PwC: Consumers to Shift Entertainment, Media Spending to New Digital Platforms

Mon Jul 17, 2017

Kathy Crosett

As new sources of entertainment become available, consumers are reviewing how to spend entertainmenttheir time and money. PwC has released its 18th Global Entertainment and Media Outlook report which projects consumer spending on 17 entertainment categories for the next five years. Media sellers should be aware of these industry changes.

In the next few years, consumers will continue to go to the movies, driving a CAGR of about 1.2%. Theaters in the U.S. will likely be reporting revenue of about $11.2 billion in 2021, which is not a huge increase over the $10.6 billion reported in 2016, and much of the revenue increase will stem from higher ticket prices.

Video on demand will capture significant consumer interest and spending. PcW analysts project an 11.3% CAGR, with spending expected to rise from $8.2 billion last year to $14.1 billion over the next five years.

For those of us wondering about the promise of VR, the PwC analysts have an optimistic outlook. The sector is growing rapidly, but remains small in comparison to other forms of entertainment. Between 2017 and 2021, revenue generated from VR content will increase from $421 million to $5 billion. At that point, 68 million people will be using VR headsets in the U.S.  Video is expected to account for 58% of all spending on VR content as consumers seek to immerse themselves in films or sporting events.

As people devote more time to the online universe, especially on their mobile devices, internet advertising will boom. By 2021, marketers will shell out $116.2 billion, with 74.4% of that spending going to mobile advertising. Currently, mobile accounts for 50.5% of the $72.5 billion online ad market.

Consumers don’t have unlimited entertainment dollars, so they’ll be trimming expenditures in some areas. Traditional pay TV will barely grow in the next five years, going from $100.9 billion in 2016 to $101.1 billion by 2021. At the same time, TV will probably bring in $75.2 billion in ad revenue in 2021, which represents 1.3% CAGR from 2016.

Other entertainment and media sector segments will grow as follows in the U.S. between 2016 and 2021. Note that revenue is derived from both advertising and subscriptions in some cases:

  • Video games: 2016=$21.0 billion 2021=$28.5 billion
  • Internet access: 2016=$140.3 billion 2021=$189.8 billion
  • Magazines: 2016=$30.2 billion 2021=$30.5 billion
  • Newspapers: 2016=$29.6 billion 2021=$23.9 billion
  • Radio: 2016=$22 billion 2021=$24.1 billion
  • Out-of-home advertising: 2016-$9.2 billion 2021=$11 billion
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About Kathy Crosett

Kathy is the Research Director for SalesFuel. She holds a Masters in Business Administration from the University of Vermont and oversees a staff of researchers, writers and content providers for SalesFuel.

View all posts by Kathy Crosett
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