Despite 18 months of pandemics, lockdowns and uncertainty, the Australian media landscape is showing positive signs, according to PwC’s annual Entertainment & Media Outlook.
The report points to challenges around shifting consumer consumption habits, regulatory changes and power moving to the consumer, however it suggests that the current “volatility masks a certain stability”.
“The pandemic triggered the sharpest contraction in Australian entertainment and media revenues in the history of the report. While the contraction impacted the whole market, it was clear that some sectors were hit harder than others,” said PwC Australia Partner and Australian Entertainment and Media Outlook Editor Justin Papps.
Digital advertising stands tall
One sector that did perform particularly well was internet advertising, which saw an increase of 3.3 per cent to grow to $9.3 billion. This was led by the retail sector’s pivot to eCommerce in light of the pandemic.
Video was the fast-growing digital advertising segment, according to PwC, driven by new opportunities across CTV, TikTok and Twitch.
Programmatic also saw a surge in popularity during the pandemic, as advertisers searched for flexible ways to book campaigns.
Internet advertising growth is predicted to continue growing to reach $12.3 billion by 2025.
Non-advertising platforms grow
And while digital advertising has helped advertisers continue to reach consumers as their consumption patterns change, the continued shift to subscription platforms could present a challenge in the long term.
PwC Australia Partner Samantha Johnson said: “One of the most profound impacts we’ve seen from digital disruption in recent times has been the increased use and prevalence of non-advertising supported platforms.
“The shift in weighting from advertising revenues towards consumer-generated revenues has accelerated, forcing a number of key players to rethink their business model, in a world where the expectation is that consumers can access an ad-free or personalised service, but they have to be prepared to pay for it.”
According to the data, Streaming Video on Demand (SVOD) revenues will grow at a 20.4 per cent CAGR based on the midpoint forecast scenario through 2025.
While internet advertising performed strongly, certain sectors were hard hit during 2020. Cinema had a 41 per cent fall in revenue from $2.2bn to $1.3bn and the Out-of-Home advertising sector was down39 per cent from $1.3bn to $772m.
According to PwC, this reflects the need for businesses to adapt to changing consumer behaviours and industry trends.
“The powerful shift to digital consumption will provide a strong boost to global growth in these industries for the next several years. As companies race to meet consumers where they are with an ever-expanding range of products, services, and experiences, the entertainment and media industries will grow more pervasive, more immersive, and more diverse,” said Johnson.
Papps added: “As we emerge from the pandemic, industry players who take stock of the shifting environment, and evolve their strategies and business models to embrace the new consumer behaviours, will come out on top.”
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