functionality.
- #3 Objective – Discuss the extensive research and data available across different countries and segments. 5 year historical and 5 year forecast dataConsumer and advertising spending50 countries Emphasize that Nigeria & Kenya are the two new countries in response to interest in the fastest growing countries in African continent13 segmentsNote that while Internet Access is not an E&M market per se, we believe it’s a leading indicator of E&M consumer spend as well as the fastest growing platform for advertising spend – further, we’ll discuss a number of observations with respect to the importance of internet access as a driver to E&M spendAlthough we don’t cover each segment today, we do give an example (using Filmed Entertainment) of how to use the Outlook to show that a deep dive can be performed in any segment
- #4 Finally, the lower left quadrant represents those countries which are smaller in scale and the expected growth rate lags behind the other countries.Countries in this market include: Switzerland, Sweden, Norway, Belgium, Taiwan, Austria, Poland, Denmark, Finland, Hong Kong, Portugal, New Zealand, Greece, Israel, IrelandRange of Market Size of Quadrant - $17 billion in Switzerland to $5 billion in GreeceIn summary…As you can see, the Mature market is still going to dominate the E&M space and is approximately twice the combined size of the remaining market. Therefore, it will still be important and relevant to focus on the mature market. However, capturing the Next Wave market will be crucial for success given the expansion and opportunities available for growth.Throughout the presentation, we will try to draw out the differences between these markets, with our focus on the segments which we have coined as Mature, Next Wave and Up & Comers, and how they are expected to impact E&M growth.
- #5 While this is a nearly impossible question to answer with a short or crisp answer, we do believe that two of the primary drivers are (1) the growing global access to the internet and (2) the proliferation of mobile internet devices primarily in the form of smartphones and tablets. Let’s explore each of these a bit deeper…..
- #6 Objective – Growth in E&M spend is heavily influenced by growth in internet access – both Broadband and Mobile Internet Subscribers, especially in the New Wave and Up & Comers markets. However, mobile access is even more important. Introduce the theme of where to concentrate/emphasize advertising dollars – should advertisers start investing at a faster pace in the digital advertising platforms?This is a comparison of overall E&M CAGR vs. Broadband and Mobile Internet Subscriber CAGR. We can see that overall E&M spend is highly correlated to broadband and mobile internet access. In the “Mature” market, the growth rate for mobile internet access far exceeds Broadband subscriber growth due to the largely high degree of broadband penetration in the Mature markets. In the “Next Wave” and “Up & Comers” markets, broadband and mobile internet access is driving E&M spend. Let’s look at this a bit closer…
- #9 Given the trends of continual digital growth and consumer demands to access information on digital platforms, how should content creators, advertisers and content distributors react to adapt and innovate to capitalize on this change?
- #11 This year we focused on privacy, piracy and data because consumers provide important lessons to business in these areas. In addition, privacy, piracy and data each represent aspects of the growing importance and power of “the individual”. Piracy is often blamed on the internet...and yes it is a platform that drops the cost of content distribution to virtually nothing. But in fact, the widespread consumer comfort with duplicating copyrighted material that we found...is the price the industry pays for not being agile enough with business models.Music is still the best example of this. Young Chris in Sydney is a reformed pirate...because he’s found a streaming music service that gives him everything he needs...and so he’s willing to pay for it. Reluctance to experiment with new business models – to protect legacy revenue streams – is slowly changing...but not fast enough for this consumer. One interesting point to note is that the words “piracy” and “downloading” have become interchangeable. We asked consumers about content that they pirate and only some of them...like Tiago in Brazil...are comfortable using the word. This reinforces our point made in previous years that piracy is not seen as a real crime...Privacy and data go together...Successful businesses in E and M rely on sophisticated data analytics to understand their individual customers better...and target their offers. Consumers need to be on board because their personal data is the raw material. This isn’t new...we have been saying this for a number of years.What is new is the increasing consumer sensitivity and expectation. As a result, regulators around the world are tightening privacy obligations...and urging businesses to review their systems and processes for gathering, storing and using customers’ data. Businesses need to be aware of this new sensitized environment.As regulators tighten obligations for business, technology makes it easier for consumers to invade each others’ privacy. Wearable computing – such as Google Glass – and phones and tablets with embedded cameras are making it easier for consumers to create content. Everyone’s a content creator now. That has implications – and opportunities – for the E and M industry too.
