2019 Global Entertainment & Media Outlook: 2019-2023

Global Entertainment & Media
Outlook: 2019-2023

PwC | Global Entertainment & Media Outlook
Contents
2
Perspectives from the 2019 Outlook
1
04
Overview – Global E&M macro trends
2
07
Segment review – Spotlight on India
3
12
Q & A
4

Perspectives from
the 2019 Outlook

PwC | Global Entertainment & Media Outlook 4
Getting personal: Putting the me in entertainment and media
• The rise of increasingly personal and personalized
media interactions, as today’s consumers—eager,
highly selective, and voracious—seize the
opportunity to enjoy media experiences uniquely
tailored to their own preferences, contexts, and
schedules
• Consumers are using an expanded array of
connected devices to organize, curate and
discover their own unique world of media. In
response, companies are tailoring their offerings to
revolve around personal preferences, using data and
usage patterns to pitch their products not at
audiences of billions, but separately at billions of
individuals
• The increasingly individualized world brings major
implications for every E&M business across every
segment
Global Entertainment & Media Outlook perspectives
2019 Outlook perspectives

The rise of instant gratification: Need to engage consumers in
the moment, meet them where they are
5
Meet consumers where they spend time…
Shifting behaviors are
forcing content
creators and
distributors to devise
new ways of engaging
with consumers
In voice, voice-
commerce ( V-
commerce)
Online, shoppable ads
On social media,
influencers and social
media ads
In games, marketing
on esports and gaming
On audio, audio
streaming service
providers
On OTT, blending OTT
and e-commerce
Customers are increasingly preferring to construct their own media menus and
consume content at their own pace.

The value of personal data is rising as we are entering an era of
increasing personalized content
6
AI is on the rise
Boosting the value of
personal data
4G is impacting across TMT
value chain
VR/Cloud Gaming and
similar other business -
introduction of 5G
Trust has become a central theme in this age of personalisation

Overview – Global
E&M macro trends
Global summary and macro trends

Global trends shaping the E&M market : seven key trends
Source: PwC Global Entertainment & Media Outlook 2019-2023, www.pwc.com/outlook
China will overtake the US to become the world’s largest smart speakers market by 2021
Asia Pacific will overtake North America as the largest OTT region by 2021
By 2023, marketers will allocate more than 50% of their budgets to digital advertising
Over the next five years, China's absolute growth will exceed that of the US for the first time
Mobile video Internet advertising is becoming increasingly important vs. total wired display
Mobile soars, with smartphone data consumption overtaking that of fixed broadband in 2020
In 2018, mobile Internet advertising revenue outweighed its wired equivalent for the first time1
2
3
4
5
6
7

The Global E&M market to reach US$2.6trn by 2023, Digital
to account for a larger share of the industry’s income
Global E&M revenue and nominal growth forecast for next 5 years*
Note: All figures are reported in nominal terms reflecting actual spending transactions and therefore include the effects of inflation
40.7% 43.9% 47% 50.5% 53.1% 55.4% 57.3% 58.9% 60.3% 61.3%
0.00
0.50
1.00
1.50
2.00
2.50
3.00
2014 2015 2016 2017 2018 2019 2020 2021 2022 2023
Revenue$trUSD
Digital revenue as % of total revenue
1.7
1.8
1.9
2.0
2.1
2.2
2.3
2.4
2.5
2.6
Reaching over
60% in 2022

In terms of individual segment market size as % of global E&M
revenue, Internet advertising will see the largest gain
Segment 2018 actual 2023 forecast 2018 actual 2023 forecast
Internet Advertising 12.3% 15.8% 3.1% 4.1%
TV and Video 11.6% 9.1% 26.6% 27.3%
B2B 8.9% 8.3% 3.3% 2.7%
Newspapers and consumer
magazines
8.5% 6.2% 10.6% 7.2%
TV Advertising 7.5% 6.6% 10.6% 10.3%
Books 5.6% 4.8% 14.0% 10.0%
Video games and esports 5.4% 6.0% 2.8% 4.0%
Music, radio and podcasts 4.6% 4.3% 2.2% 2.4%
Cinema 2.0% 2.1% 4.5% 3.9%
OOH 1.8% 1.7% 1.2% 1.0%
OTT Video 1.7% 2.7% 1.7% 2.7%
VR 0.1% 0.2% - -
Share of E&M revenue by segment: 2018 vs. 2023
Note: The above table does not include Internet access data. 2018 is the latest available data. 2019-2023 values are forecast projections
Global India

