Strong global entertainment revival forecast after $120b loss [report]

2020 will be a tough year for global entertainment & media (E&M) with a decline in spending of 5.6% from 2019, or US$120 billion, due to the COVID-19 pandemic.

Even in 2009, the dreaded year of the Global Financial Crisis, E&M spending fell by just 3.0%.

But recovery from the 2020 shockwaves will be rapid, says PwC’s Global Entertainment & Media Outlook 2020–2024.

Its projections show that in 2021, E&M spending will grow by 6.4%. 

Looking across the five-year forecast period, from 2019 to 2024, it is forecasting overall revenue growth running at a 2.8% compound annual growth rate (CAGR).

The underlying message throughout is that most of the 14 categories in the sector quickly reconfigured as shockwaves changed consumer behaviour – and made changes to allow them to stay relevant and grow in the next five years.

“The pandemic has accelerated and amplified ongoing shifts in consumers’ behaviour, pulling forward digital disruption and forging industry tipping points that wouldn’t have been reached for many years,” PwC says.

“Digitalisation, one of the major forces shaping all industries, has been intensified by social distancing and mobility restrictions. 

“As a result, the entertainment and media (E&M) world in 2020 has become more remote, more virtual, more streamed, more personal and – for now at least – more centred on the home than anyone anticipated at the start of the year.”

Global market revenue is tipped to reach $119.4 billion in 2024, with North America remaining the largest music market in the forecast period. 

The fastest growth will take place in Latin America, the smallest market by revenue, rising to $2 billion in 2024.

Streaming will continue to power as the predominant format. But as it extends to less-developed markets, it will need to go for a lower price point and hence generate less revenue.

Physical and downloads will continue their trend to irrelevancy because of streaming.

The live music sector will continue to consolidate, with larger players buying out smaller assets to broaden their reach. 

Traditional radio will get a boost from the growing number of new platforms and distribution routes, including smart speakers, the launch of 5G and cheaper mobile data packages.

One example of an E&M sector that will transform quicker than expected is the battle between cinema box office and subscription video on demand (SVOD). 

In 2015, box office revenue was three times that of SVOD. 

According to PwC’s prediction, SVOD revenue will overtake box office in 2020.

By 2024, it will be double the size of box office. With cinemas closed and movie productions delayed, total global cinema revenues are projected to plunge by almost 66% this year.

Cinema is not expected to recover this lost ground, but by 2024 its revenue is expected return to 2019 levels.

The smartphone will pull away as the leading individual device used by consumers to access the Internet globally.