Online advertising and internet access are set to be the fastest growing segments of the Romanian media and entertainment market by 2018, according to this year’s edition of PwC’s study Entertainment and Media Outlook. Online advertising will register a 14.6% compounded annual growth rate (CAGR), reaching 141 million USD by 2018, while internet access will grow by 9.9% CAGR, from 841 million USD in 2014 to 1.18 billion USB in 2018.
Thus, internet access and online advertising will account by 2014 for more than 40% of the Romanian media and entertainment market, with TV subscriptions trailing a distant second (612 million USD by 2018).
Overall, the Romanian media and entertainment market will register a 5.2 CAGR, reaching 3.1 billion USD by 2018. Yet, the overall growth of the market masks very uneven evolutions of the different segments, with magazine publishing falling from 95 million USD in 2009 to only 25 million in 2018 (a CAGR of -12.5%), as well as decreases in expenditure for music purchases and out-of-home advertising (-9.7% and -1.7% CAGR respectively).
In the CEE, Russia and Turkey remain the fastest growing markets (9.5% and 8.7% CAGR respectively), while the Czech Republic, Poland and Hungary will all register slower growth rates than the Romanian market.
“It is worth noting that the growth scenario for the media and entertainment markets in Central and Eastern Europe has been scaled back compared to last year. This is due to the decrease in the projected growth rate of several emerging economies, including Turkey and Russia”, stated Florin Deaconescu, Partner, Leader Assurance Services for the Telecom, Entertainment and Media industry, PwC Romania.
While the Romanian entertainment and media market is set to grow at a steady pace in the next 5 years, it will remain the smallest market in the region in terms of overall value, with 3.1 billion USD, compared with Russia (42 billion USD), Turkey (17.5 bln. USD), Poland (12.6 bln. USD), Czech Republic (6.5 bln. USD), and Hungary (3.2 billion USD).
On a global level, total entertainment and media spending on digital (excluding expenditure on Internet access) is forecast to grow at a 12.2% compound annual growth rate (CAGR) between 2013 and 2018 and account for 65% of global entertainment and media spending growth – almost two out of every three dollars.
Mobile Internet penetration will reach 55% in 2018, which will help drive digital advertising to increase its share from 14% of total advertising revenue in 2009 to 33% by 2018. With Internet advertising growing at a 10.7% CAGR (compared to a total advertising CAGR of 4.4%), the industry is approaching a significant tipping point: in 2018, Internet advertising will be poised to level TV advertising. In 2009, TV advertising was double that of Internet advertising, but in 2018, Internet advertising will only be trailing TV advertising by a mere 20bn USD. In particular, significant gains in mobile Internet advertising are forecast with a CAGR of 21.5%.
Nine high-growth markets are powering global entertainment and media revenue. China, Brazil, Russia, India, Mexico, South Africa, Turkey, Argentina and Indonesia are markets to watch, collectively forecast to account for 21.7% of global entertainment and media revenue in 2018, up from just 12.4% in 2009. In the same year, a major tipping point will occur: China will overtake Japan as the world’s second-largest entertainment and media market, behind the US.
“Monetising the digital consumer will not just be about the application of technology. It will be about applying a ‘digital mindset’ to build the right behaviours, advancing from a digital strategy – to a business strategy fit for a digital age. This means getting ever closer to the customer – across the entire organization. We now see that mindset embedded in many entertainment and media companies. But the industry needs adopt more flexible business models. To do this, companies must exhibit three behaviors: targeting correctly the needs and behaviors of the consumers, forging trust with them; creating the confidence to move with speed and agility; and empowering innovation”, concluded Florin Deaconescu.
About the Outlook
PwC’s 15th annual update of the Global entertainment and media outlook 2014-2018, is a comprehensive online source of global analysis for consumer and advertising spend. With like-for-like, five-year historical and five-year forecast data and commentary across 13 industry segments in 54 countries, the Outlook makes it easy to compare and contrast consumer and advertising spend across segments and countries. Find out more at www.pwc.com/outlook
Segments covered by the Outlook
TV subscriptions and licence fees, TV advertising, Internet access, Radio, Out-of-home advertising,
Video games, Filmed entertainment, Newspaper publishing, Magazine publishing, Business-to-business, Internet advertising, Book publishing and Music.
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