Consumer spending on entertainment and media is expected to reach $2.23 trillion by 2019 worldwide, representing a 5.1% growth rate, according to a new report by PwC.
In the U.S., the largest market for entertainment and media, spending is expected to reach $723 billion by 2019, a 4.9% growth rate.
At this point, PwC says the distinction between digital and traditional media is irrelevant in the minds and wallets of consumers. Digital offerings create a bigger, more diverse content universe, and with digital accelerating delivery across platforms consumer choice is paramount.
While digital media is a significant contributor to spending, growing at an 11% rate in the U.S., PwC finds that traditional media remains resilient and the consumer still craves shared live experiences.
Advertising revenues in the U.S. will rise by 3.5% annually to $230 billion in 2019, according to PwC. Advertising on the Internet and in video games will grow 11.1%, with online advertising overtaking broadcast TV in the U.S. in 2018. Mobile Internet advertising will jump by 25.6% annually through 2019. Online video ad spending will rise 15% annually.
Advertising will also be shifting to over-the-top video services as viewers migrate to digital. Broadcast TV share of total TV advertising will dip to 91.6% in 2019 from 95% in 2014.
In its reports, PwC says companies in the entertainment and media business need to focus on three priorities to succeed: innovate around the product and user experience; develop seamless consumer relationships across distribution channels; and put mobile and increasingly video at the center of their consumer offerings.
“To succeed, E&M businesses will need to develop new capabilities as what matters most is the ability to combine content with a user experience that is differentiated and compelling on the consumer’s platform of choice,” said Joe Atkinson, leader of PwC’s U.S. entertainment, media and communications team. “This requires managing customer relationships not by distribution channel, but by adopting a holistic approach via segments anchored in richer user profiles and powered by deeper data and analytics expertise.”