Video, eSport, virtual reality …: what growth engines for media and entertainment?
With an average annual growth rate of 4.2% over the next 5 years, the media and entertainment industry is expected to grow less quickly than expert estimates. This is what emerges from report “Perspectives from the Global Entertainment and Media Outlook 2017-2021»Produced by PwC. For the 2016 edition of the report, the consulting firm was indeed counting on an average annual growth of the sector of 4.4%.
At the same time, the place of this industry in the world economy will decrease slightly. Media and entertainment revenues, which account for 2.54% of global GDP in 2016, will thus represent 2.39% of GDP in 2021. However, certain areas, such as video or digital advertising, will experience growth well above global growth.
6 areas driving the sector’s growth
Revenues from online videos will therefore grow 6 points higher than GDP growth between 2016 and 2021. For example, by 2021, these revenues will approach $ 20 billion in the United States, or 60 billion dollars. % more than in 2016, still according to PwC estimates. The differential between GDP growth and that of the sector will be 4.3 points for online advertising, 2.7 points for video games and 0.5 points for Internet access, largely driven by mobile since 2013.
Another booming field, eSports should generate 800 million dollars in revenue by 2021, an increase of 167% compared to 2016. The sector is notably driven by the United States, South Korea and the United States. China. The latest driver of the entertainment industry identified by the authors of the report, virtual reality will surpass the $ 10 billion revenue mark in 2021, 12.5 times more than in 2016.
Conversely, newspapers will see their annual growth rate be 8.3 points lower than GDP growth. The latter will see their incomes decrease by 15% between 2016 and 2021. This difference between the growth of the sector and that of the GDP is -6 points for magazines, -4.5 points for books and -4.2 points for traditional television.
India and China, exceptions in the market
Beyond these differences within the media and entertainment industry itself, the report also highlights strong geographic disparities. Thus, France, the United States, Japan, and even Germany are characterized by income levels above the world average, estimated at $ 41 billion in 2021, and by an annual growth rate of less than 4 , 4% per year. In these mature markets, players must find new sources of growth to maintain their dynamism.
In Spain, Switzerland, Finland and even Sweden, the situation is more problematic for the media and entertainment industry. Income levels are well below the world average, as are annual growth rates.
In countries such as Russia, Indonesia, Thailand and Pakistan, income levels will still be well below average in 2021, but annual growth rates are close to 8% or even higher. India, China, and to a lesser extent Brazil, are exceptions, with revenues exceeding $ 45 billion in 2021, and annual growth rates close to 10% per year for India. and China.