PwC: Digital Now Business As Usual for Media Companies

NEW YORK: Global entertainment and media spending will hit $2.1 trillion in 2016, up from $1.6 trillion last year, fueled by new revenue opportunities from the digital delivery of content and advertising, according to a PwC forecast.

Digital spending is expected to account for 67 percent of all growth in spending in the next five years, according to PwC’s annual Global Entertainment and Media Outlook 2012-2016. In the U.S. alone, the E&M market will reach $597 billion in 2016, up from $464 billion in 2011, the largest increase since 2007. 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, the entertainment, media & communications U.S. practice leader at 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.”

The challenge for media companies lies in the implementation of their digital strategies. PwC notes that companies must understand the connected consumer, develop new business models and implement new organizational models that recognize digital as being part of their business as usual. “By embracing digital as the engine of their business and using it to integrate and automate processes from content production to rights management, E&M companies are well positioned to meet the fast changing consumer demands through any channel and format more effectively and drive greater revenue growth than before,” Sharkey noted.