The coming five years will see digital technologies increase their dominance across all segments of entertainment and media, as digital transformation continues to expand and escalate.
So reveals the first PWC South African Entertainment and Media Outlook report released yesterday in Johannesburg.
The report says that while the industry has a long history of experimenting and fragmenting in response to change, the current advances in technologies and consumer behaviour are unprecedented both in speed and simultaneous impact across all segments.
As a result, the industry will become more fragmented and diverse than ever before, the report adds.
Vicki Myburgh, South African Entertainment and Media Industry leader for PWC Southern Africa, says the entertainment and media (E&M) industry is recovering from the economic downturn and the resilience of E&M products and services during the recession is evident.
She says:”Across the world, it is evident that the speed with which consumers are transitioning to digital has been accelerating beyond the industry's expectations. In SA, while the spend on digital media is expected to grow significantly, it is unlikely that it will dominate in the forecast period.”
Non-digital revenue streams are expected to continue to be much larger and will still account for 69.1% of total South African spending in 2014, she says.
“This suggests that the way forward for E&M companies lies in using digital technologies to generate revenues from ongoing changes in consumer behaviour, while also maintaining and supporting their non-digital offerings as a valuable source of cash and customers.”
Mobile power
The rising penetration of smartphones and other Internet-enabled devices means the tipping point is fast approaching at which usage, subscription and advertising revenues for content services will migrate quickly towards mobile platforms, the report says.
These are usually supported by advanced next generation network infrastructure and enriched by a growing array of mobile applications, it says.
Myburgh says, globally, there were nearly 500 million people accessing the Internet through mobile devices in 2009, up from only 100 million as recently as 2005. “We project that by 2014, this total will rise to 1.4 billion.”
The expanding functionality of mobile devices is causing the focus of consumers' brand loyalty and trust to move away from the service or content provider towards the device itself and to the underlying content, she points out.
Consumers today relate to iPods, not generic portable music players; and to Kindles and iPads, not generic electronic readers. In previous generations, the device was more important than the brand of the device, she adds.
Internet dominance
Increasingly, the consumer has moved beyond thinking of the Internet as an end in itself, and expects all forms of media to embed the convenience, immediacy and interactivity of the Internet, says Myburgh.
“With the emergence of new generations of tablets and netbooks, the unified Internet-based consumption experience has taken another step forward.”
No segment of E&M will be immune to blurring with the Internet, she points out. “This trend will be further accentuated with the deployment of various next-generation networks in countries around the world.
With theoretical speeds of up to 100Mbps, this upgrade in infrastructure will not only provide greater access to video and interactive content, but will also accelerate digital migration.”
The outlook includes historical and forecast data on the Internet, television, film, radio, recorded music, consumer magazine publishing, consumer and educational book publishing, newspaper publishing, business-to-business publishing, out-of-home advertising, video games and sports industries. It gives a detailed breakdown of each of these sectors.
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