Revenues for the Australian entertainment and media industry hit A$62.3bn in 2023, up 2.8 per cent year-on-year despite macroeconomic and sector-specific challenges. The 25th edition of PwC’s Australian Entertainment and Media Outlook revealed that it’s advertisers who harness the full value of digital media who are reaping rewards.
Louise King, PwC Australia partner and technology, media, and telecommunications leader, said this year’s report highlights the importance of adopting new technologies and taking calculated risks to meet the needs of the modern consumer.
“Back in 2013, digital advertising represented only 27 percent of the advertising pie. Over the next five years, it’s set to hit close to 80 percent. This speaks not only to the pace of change, but the success Australian advertisers have seen in shifting their strategies to better suit the tech-enabled world we live in,” said King.
“Several factors have driven this huge growth, but the ‘big gorilla’ remains in search – now bolstered by the rise of search activity on retailers’ e-commerce sites, such as Amazon, Coles, Woolworths, and eBay”.
Retail paid search advertising’s share of total paid search advertising rose 7.8 per cent to A$529 million in 2023. PwC expects retail paid search to grow by 23.0 per cent CAGR to reach A$1.5 billion by 2028.
Digital revenues not offsetting declines for broadcasters and media players
Broadcasters push to diversify revenue streams through streaming, subscription, and catch-up services is helping to drive growth, but PwC forecasts that Australian television and radio broadcasters will not make up declines in revenues on their traditional offerings over the forecast period, although the gap is closing.
“Broadcasters are definitely moving the dial by exploring new revenue streams. The key to staying competitive against international players will be continuing to invest in new products and services that appeal to Australian consumers and advertisers alike,” said King.
“This will include initiatives like FAST channels (free, ad-supported television streamed over the open internet), better cross-platform audience measurement, digital ad insertion into linear ad breaks, and new ways to monetise opted-in viewers and listeners directly”.
The shift to digital advertising has had clear impacts on traditional media. In 2013, printed newspapers, television, and radio took 60 percent of all advertising revenues in Australia. In 2023, those products captured only 20 percent of advertising revenues. PwC’s forecast is that by 2028, they will have shrunk further, representing 11 percent of the advertising market.
King notes that strategic challenges remain and uncertainties exist in the external environment that will require focus from the entertainment and media industry.
“We see this year as a pivot point. The Australian industry has always thrived on technological disruption, companies looking to succeed in this market will need to be bold in strategic risk-taking and move at-pace, capitalising on the digital growth the sector is seeing”.
2025 content boom incoming
PwC Australia is predicting next year will be a big one for advertisers, consumers, and media companies, with sector revenue tipped to grow by 3.4 per cent in 2025. High-impact, global events, including the resolution of the US actors and writer’s strikes, are expected to drive a resurgence in the volume of premium scripted content. Keystone programs for streaming services including Stranger Things (Netflix), The White Lotus (BINGE), and Severance (Apple TV+) are expected to return after a three-year hiatus.
As a result, PwC forecasts growth in box office spend and subscription video-on-demand revenues will accelerate in 2025, growing faster than the average of the previous two years. Another bright note is the growth of the Australian video games production sector. Of approximately A$4 billion in revenues in 2023, A$345.5 million is attributable to games developed in Australian studios, an increase of 21 percent on the previous year.