(2.3)
(0.7)
1.2
1.5
2.7
3.2
3.3
4.4
5.9
6.5
9.5
13.8
22.2
3.1
11.83
4.18
10.71
6.93
13.54
8.09
8.51
16.02
18.89
17.75
21.82
-5 0 5 10 15 20 25
Newspaper and consumer magazines
Traditional TV and home video
Books
TV advertising
Business-to-business
Music, radio and podcasts
Out-of-home
Cinema
Internet access
Video games and e-sports
Internet advertising
OTT
VR
2018-2023 CAGR %
India Global
11
All segments in India are growing faster than Global; OTT
video to be the fastest growing at ~22% CAGR through 2023
Segment wise Growth rate (%) CAGR 2018 - 2023
Note: 2018 is the latest available data. 2019-2023 values are forecast projections
Segment overview: India v/s Global summary
Unlike in India,
Traditional TV and
home video globally is
showing negative
growth for the first time

Segment review –
Spotlight on India

India to remain the fastest growing territory, surging at a CAGR
of 11.28% to reach US$64 Billion by 2023
India: Summary
13.5%
17.8%
18.9%
21.8%
11.3%
Music, radio and podcasts
Internet advertising
Video games and esports
OTT video
Overall E&M sector in India
Revenue growth (2018-23 % CAGR)
Overall sector vs Top 4 segments in terms of CAGR %
(excludes internet access)
• India’s OTT segment set for rapid growth as
North America, the world’s biggest OTT market
becomes increasingly mature
• India to move into the top ten global gaming
markets by consumer revenue by 2023.
• Backed by a rapid growth in Internet and
smartphone penetration, India is set to be the
second fastest growing internet advertising
market after Indonesia.
• India’s music, radio and podcasts market is ripe
for growth. The growing adoption of
smartphones and smart speakers will make all
forms of audio increasingly accessible to
listeners in the coming years.
Key highlights - India

India’s OTT video market will nearly triple in size and surpass
South Korea to become the eighth-biggest market by 2023
• Improving data affordability and
accessibility has made India an attractive
destination for international players.
• Backed by attractive subscription rates,
localized content and bundled packages,
Subscription video on demand (SVOD)
witnessed a 64% YoY growth in 2018.
• This segment is further expected to grow
at a 23.3% CAGR from US$537mn in
2018 to US$1.5bn in 2023.
Regional 2018 revenue and growth: historical vs. forecastOTT video segment revenue 2014-2023 (US$ Bn)
38.2
45.2
72.8
2018 2019E 2023
0.6
0.8
1.7
2018 2019E 2023
NORTH
AMERICA
EMEA
APAC
LATIN
AMERICA
UK
INDIA
8%
10%
12%
14%
16%
18%
20%
22%
24%
26%
0% 15% 30% 45% 60% 75%
2018-2023CAGR
2014-2018 CAGR
Deep dive: OTT video
84% 86% 89%
16% 14% 11%
0%
20%
40%
60%
80%
100%
Subscription VOD Transactional VOD
Subscription VOD vs transaction VOD
(% share of overall OTT market)
80% 81% 85%
20% 19% 15%
0%
20%
40%
60%
80%
100%
IndiaGlobal
IndiaGlobal

