Mediaboss Marketing

NEW YORK, June 12, 2012 /PRNewswire/ -- Record global sales of tablets and smart devices are underlining the rising revenue opportunities from digital delivery of entertainment and media (E&M) content and advertising to increasingly connected and mobile consumers. According to PwC's annual Global Entertainment and Media Outlook 2012-2016 an in-depth five-year outlook for global consumer spending and advertising revenues directly related to entertainment and media content released today, the industry is approaching the 'end of the digital beginning' with digital now embedded in business-as-usual and moving to the heart of many E&M companies.

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The Outlook forecasts that global E&M spending is expected to rise from $1.6 trillion in 2011 to $2.1 trillion by 2016, growing at a compound annual growth rate (CAGR) of 5.7 percent. The U.S. E&M market experienced the largest increase since 2007 with faster growth expected, growing at 5.2 percent CAGR reaching $597 billion in 2016, from $464 billion in 2011.

The report finds that growth in digital E&M spending will continue to significantly outpace growth in non-digital spending during the next five years. Digital spending is expected to account for 67 percent of all growth in spending during the next five years, globally. Digital spending in the U.S. is expected to account for 31.5 percent of all E&M spending in 2016, up from 21.7 percent in 2011.

"Change in consumer behavior is pervasive and accelerating and the E&M industry is in the front line of this change," said Ken Sharkey, entertainment, media & communications US practice leader, PwC. "The past uncertainty triggered by the digital migration has given way to a sharper focus of E&M companies on executing their digital strategies. While experimentation will continue, the way forward is becoming clearer as companies focus on identifying, choosing and executing the right business models, organizational structures and developing the skill sets to understand consumer behaviors and motivations in their connected, multi-screen environments."

According to the Outlook, the challenge ahead is in the implementation of digital strategies and the E&M industry is reshaping itself around three perspectives:

Understanding the connected consumer - To engage and immerse consumers in the connected multi-screen future, companies need to understand their behaviors and motivations. Data analytics tools are required to mine the mass of customer data. However, consumers' fears over privacy risk triggering a public and regulatory backlash. PwC believes that avoiding this will require a shift of industry mindset from 'customer ownership' to putting the 'customer in control.'

New business models to reinvent the value proposition of advertising and content - Digitally-derived insights are now redefining advertising and expanding its value proposition, enabling it to become paid, earned and socialized. This is driving new performance metrics, new roles for agencies and other participants in the value chain and new flexible pricing models.

Developing organizational models to harness new behaviors and grow revenues in the 'new normal' - To date, many E&M businesses have developed digital as an adjacent operating group, with separate infrastructure, solutions and staff. In the 'new normal,' this siloed approach no longer works. Companies are now embedding and integrating their digital operations into the main enterprise, driving improved profitability, scalability and innovation. Realizing these benefits means tackling challenges around right, royalties and piracy.

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Digital Now Embedded in 'Business-as-Usual' for Entertainment & Media Industry, Says PwC US