20 Dec 2017 | 06.39 am
Media Sector Growth Set To Slow
PwC Entertainment and Media Outlook
20 Dec 2017 | 06.39 am
The entertainment and media sector in Ireland is likely to grow by 3.3% each year through to 2021, according to the latest Global Entertainment and Media Outlook report for 2017-2021 from PwC.
The report says that global growth in the sector will average 4.2%, while the Irish results indicate growth averaging 3.3% over the four year period, which is a decline on last year’s prediction of 3.8%.
If achieved, the growth would be equivalent to revenues of €4.8 billion for the industry by 2021, fuelled primarily by increasing internet access and significant growth in internet advertising.
The growth projection incorporates all Irish E&M industry sectors including internet and out of home advertising, internet access, TV subs and licences, radio, video games, filmed entertainment, newspaper, book and magazine publishing.
According to PwC, growth in the Irish market lags the global forecast largely due to our significant growth in internet access being partially offset by the contraction expected in Irish newspaper publishing.
PwC believes that amid shifting consumer preferences, rapid advances in technology and ongoing disruption to business models, “the new strategic imperative for E&M companies is to turn customers into fans by innovating to create the most compelling, engaging and intuitive user experiences”.
PwC partner Amy Ball (pictured) commented: “Growth of 3.3% annually presents significant opportunities for the Irish E&M industry. This growth is primarily driven by growth over the period in internet access (33%), internet advertising (63%) and video games (32%). In particular, the rise of mobile internet advertising, tracking at 13% annually, will represent 40% of all internet advertising spend in Ireland by 2021. We see traditional newspaper publishing continuing to lose ground, with a decline of 5% annually over the period.
“As companies compete to create the most desired user experiences, advances in technology are at the heart of their strategies. Traditional entertainment companies are also increasingly competing with digital tech giants such as Amazon and Apple and subscription based streaming services such as Netflix.
“Combined with a great user experience, companies can harness technology and data to create a virtuous circle — one in which increasing consumer engagement and attention lead to the capture of more data and more insights into what users want. This understanding enables companies to further target and engage their core audiences, opening up new opportunities to generate revenue.”
Ireland’s total E&M market of €4.8 billion by 2021 includes digital and non-digital components of €2.3 billion and €2.5 billion. By 2021, says the report, digital revenue in Ireland will account for 48% of all E&M spend in Ireland. Forecast growth rates suggest that Irish digital spend will outpace non digital by 2023.
It looks grim for print media in the PwC report. Total Irish newspaper revenue is forecast to fall from €570m in 2016 to €440min 2021, a decline of circa. 5% annually.
Print circulation is on course to almost halve within the decade, PwC believes. Total average daily circulation is likely to decrease from 525,000 units in 2016 to 392,000 units by 2021, while free daily newspaper circulation will also decrease from 45,000 units to 16,000 over the same time period.
Internet advertising is expected to post solid growth over the forecast period, with total internet advertising revenue to reach €575m by 2021, a growth of 63% in the period. The internet video segment continues to grow and will overtake physical home video in revenue by 2019, PwC predicts. Satellite TV penetration in Ireland is set to remain constant at 41% through to 2021, while subscription TV penetration will increase from 66% in 2016 to 70% in 2021.