Mobile internet access subscriber numbers, a key driver of digital spending, will more than double during the next five years. They are estimated to reach 2.9 billion by 2016. Out of which, mobile internet subscribers in India will increase from a low base at a compound annual rate of 50.8 per cent to 2016, making it the fastest growth market for mobile internet in the world, according to the annual Global Entertainment and Media Outlook from PricewaterhouseCoopers.
“By 2016, global mobile internet advertising revenues of $24.5 billion will grow at 36.5 per cent compounded annually, to almost match the size of the classified internet advertising market. However, paid search at $78.1 billion and banner/display at $46.6 billion will retain the lion’s share of the market in 2016,” said the company in a press statement.
India to be among the top three fastest growing nations in newspaper publishing and OOH
According to the report, India will be among the top three fastest growing nations in newspaper publishing (9.6 per cent) and out of home advertising (10.9 per cent) by 2016.
The report points out that territories such as the United States (declining 1.4 per cent compounded annually to 2016, and expected to be worth 43.8 per cent less in 2016 than 2007) will show ongoing decline, but there will be strong growth in countries where the digital infrastructure is less mature, such as Argentina (11.9 per cent growth compounded annually to 2016), Indonesia (11.2 per cent), and India (9.6 per cent). While Indonesia, Russia, and India will be the fastest-growing countries for out of home spending through 2016, with CAGRs of 11.2 per cent, 11.0 per cent, and 10.9 per cent, respectively.
Global spending on entertainment and media projected to rise by 5.7 per cent
Over the next five years, global spending on entertainment and media is projected to rise from $1.6 trillion in 2011 to $2.1 trillion in 2016, a 5.7 per cent compound annual advance. This growth lags some way behind below the projected 6.6 per cent compound annual increase in nominal GDP over the same period, reflecting the ongoing shift from higher-priced physical distribution to lower-priced digital distribution.
According to the report, internet advertising will be the fastest-growing advertising category with a 15.9 per cent compound annual increase, followed by the small video games advertising market at 1.2 per cent. Television advertising will average 6.6 per cent compounded annually through 2016, out of home advertising will grow at a projected 5.0 per cent compound annual rate, followed by radio at 3.8 per cent compounded annually. The print segments—newspapers, consumer magazines, trade magazines, and directories—will average less than 3.5 per cent compounded annually.
It was interesting to note that the report expects the consumer magazine market to begin to increase in 2012 after a decline in the past four years. “Overall global spending on consumer magazines declined during the past four years, although annual decreases in 2010–11 were less than 1 per cent. The market is expected to begin to increase in 2012, averaging 1.3 per cent compounded annually to $80 billion in 2016 from $75 billion in 2011,” the press statement said.
The end of digital beginning
According to the Outlook, the challenge now for E&M companies in a world where digital is established as ‘business as usual’ – and in those markets where the infrastructure is suitably developed to support digital distribution and consumption – is to focus on planning out and executing their digital strategies.
“The various segments of the E&M sector are at different stages of digital development, but they are all embracing digital to meet the ever-changing demands of consumers effectively and profitably. Entertainment and media companies have reached what we’re calling the ‘end of the digital beginning’; they’ve made the commitment to a digital future, and are now striving to make the necessary changes to their products, distribution and organisations,” said Marcel Fenez, Global Leader, Entertainment and Media, PwC.
“For creative and media agencies, the rise of unpaid or earned media reflects an innovative new fusion of advertising, content and analytics, and presents an opportunity for sweeping change in their roles and business models. There are therefore opportunities for agencies to act as digital marketing and brand consultants, guiding their clients with insights into opportunities around the aggregation of data, socialisation and content – particularly as the historical distinction between traditional and digital disappears,” said the report.