This time it’s personal: The PwC Global Entertainment & Media Outlook 2019-2023

PwC’s 20th Global Entertainment and Media Outlook 2019-2023 examines the ‘me’ in entertainment and media as consumers get personal with their consumption. Find out what’s happening in the industry, from streaming and podcasting, to movies and eSports.

It’s that time again, PwC’s Global Entertainment & Media Outlook is upon us! This year, the report dives into the rise of the personalised media interaction as “consumers — eager, highly selective and voracious — seize the opportunity to enjoy media experiences tailored to their own preferences, contexts and schedules.”

Looking at 14 segments and 53 territories, the 20th annual Outlook examines how companies are turning to personalisation, tailoring their products and business models to the individual consumer. By using customer data and usage patterns businesses are now able to pitch their products “not at audiences of billions, but at billions of individuals.”

It’s time to tailor

Industry spend is continuing to rise at a rate faster than overall economic growth, at a projected 4.3% compound annual growth rate (CAGR) through 2023, driven by consumer empowerment. The desire and ability of consumers to curate their own media experiences is leading to a wealth of activity. Using smartphones and other personal devices, customers are choosing their own media — such as over-the-top (OTT) services like Netflix Disney+ or Australia’s Stan — to watch what they want, when and where they want to watch it.

Companies that have been paying attention are changing strategies. Offerings and business models are pivoting from broadcast models to those that fulfil tailored preferences. And being digital, they have the data to it. Entertainment and media businesses who use this data to understand their users’ experience — say for instance, where they are consuming media such as on public transport, in the car, or listening while walking the dog — will be able to design better products, advertising and ultimately, a healthier bottom line.

Global Entertainment and Media Outlook

Personal is private. Or is it?

Audiences, the report finds, are changing their viewing behaviour. While the shift in consumption is one that is a culmination of change rather than the beginning of one, it is still difficult to classify it definitively. While media consumption is undeniably becoming more personalised, it is also at the same time counter-intuitively social. While people bop along to the latest beats through Apple Airpods and noise-cancelling headphones, or make use of public-transit time to watch smartphone screens only they can see, there is also a social dimension to today’s consumption.

Ticket spend at movie theatres in 2018 was up 5.2% from the year before, and is projected to rise at 4.3% CAGR through 2023. Cinemas, responding to mega-budget films, such as Marvel’s Avengers, are investing in experience. Luxurious, high-quality screening facilities with ticket price increases that are off-set by subscription schemes are forecast to become increasingly popular. Live music revenue globally totalled US$27bn, and is also set to increase at a 3.1% CAGR through 2023.

Whether they act alone or together, consumers are done with passive consumption. Their increasingly personalised worlds are backed up by AI-driven recommendation engines that bring a fresh stream of pre-vetted content to their door. Consumers, empowered with the ability to construct their own media landscape from various streaming services, are rejecting pre-bundled options from cable and satellite companies. While it is no match for the spend of those incumbent players, OTT revenues are still projected to rise at 13.8% CAGR, and in fact double, to US$72.8bn by the end of the forecast period.

Global Entertainment and Media Outlook

A business approach

With the multitude of options now available to consumers, how then should business react? It’s clear that one size will not fit all, and these personal, actively shaped E&M experiences will need to be framed and developed in different ways than in the past.

Some will pursue an ‘all-you-can-eat’ Spotify or Netflix style model, in which consumers pay a fee to access as much as they want. It’s a model that is fuelling the global boom in data consumption.

Others may pursue differential pricing, such as privileged membership packages and subscription tiers. Amazon and Alibaba, for example, offer memberships in which E&M content and services are just one entry point, and one item, of the multiple services on offer.

Geographically, companies are also adapting their models to individual countries dependent on economic circumstances and consumer habits, and the differences can be stark. For example, the report illustrates that the projected growth rate of digital advertising in Nigeria through 2023 is almost three times that of Germany. And no longer is E&M revenue following the trend led by the US. For example, while cinema box office rose in the US, it declined in Western Europe.

“Indeed,” the authors say, “never before has the global E&M market so firmly resisted easy characterisation, even as the world becomes wired more closely together.” Strategies cannot rest on generalisations anymore, and they, like consumer desires, must be tailored.

To add another dimension of complexity, the fragmentation of available E&M options to consumers, while helping to create personalised content experiences and cord-cutting, is also driving frustration. Creators, marketers, advertisers and consumers are overwhelmed by choice. Most consumers only spend time on a small number of the many platforms they have access to. Over half said they wished they could pay one fee for all the video content they watched, and a similar number wished it could all be found in one place, according to a recent PwC report. Opportunities exist, therefore, for those in the aggregation business.

I’ll have what she’s having

The rise in adoption of voice assistants in the smart home (smart speakers are set to rise at 38.1% CAGR, reaching 440 million devices worldwide by 2023), means consumers are increasingly expecting convenience like never before. Without so much as lifting a finger, customers are able to buy whatever they desire as soon as they think (and speak) it.

Global Entertainment and Media Outlook

Advertising too is targeting this instant gratification shop. Increasing amounts of online adverts on social media and within apps and e-commerce sites are now ‘click-and-buy’ enabled. Interactive shoppable video, YouTube videos and Instagram posts are all creating a world where marketers must go beyond advertisements. This is being reflected in the rise of the influencer movement, despite its various ethical setbacks.1

Social media, meanwhile, is not the only place that individuals are gathering in great numbers. eSports and gaming continue to grow, with an eye on areas such as mobile payments. Audio consumption too is on the rise, with podcasts and music streaming coalescing with smart speaker and connected car trajectories.

Global Entertainment and Media Outlook

Knowing where consumers are aggregating and what they’ll expect, and accept, when they’re there will be a key ingredient for E&M company success.

The personalisation wave

With AI on the rise and the value of personal data being increasingly understood (and even monetised) by consumers, regulation around data privacy and protection is also on the rise. Trust will be a central concern, and indeed a strategic one, in the relationships between entertainment and media companies and their customers.

Individuals are rethinking how they relate to companies, and the standards of how companies relate to individuals and vice versa will continue to evolve. Trust will be built on transparency, respect, and importantly, the value that is seen to be gained from sharing personal data. This means that the current landscape is not an easy one to navigate.

For those willing to do so, the new personalised world is one of opportunities. Really knowing who their customers are and being able to give them the experience they want will be critical to success. Businesses may need to transform, change their position on value chains, innovate or acquire others to help them in this task. Without question, they will need to continually build technological capabilities to keep up with the competition in a contextually changing world.

As consumers embrace the expanding ways to enjoy E&M experiences according to their own preferences, it’s time for entertainment and media companies to get personal.

For access to the industry data from 14 entertainment and media segments and the complete insights report, visit the Global Entertainment & Media Outlook 2019-2023.


Wilson Chow

Wilson is a partner and PwC's global TMT lead, PwC China