- #12 So what did the consumers tell us?More and more, the consumers are understanding the value of their information to us. They understand that their internet usage, preference and personal data is being tracked by everyone and they expect that this information will be used to provide them with a better internet experience. You know I like this website and I use this product, provide me with relevant information / products so I can leverage the information I am providing you. Better yet, offer me money or discounts to gather my data.Once we have their data, the consumer expects us to be careful with it and protect this assets. The high profile cases such as LivingSocial, Zappos and LinkedIn are giving consumers more and more reasons to think twice before giving their information away. However, once they do, they expect a better and more customised experience. On the other hand, the consumers are less concern about information provided by content providers. They understand the need to pay for information, however, they prefer to obtain this content for free where possible. However, as we saw, if it is something they like or the product is of quality, they may be more willing to pay such as music or video.
- #13 Now that we have covered the macro trends and the overall E&M spend, we will go deeper into what we expect for each of the 13 segment over the next 5 years?
- #14 Objective (2 slides) – To continue the discussion of the impact of internet access at the segment level (vs. countries) and growth is expected only in industry that have a good digital strategyTotal E&M spend (Consumer spend and advertising revenue) is expected to grow at a CAGR of 5.6% and the total E&M market is forecast to grow by 24.3% over the period of 2013 to 2017. However, not all segments share in this growth equally. Interestingly, no segments are forecast for declining growth over the forecast period; however, the publishing sector in general (newspapers, books and magazines) is fighting hard to stay in neutral to marginally positive territory.Depending on the audience, call out particular segments of interest in relation to the overall advertising CAGR of 5.3%NOTE – Major changes such as regulations could have a significant impact on our projections.
- #15 Objective – to take a deeper dive into advertising spend (vs. Overall E&M spend)Total E&M advertising spend is expected to grow at a CAGR of 4.8% and the total E&M market is forecast to grow by 21.2% over the period of 2013 to 2017. Depending on the audience, call out particular segments of interest in relation to the overall advertising CAGR of 4.8%
- #16 This is a slightly different way of looking at the advertising data. Here we aggregate all digital spend across segments in “Digital Advertising” and each segment only includes advertising dollars related to the print portion (e.g., Newspaper advertising does NOT include online advertising).Historically, TV advertising spend dominates the industry – and we continue to expect this to be the case in the next 5 years.However, digital advertising as a percentage of total spend is expected to gain significantly from other media and will grow from 21% to 31% of overall spending. The growth is expected to come at the expense of newspaper and consumer magazine advertising. This development is not unexpected when we consider the expected growth in broadband and mobile internet access. In the slides that follow, we take a closer look at the components and growth of digital advertising.
- #17 This is a slightly different way of looking at the advertising data. Here we aggregate all digital spend across segments in “Digital Advertising” and each segment only includes advertising dollars related to the print portion (e.g., Newspaper advertising does NOT include online advertising).Historically, TV advertising spend dominates the industry – and we continue to expect this to be the case in the next 5 years.However, digital advertising as a percentage of total spend is expected to gain significantly from other media and will grow from 21% to 31% of overall spending. The growth is expected to come at the expense of newspaper and consumer magazine advertising. This development is not unexpected when we consider the expected growth in broadband and mobile internet access. In the slides that follow, we take a closer look at the components and growth of digital advertising.
- #18 Objective – to demonstrate growth in digital advertising spend in Next Wave & Up & Comers. The slide breaks out digital advertising spend by our quadrants and points out Next Wave is outperformingHowever, the more interesting and important trend is how quickly the Next Wave markets will gain on the Mature market and grow at a CAGR of 21.6% over the next five years and capture a greater share of the digital advertising spend. Next Wave markets share of the spend will increase from 13% to 20% whereas the Mature markets will lose market share from 78% to 72%. CAGR in the Next Wave market nearly doubles of the overall market.Thinking back to the 9.7% CAGR for growth in Broadband households and 20.5% CAGR for growth in mobile internet subscribers for the Next Wave markets, we’re seeing advertising spend correlate closely to growth in internet access.
