Subscription TV and gaming is set to drive growth in the Australian media and entertainment markets according to a new report by PricewaterhouseCoopers. Gaming growth is tipped to be 4.1 percent while subscription TV is expected to grow by 5.1 percent Vs 2.3% for free to air TV. Over 5 years growth will be 22%.
Despite a big fall in console sales and a slump in video game sales PWC said that the gaming market, will be the fastest growing in the sector with a predicted compound growth rate of 9.5 per cent by 2015. They also forecast that Australians will own 5.5 million tablets by 2015, spurring digital content expenditure.
They claim that revenue will be generated via phones, tablets and social media.
The forecast predicts a difficult time for consumer magazines and recorded music, the only sectors expected to shrink over the coming five years. By 2015, the media and entertainment industry will be worth $37.2 billion with advertising spending is expected to reach $15bn.
David Wiadrowski, PwC head of technology, information, communications and entertainment said “While tablets may initially be adopted at a rate of one per household, PwC believes that it will be common by 2015 for each household to have multiple devices,” Mr Wiadrowski says.
A survey conducted by PwC in March 2011 found that tablet devices are predominantly used to send and receive email, followed by web browsing, social networking, playing games and listening to music.
More than a quarter of users indicated that tablets are also used for reading books and newspapers and watching films and television. About half of respondents paid for films, games, television shows and books consumed on their tablet.
“As 3G networks improve PwC believes the use of tablets will shift to become more mobile devices, used increasingly on the go,” Mr Wiadrowski says.
PwC expects tablets to enjoy a similar swift take-up profile as DVD players and digital cameras.
PWC said that the internet will lead advertising growth, predicted to be up 13.5 per cent over the period, spiking at 18.9 per cent in 2013 before slowing on an annualised basis to 10.8 per cent and 8.6 per cent in the following two years. The out-of-home advertising industry is expected to be the next-fastest growing sector, up by 5.4 per cent on an annualised basis.
David Wiadrowski, a PWC partner and one of the authors of the report, said there were a number of media sectors that had clear potential for growth driven by Asia.
“That growth in Asia provides opportunities for entertainment and media companies to go to that region and leverage off that faster growth,” Mr Wiadrowski said.
“It won’t necessarily be easy because you have got the usual cultural barriers with coming into someone else’s backyard and cutting their lunch. They will all be barriers.” However, he said Australian companies should ignore such barriers.
“To me there is no reason why Australian media and entertainment companies cannot go into that market in a more meaningful way.”
At the same time media and entertainment companies would be at the heart of what he called a “golden age for consumers”.
“We are in a golden age for consumers as organisations look to find new models to meet the needs of empowered consumers who are increasingly time-poor, but digital-savvy.”
PWC said that filmed entertainment will grow by 4 per cent while the internet, as an industry, will see a slowing of growth as spending on access reaches saturation, with PwC expecting 7.4 per cent annual compound growth by 2015.
With many in media looking closely at the future of newspapers, PwC sees the industry as remaining stagnant over the next five years with growth of just 0.1 per cent.
