Report: Covid sees big uptake in digital entertainment

In 2020, lockdowns and restricted living have driven people to flock to all forms of digital entertainment, although advertising has been hit by the pandemic

Australians have boosted their spending on TV and music streaming, esports and podcasts this year to see them through the COVID-19 experience, according to the PwC Australian Entertainment & Media Outlook 2020-2024. 

The Outlook, now in its 19th year, indicates consumer revenue is set to grow to A$50.6 billion in 2024 at a CAGR of 3.14 per cent, while advertising revenue is set to grow more modestly to A$17.9 billion in 2024 at a CAGR of 1.37 per cent. 

However, entertainment and media revenue is set to contract by 4.46 per cent to $57.4bn in 2020, although the industry’s fundamental growth trajectory remains largely positive after the disruption of COVID-19. Advertising revenue is set to fall to $14.9 billion in 2020 at a CAGR of -11.31 per cent, primarily impacted by pandemic-driven changes to consumption behaviour and the evolving appetite of advertisers for more measurable media investment. 

 “This result comes amid the sharpest fall in global entertainment and media revenue in the 21-year history of this research, with a global decline of 5.6 per cent from 2019 – more than US$120 billion in absolute terms,” PwC Australia partner and entertainment and media outlook editor, Justin Papps, said.  

“While the pandemic has had an unprecedented and varying impact, the entertainment and media industry has been going through significant change for years and the pandemic has, in the most part, simply accelerated and amplified ongoing shifts in consumers’ behaviour and in digitalisation, he said.  

Streaming continues to grow 

Streaming video on-demand (SVOD) continues to grow to $2.3 billion by 2024 at an impressive 16.15 per cent CAGR. The introduction of Disney+, Apple TV+ and Binge since the last report coincided with people spending much more time at home and the reduction of out of home entertainment options. All SVOD platforms took advantage of this opportunity with the release of content that will create new habits with consumers. 

“SVOD is one of the parts of the market that everyone is watching closely, largely based on their own consumption habits changing during 2020. As a market, we are spoilt for choice for streaming services and it will be interesting to watch how many services are retained by consumers once things return to normal,” said Papps.  

Digital newspaper consumption continues to grow 

PwC’s Outlook shows COVID-19 has driven record-breaking news consumption among Australians. Digital advertising and digital subscriptions are set to grow to A$928 million to 2024, at a CAGR of 5.64 per cent. 

“Australian newspapers have increased their value proposition as a trusted source of news content during the pandemic, with many local new publishers offering free coverage of the pandemic, regularly updated blogs and dedicated pages during the health crisis, and before that, the bushfires in early 2020,” Papps said. 

“There's also been an industry-wide focus on digital transformation and the monetisation of digital news formats in the Australian newspaper landscape.  The ability of the news media outlets to successfully convert newly acquired digital news audiences during the pandemic to subscription models will be central to future growth within the industry.”    

Transitioning to all things digital 

The pandemic has accelerated people adopting new digital services and platforms for entertainment. “Entertainment and media in Australia is becoming more virtual, streamed, personal and - at least for the time being - more centred on the home than anyone anticipated at the start of 2020,” Papps said. 

In particular, TV on demand will still reign supreme for the foreseeable future and is set to grow rapidly over the forecast period, reaching over A$501 million in 2024 and a CAGR of 24.87. This is followed by streaming video, which will continue to grow to $2.3 billion by 2024 at an impressive 16.15 per cent CAGR. Digitally distributed music including streaming will also surge to A$1.4 billion in 2024 and a CAGR of 10.3 per cent.  

And the interactive games segment is set to grow to A$4.4 billion in 2024, a 6.87 per cent CAGR, buoyed by growth in app-based games and esports as people have looked for alternative forms of entertainment during the lockdown period and while their favourite sporting codes were on hiatus.  

PwC said all digital platforms need to carry out the organisational transformation necessary to deliver growth. Consumer habits can take a lifetime to, learn but we’ve seen they can take a lockdown to lose, which means business must continue to adapt in parallel in their search for growth, said Papps.   

Follow CMO on Twitter: @CMOAustralia, take part in the CMO conversation on LinkedIn: CMO ANZ, follow our regular updates via CMO Australia's Linkedin company page, or join us on Facebook: https://www.facebook.com/CMOAustralia.

  

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