Digital growth in New Zealand’s entertainment and media industry continues to offset a flattening growth rate on traditional entertainment and media content, according to PwC’s Global entertainment and media outlook 2015-2019.
Spending on digital content is forecast to continue to grow at 10 per cent year-on-year to 2019, while spending on non-digital content will increase by just 0.13 per cent year-on-year, an improvement on last year’s forecasts which predicted an annual decline in non-digital content by an average half a per cent to 2018.
“For consumers it’s all about content experiences,” says Greg Doone, Digital Strategy and Data Leader, PwC.
“If digital is a simpler way of getting the content they will gravitate towards that. Given the wide variations in consumer tastes for content, the challenge for entertainment and media companies is to blend traditional intuitive approaches with data insights and to maximise the value of the experiences they offer.
“The prize for achieving this is heightened by the fact that the consumer has never been more up for grabs than today. Achieving greater levels of engagement with audiences will mean the advertising dollars will follow.”
Advertising growth is primarily digital, driven by mobile, and a fact underlined by internet advertising’s position as one of the fastest-growing segments of advertising at an average of 11.2 per cent year-on-year through to 2019, overtaking TV advertising as the biggest share of advertising by 2017.
PwC’s outlook forecasts the total entertainment and media industry in New Zealand will grow at an average annual rate of 3.8 per cent to 2019, compared to global growth of 5.1 per cent.
Over 32 per cent of all advertising revenues and 16.5 per cent of consumer revenues will be digitally sourced by 2019.
Looking across all segments in New Zealand to 2019, overall advertising revenues—will rise at a rate of 1.5 per cent year on year— less than consumer spending at a growth rate of 2.9 per cent year-on-year.
Consumers migrate to new media consumption behaviours
Underlying the trends in entertainment and media spending detailed in the Outlook is the migration by New Zealand consumers to new ways of consuming content.
One of the clearest shifts is in TV and video consumption, with consumers increasingly demanding high-quality original programming in a flexible, on-demand manner across numerous devices—thus enabling ‘binge viewing’ and greater convenience.
“Consumers never really regard any distinction between ‘digital’ and ‘non-digital’ as relevant,” Doone adds.
“They take on board the proliferation of content and access options enabled by digital, and exploit it to seek more flexibility and freedom in what, when and how they consume.
“It’s increasingly clear that New Zealanders see no significant divide between digital and traditional media: what they want is more flexibility, freedom and convenience in when and how they consume their preferred content.
“Consumers will call the shots more as they seek content experiences that are personally relevant to them.
Summing up the implications of this year’s Outlook for the industry, Doone believes that against a background of shifting infrastructure, New Zealand’s entertainment and media companies need to embrace the consumption experience as their critical success factor.
“What matters is the ability to combine content with a user experience that’s differentiated and compelling on the consumer’s platform of choice,” he adds.
“To achieve this blend, companies need to do three things: first, innovate around the product and the user experience; second, develop seamless consumer relationships across distribution channels; and third, put mobile at the centre.”