The 3.8% decline in global Entertainment and Media (E&M) revenue, from $2.1trn in 2019 to US$2.0trn in 2020, was the biggest year-on-year drop in the Outlook’s 22 years. But there were bright spots in a number of E&M segments created by shifting consumer demand.
From 2021 to 2025, PwC project global E&M revenue to grow at a healthy compound annual growth rate (CAGR) of 5.0%, taking industry revenues to $2.6trn in 2025.
VR the fastest growing E&M segment
Virtual reality (VR) is the fastest-growing E&M segment, albeit from a small base. Its revenues surged by 31.7% in 2020 to $1.8Bn and are projected to sustain a CAGR of 30%+ over the next five years to reach $6.9Bn business in 2025.
Digital streaming fuelling double digit revenues increase in Music and in-game events and concerts, to remain
Music is poised for robust growth following a massive 74.4% slump in live music revenues in 2020. We expect total music revenues to grow at a 12.8% CAGR over the next five years, fueled by digital streaming, which will expand to become a $29.3 Bn business by 2025, along with a return to live performances.
Restrictions on mass gatherings hit the live E&M sector hard. Conference centres, arenas and stadiums where shut down for much of 2020. Live music was the most affected by the pandemic with the huge revenue sink quoted above.
As a result, the sector was forced to adapt with creative solutions, such as drive-in concerts at former outdoor cinemas or large car parks. PwC’s Outlook considers these formats are viewed as a stopgap. Instead, many operators turned to virtual experiences as an alternative.
Gaming provides a ready-made marketplace for such events, and in May 2020, Minecraft staged an entire festival on its platform, demonstrating an opportunity to sell more music and merchandise through games platforms and making the most of this burgeoning sector.
From the universe to the metaverse
If universes are providing proprietary advantages now, the longer-term future may lie in the metaverse, a more open, multi-brand environment built around consumers.
The metaverse enables intellectual property owned by many different E&M companies to coexist on a single online platform: DC Comics’ Batman can interact with Disney’s Captain America while Travis Scott performs.
Fortnite developer Epic Games is among the front-runners in the metaverse concept. It was mentioned above, a good example of this metaverse concept was the festival staged by Minecraft on its platform in May 2020.
PwC explains that it’s all about meeting consumers where they are, rather than having them come and find you.
Huge growth forecast for video streaming, videogames and esports
Video streaming boomed in 2020 and its growth trajectory will continue.
Streaming video-on-demand (SVOD) is projected to grow at a CAGR of 10.6% to 2025, making it an $81.3Bn industry.
Video game and esports revenues continue their rapid ascent, reaching $147.7Bn in 2020, with a 5.7% CAGR projected to expand the segment to become an almost $200Bn business ($194.4Bn) by 2025.
Cinema rebounds but PVOD premieres during pandemic rewrote content providers-cinemas relationship for the future
Cinema revenues are projected to rebound in 2021 as lockdowns ease but will not recover to pre-pandemic levels until at least 2024.
Lockdown measures had significant impact on many E&M segments, most notably cinema, which saw a 70.4% collapse in revenues.
Although research shows that consumers still prefer the experience of going to theatres, the pandemic forced movie providers to turn to premium video on demand (PVOD) to fulfill their launch schedules, and this interest in PVOD has raised longer-term questions around the relationship between cinemas and content producers.
Successful PVOD releases demonstrated how PVOD can be a bundled increment to the ongoing direct-to-consumer trend, and that content providers with this capability can capture a larger share of a title’s consumer revenue.
The pandemic accelerated and amplified shifts already transforming the industry
Werner Ballhaus, Global Entertainment & Media Industry Leader Partner, PwC Germany, said: “The pandemic slowed the entertainment and media industry last year, but it also accelerated and amplified power shifts that were already transforming the industry. Whether it’s box office revenues shifting to streaming platforms, content moving to mobile devices, or the increasingly complex relationships among content creators, producers and distributors, the dynamics and power within the industry continue to shift. Our Outlook shows that the hunger for content, continued advances in technology and new business models and ways of creating value will drive the industry’s growth for the next five years and beyond.”
Among the main shifts to watch PwC quotes the generational shift (youg generations must be served an they are not keen on traditional media but in new media and gaming) and the regulatory shift as new regulations may pose risks for big digital platform’s development (click on the link below to read more on bothe shifts)
All those above are some data and forecast included in the PwC Global Entertainment & Media Outlook, with the accompanying “Power Shifts 2021-2025” published today by the consultancy firm PwC.
The Outlook includes five-year historical and five-year forecast data and commentary for 14 industry segments across 53 territories. Segments include books; business-to-business; cinema; data consumption; internet access; music, radio and podcasts; newspapers and consumer magazines; OTT video; TV and home video; as well as internet, out-of-home and TV advertising.
Read here below some other key insights and foretells from now to 2025 included in this report