Digital Entertainment and Media Poised for Huge Growth

If entertainment producers have questions about the growth of demand for digital products, PricewaterhouseCooper (PWC) has some answers. The latest PWC release predicts rapid growth for both digital content and advertising in the entertainment and media (E&M) sector.

Globally, spending on E&M should reach $2.1 trillion by 2016. That number reflects a 5.7% compound annual growth rate. Figures for the U.S. market are a little more conservative. With steady growth of 5.2% CAGR, the U.S. E&M sector will expand to $597 billion by 2016. As a result, digital will comprise 31.5% of the E&M market by 2016.

Here’s a snapshot of the growth rates of U.S. E&M sectors through 2016:

  • Recorded music: 5.5%
  • Internet access: 9.3%
  • TV subscriptions: 5.4%
  • Video games: 4.1%
  • Consumer magazine publishing: 1.6%
  • Consumer/educational book publishing: 1.1%

Because many E&M companies rely on advertising for part of this revenue, PWC analysts say that these marketers must increasingly emphasize managed advertising – “the orchestrated use of social media, such as engagement with bloggers.” Even as marketers invest in earned advertising, they’ll also be fueling spending in paid advertising to the tune of $229 billion by 2016. Double-digit growth will be realized in the online and video game ad segments during that time period.

The steady business shift has marketers scrambling to deploy the right business model. Doing so means addressing these critical elements:

  • The need to understand the behavior and motivation of connected consumers.
  • The new value proposition for distributing advertising is all about using paid, earned and socialized messaging to the best advantage.
  • Until now, digital teams at many organizations have operated separately. To excel in the digital world, these teams must be assimilated into the organization.

The leaders in the E&M sector are doubtless already adjusting their business models to succeed during the digital transformation.

[Source: Global Entertainment and Media Outlook 2012–2016. Pwc.com.12 Jun. 2012. Web. 18 Jun. 2012]
Kathy Crosett
Kathy is the Vice President of Research for SalesFuel. She holds a Masters in Business Administration from the University of Vermont and oversees a staff of researchers, writers and content providers for SalesFuel. Previously, she was co-owner of several small businesses in the health care services sector.