PwC’s Australian Entertainment & Media Outlook 2020-2024 shows Australia’s entertainment and media revenue is set to contract by 4.46 per cent to $57.4bn in 2020, although the industry’s fundamental growth trajectory remains largely positive after the disruption of COVID-19.
• Consumer revenue is set to grow to A$50.6bn in 2024, at a CAGR of 3.14 per cent while advertising revenue is set to grow more modestly to A$17.9bn in 2024, at a CAGR of 1.37 per cent
• Streaming video on demand (SVOD) continues to grow to $2.3bn by 2024 at an impressive 16.15 per cent CAGR
• Digital newspaper consumption continues to grow, with digital subscription revenues to grow to A$535m in 2024, at a CAGR of 11.93 per cent.
• Broadcast Video on Demand (BVOD) to reach A$501m in 2024, a 24.87 per cent CAGR, partially offsetting Free-To-Air (FTA) TV ad revenue declines.
• Digitally distributed music including streaming will surge to A$1.4bn in 2024, a 10.31 per cent CAGR.
• Interactive games & esports to grow to A$4.4bn in 2024, a 6.87 per cent CAGR driven by app-based games and esports, after being the fastest growing segment in last year’s Outlook.
The Outlook, in its 19th year, indicates advertising revenue is set to fall to $14.9bn in 2020 at a CAGR of -11.31 per cent, primarily impacted by pandemic-driven changes to consumption behaviour and the evolving appetite of advertisers for more measurable media investment.
Justin Papps, PwC Australia Partner and Entertainment & Media Outlook Editor says “This result comes amid the sharpest fall in global entertainment and media revenue in the 21-year history of this research, with a global decline of 5.6 per cent from 2019 – more than US$120 billion in absolute terms.
“While the pandemic has had an unprecedented and varying impact, the entertainment and media industry has been going through significant change for years and the pandemic has, in the most part, simply accelerated and amplified ongoing shifts in consumers’ behaviour and in digitalisation.”
Streaming Video On Demand grows as people adjusted to more time at home
Streaming video on demand (SVOD) continues to grow to $2.3bn by 2024 at an impressive 16.15 per cent CAGR. The introduction of Disney+, Apple TV+ and Binge since the last report coincided with people spending much more time at home and the reduction of out of home entertainment options. All SVOD platforms took advantage of this opportunity with the release of content that will create new habits with consumers.
“SVOD is one of the parts of the market that everyone is watching closely, largely based on their own consumption habits changing during 2020. As a market, we are spoilt for choice for streaming services and it will be interesting to watch how many services are retained by consumers once things return to normal,” Papps says.
Digital newspaper consumption continues to grow
PwC’s Outlook shows COVID-19 has driven record-breaking news consumption amongst Australians, t. Digital advertising and digital subscriptions are set to grow to A$928m to 2024, at a CAGR of 5.64 per cent.
“Australian newspapers have increased their value proposition as a “trusted source of news content” during the pandemic, with many local new publishers offering free coverage of the pandemic, regularly updated blogs and dedicated pages during the health crisis, and before that, the bushfires in early 2020,” Papps says.
“There’s also been an industry-wide focus on digital transformation and the monetisation of digital news formats in the Australian newspaper landscape. The ability of the news media outlets to successfully convert newly acquired digital news audiences during the pandemic to subscription models will be central to future growth within the industry.”
COVID-19 accelerating consumers’ transition to all things digital
PwC’s Outlook shows Broadcast Video on Demand (BVOD), Streaming Video On Demand (SVOD), podcasting, music streaming and online gaming are the top beneficiaries of the acceleration in digitisation due to the pandemic.
BVOD is set to grow rapidly over the forecast period, reaching over A$501m in 2024 and a CAGR of 24.87. This is followed by streaming video on demand (SVOD), as mentioned above, continues to grow to $2.3bn by 2024 at an impressive 16.15 per cent CAGR. Digitally distributed music including streaming will also surge to A$1.4bn in 2024 and a CAGR of 10.31 per cent.
Further, the interactive games segment is set to grow to A$4.4bn in 2024, a 6.87 per cent CAGR, buoyed by growth in app-based games and esports as people have looked for alternative forms of entertainment during the lockdown period and while their favourite sporting codes were on hiatus.
“What our Outlook tells us is that entertainment and media in Australia is becoming more virtual, streamed, personal and – at least for the time being – more centred on the home than anyone anticipated at the start of 2020. This is also in line with what our Global Entertainment and Media Outlook shows,” Papps says.
“Across the 12 segments forecast in the Outlook all players have an urgent focus on undertaking the organisational transformation necessary to deliver growth. Consumer habits can take a lifetime to learn but we’ve seen they can take a lockdown to lose, which means business must continue to adapt in parallel in their search for growth.”