A major new report from PricewaterhouseCoopers (PwC) states that the world’s entertainment and media (E&M) companies must reshape and retool as the industry enters a “new normal”, with digital embedded in business-as-usual and moving to the heart of media companies worldwide.
The London-headquartered professional services provider states that despite ongoing economic uncertainty, the past year has seen global sales of tablets and smart devices reach record levels once again, underlining the growing revenue opportunities from digital delivery of entertainment and media (E&M) content and advertising to increasingly connected (and particularly mobile) consumers.
Digital opportunities are now thought to be well understood by media companies, advertising agencies and advertisers themselves: the industry is approaching the “end of the digital beginning”, as rising comfort levels with digital mean that it is becoming business-as-usual.
Three perspectives for digital success
Although the ‘fog’ experienced in the past few years around strategic options is lifting, there is more to be done, according to PwC, which adds that today’s challenge is in the implementation of those digital strategies.
Successful players will need to reshape their businesses around three perspectives, according to the report: understanding the connected consumer through data analytics while heeding concerns over privacy; devising new business models to reinvent the value proposition of advertising and content; and developing the organisational models and collaborative capabilities to drive revenues from new behaviours.
The global television subscription and license fee market is forecast to increase to US$ 290.6bn in 2016, giving a compound annual growth rate (CAGR) of 6.2 percent.
Saturation and OTT competition to limit TV subscriber growth in North America, EMEA
Approaching saturation and competition for over-the-top services (OTT) in North America, and competition from free digital terrestrial television (DTT) in EMEA, will limit subscription spending growth in those regions.
Meanwhile, continued expansion in the subscription household universe in Asia Pacific and Latin America will drive subscription spending in those regions.
High-definition, video-on-demand, TV Everywhere and DVR services are driving subscriber retention and acquisition, along with broadband enhancements, states PwC. Smartphone and tablet penetration growth and fourth-generation (4G) rollouts will expand mobile TV, though usage will be largely advertiser-supported or included in TV Everywhere packages and funded by TV subscription providers to help them retain subscribers.
Colombia to lead LatAm TV subscriptions
Colombia was the leading Latin American market for TV subscription and license fee spending in 2011, followed by Brazil and Mexico. PwC expects Brazil to be the fastest-growing market in the region during the next five years, with a projected compound annual increase of 14.4 percent, which will see Brazil pass Colombia in 2012.
Subscription spending comprises 85 percent of the total market globally, and will increase at a 6.8 percent compound annual rate to 2016. Mobile TV subscription spending will grow at 13.3 percent from a much lower base, and public TV license fees will grow at a more modest 1.3 percent annually.
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