While OTT video market is rapidly growing in significance, TV
subscription will remain by far the biggest market in India.
• In India, cord cutting is not happening as
much as it is in the US
• Growth in OTT video will continue to
outstrip the growth rate of TV subscription
and cinema, as major players such Netflix
and Amazon set sights on India for their
next cycle of subscriber growth.
• The rise of OTT services has galvanised
operators into launching premium
products and enticements such as Ultra
HD, 4K, video-on-demand services and
next-generation set-top boxes.
8.5%
11.9%
21.8%
Cinema
TV subscription
OTT
20%
11%
5%
8%
5%
1%
10%
9%
8%
12%
14%
19%
70%
79%
87%
81%
81%
80%
2023
2018
2014
2023
2018
2014
OTT Cinema TV subscription
TV subscription, OTT, cinema: % revenue share of
combined video content segment)
Video content revenue growth % CAGR 2018-2023: India
Deep dive: OTT video
India
US

Internet advertising continues to grow as media players and
advertisers shift greater attention to online distribution
Note: 2018 is the latest available data. 2019-2023 values are forecast projections
Internet advertising revenues vs other advertising revenues, 2014 vs. 2023 (% share)
2014 2023
Internet
advertising
27.0%
Other
advertising
73.0%
Internet
advertising
54.7%
Other
advertising
45.3%
Global
Internet
advertising
11.0%
Other
advertising
89.0%
Internet
advertising
22%
Other
advertising
78%
India
Deep dive: Internet advertising
• Total Internet advertising revenue for
India in 2018 was US$1.2bn,
expected to reach US$2.6bn by 2023.
• While in India, Internet advertising
happens to be the fastest growing ad
segments, TV advertising will still hold
the largest share of ad revenues
throughout the Outlook period.
• India’s TV advertising will become the
world’s top TV advertising markets
overtaking the UK, Germany, France
and Brazil during this period.

Music, radio and podcasts an “emerging” segment in India; to
surpass US$1.5 Billion by 2023
• With streaming services finally germinating, music to be a fast growing segment at a 13.8%
CAGR, to hit US$0.7bn by 2023.
• According to the International Federation of the Phonographic Industry (IFPI), 96% of
smartphone users in India are using their devices to listen to music, highest rate in the
world. This figure climbs to 99% for 16–24-year-olds.
• Ease of voice search coupled with increasing penetration of smart speakers will further drive
revenues over the next 5 years.
Deep dive: music, radio and podcasts
Sub-segment wise revenue (US$ Mn): India
0
100
200
300
400
500
600
700
800
2014 2015 2016 2017 2018 2019 2020 2021 2022 2023
Radio Music Podcast Advertising
11.5%
13.8%
58.9%
2018-23
CAGR
Digital music streaming
CAGR = 24.27%
Music, radio and podcasts segment revenue
2014-2023: Global vs India
87
100
117
0
20
40
60
80
100
2014 2018 2023
Revenue$bnUSD
Global
0.6
0.8
1.6
0
1
2
2014 2018 2023
Revenue$bnUSD
India
Note: * defined as people who listened to at least one podcast in the last month

25%
12%
70%
85%
4% 3%
0%
20%
40%
60%
80%
100%
2018 2023
E-sports
Game Advertising
Social/ casual games
Traditional gaming
18
By 2023, App-based social/casual gaming to account for 85%
of India’s US$2.5 Billion video games & esports market
0
500
1,000
1,500
2,000
2,500
2014 2015 2016 2017 2018 2019 2020 2021 2022 2023
US$Mn
Social/ Casual Traditional
• The growth in social/casual gaming is
attributable to app-based gaming, as
browser-based games continue their
decline.
• Growth will continue for the category as
the smartphone user base expands.
• Data usage is expected to rise from
1.4GB for each active phone a month in
2016 to 7GB by 2021.
• India’s esports segment is small at
present. However, improving online
infrastructure and rising sponsorships
may provide impetus for growth.
Video game consumer revenue (US$ Mn): India
Deep dive: video games and esports
% Share of sub-segment revenue: Global vs. India
Global India
44% 42%
52% 53%
4% 4%
0%
20%
40%
60%
80%
100%
2018 2023
US$2.1 Bn
US$0.3 Bn
<1% <1%

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2019 Global Entertainment & Media Outlook: 2019-2023

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2019 Global Entertainment & Media Outlook: 2019-2023