COVID-19 Speeds Up Shift to Digital Consumption in Entertainment, Media Sectors
The global entertainment and media (E&M) business has declined 5.6% from 2019, resulting in a loss of $120 billion in absolute terms, per consulting firm PwC’s annual Global Entertainment & Media Outlook report.
Delayed by three months in order to assess the effects of the ongoing coronavirus pandemic, the report however has encouraging growth signs for 2021, projecting that spending in the sector will grow by 6.4%. “Looking across the five-year forecast period, from 2019 to 2024, we’re forecasting overall revenue growth running at a 2.8% compound annual growth rate,” the report states.
The report notes that the COVID-19 pandemic has accelerated and amplified ongoing shifts in consumers’ behavior, pulling forward digital disruption and forging industry tipping points that wouldn’t have been reached for many years, and that digitalization has been intensified by social distancing and mobility restrictions. Consequently, the report projects a strong rise in the OTT market, forecasting it to almost double in size from $46.4 billion in 2019 to $86.8 billion in 2024. OTT revenues surged 26% in 2020, the report says.
Comparing cinema box office revenues with SVOD, the report projects that SVOD will overtake box office in 2020, and will be double its size by 2024. Global cinema revenues are projected to plunge 66% in 2020, and is unlikely to regain lost ground.
Werner Ballhaus, global entertainment & media industry leader at PwC, said: “It’s clear that COVID-19 has accelerated consumers’ transition to digital consumption and triggered disruptive change – both positive and negative – across many forms of media. Yet it’s equally evident that the E&M industry’s underlying strengths and appeal to consumers remain as strong as ever. While there will still be challenges for E&M companies as we move beyond the pandemic, the digital migration that it has pulled forward will also generate opportunities in all segments – not only those that have benefited from its impacts to date.”
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