- #19 Objective – to present the second primary component of the Outlook forecast..the consumer spend The consumer spend market is approximately twice the size of the advertising market at $797 billion. It is expected to grow at a 3.5% CAGR over the next five years to approximately $895 billion. As you can see, growth in consumer spend with a CAGR of 3.5% is lagging behind that of advertising spending with a CAGR of 4.8%.The home video market tells the digital vs. physical story of the overall E&M industry. Although still material to the overall home entertainment market, the market for physical home video is expected to continue their decline at approximately 5% over the next year years. On the other end, the electronic home video is expected to grow at approximately 19% over the same period and overtake physical in 2015. This is perhaps the most extreme example of how the internet and digital age is impacting our lives – hence the overall market.This is indicative that the growing middle class and spending is not affecting all segments. You can see that segments that are more prone to digital are outpacing traditional segments.
- #20 And here - across the board - we see segment tipping points being driven by digital migration. Industries / segments which are further down the digital transformation path will enjoy significant growth while segments which still have some work to do to continue the digital migration strategy will lag behind in growth.
- #21 … consoles are expected to return to the 2008 level of sales for the first time in 2016. The decline over the past few years are primarily driven by the lack of new consoles introduced in the market. The new consoles rumoured to hit the market or will be introduced soon include the new Xbox 360, PlayStation 4 and Illumiroom (Microsoft Research product introduced at CES 2013).Although lagging in sales, consoles are still a big part of the market and are now used for other purposes such as managing video needs such as streaming Netflix
- #22 Objective – to demonstrate the importance of mobile internet access in internet advertisingMobile advertising is finally set to take off properly, with growth forecast across all regions over the next five years: a 27% CAGR will reflect mobile advertising revenues in excess of US$27bn in 2017, constituting 15% of Internet advertising revenues. Despite the projected growth, though, mobile must still seek to overcome certain hurdles, especially device segmentation.Although Mobile is the growing trend and where much of the hype is centered, search and display are still the dominating factors in this industry and are forecast to enjoy a 12.1% and 10.3% CAGR over the Outlook horizon. While growing at a healthy pace, search and display as a percentage of total market at 71% are not expected to gain market share from the other categories of Internet advertising. However, mobile internet represents approximately 10.5% of the market in 2013 and will grow to 14.0% by 2017. Video will grow from 4.4% to 6.1% over the same period. These segments are growing at the expense of Classified, which is expected to decline from 13.8% to 11.5%. Classifieds will grow at a CAGR of 7%, reaching US$20.2bn in 2017. Online classifieds are set to take over from their print equivalents in developing economies in the next five years. However, this segment’s share of the total online ad market will be lower in 2017 than in 2012.
- #24 Objective – to take a deeper dive into advertising spend (vs. Overall E&M spend)Total E&M advertising spend is expected to grow at a CAGR of 4.8% and the total E&M market is forecast to grow by 21.2% over the period of 2013 to 2017. Depending on the audience, call out particular segments of interest in relation to the overall advertising CAGR of 4.8%
- #25 Objective – to take a deeper dive into advertising spend (vs. Overall E&M spend)Total E&M advertising spend is expected to grow at a CAGR of 4.8% and the total E&M market is forecast to grow by 21.2% over the period of 2013 to 2017. Depending on the audience, call out particular segments of interest in relation to the overall advertising CAGR of 4.8%
- #26 Objective – to take a deeper dive into advertising spend (vs. Overall E&M spend)Total E&M advertising spend is expected to grow at a CAGR of 4.8% and the total E&M market is forecast to grow by 21.2% over the period of 2013 to 2017. Depending on the audience, call out particular segments of interest in relation to the overall advertising CAGR of 4.8%