Media sector's digital future to be driven by mobile ads and video streaming, says PwC

As well as further growth in media technology such as video streaming and mobile advertising, a report into the sector's future by PricewaterhouseCoopers has predicted traditional shares events like live music and cinema trips will continue their recent resurgence.

PWC's entertainment and media outlook for the next five years, entitled "Beyond Digital", has calculated that global media sector revenues will rise at a compound annual growth rate of 5.1% over the coming five years, from US$1.74trn in 2014 to US$2.23trn in 2019.

The consultancy firm said the value of the UK entertainment and media market should hit £66.6bn in 2019 compared with £56.9bn last year, driven by the video games, online advertising and book publishing sectors.

With a wider worldwide focus on the impact of mobile phone growth, PWC estimated that more than half the world’s population will be connected to the internet on mobile devices, helping to propel total mobile internet access revenue to $431.5bn in two years’ time.

Another report issued by Ericsson this week predicted worldwide mobile subscriptions will overtake the global population, with a rise from 7.1bn in 2014 to 9.2bn by 2020, with more than two-thirds of Earth's population using a smartphone to watch videos and access news by that point.

Turning to advertising, total global advertising revenues, driven in part by mobile and video advertising growth, are forecast to rise at a CAGR of 4.7% to 2019.

Global digital advertising revenue will rise at a 12.2% CAGR against just 1.2% for non-digital advertising, with internet advertising the fastest-growing segment and overtaking global broadcast TV advertising in the period.

"A primary driver of digital advertising throughout the forecast period will be rapid rises in mobile and video internet advertising," PWC said.

Mobile internet advertising will surge at a 23.1% CAGR to 2019, overtaking display internet advertising globally in 2018, and supplanting paid search in the US in 2016 as the leading internet advertising category."

Other predictions from the report include that the rapid expansion in over-the-top (OTT) video services will supporting a shift from ad-supported to subscription-based consumption.

This is expected to help to limit a highly developed TV market country such as the US’s total broadcast TV advertising revenue to a CAGR of just 2.5% to 2019, while in a market such as Egypt, where OTT has gained less purchase, the CAGR will be 14.7%.

"As viewers migrate from traditional networks to digital alternatives, advertisers will follow, driving broadcast TV advertising’s share of global total TV advertising down from 97.2% in 2014 to 94.3% in 2019."

The abovementioned report from Ericsson predicted more than two-thirds of the world’s population will be using a smartphone to watch videos and access news by 2020, and almost two in three dollars set to be spent globally on internet services will be for mobile access not fixed line.

The tech company has heralded a “mass-scale transformation” of the mobile market owing to an increase in applications and falling costs of devices as the key factors driving connected devices.

Overall worldwide mobile subscriptions are expected to overtake the global population, with a rise from 7.1bn in 2014 to 9.2bn by 2020.

Ericcson said the growth will lead to new revenues for device makers and telecoms groups.