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PwC: Entertainment and Media Reaches ‘End of the Digital Beginning’

Digital media and entertainment goods and services — from broadband and mobile Internet access to streaming videos and eBooks — will comprise nearly one third (31.5%) of all entertainment and media spending among U.S. consumers and end users by 2016, up from 21.7 percent in 2011, according to a new report from PwC.

The report — PwC’s annual Global Entertainment and Media Outlook 2012-2016 — also forecasts that global entertainment and media spending will rise from $1.6 trillion in 2011 to $2.1 trillion by 2016, representing a compound annual growth rate of 5.7 percent.

For service providers within the entertainment and media sector, the report confirms that digital distribution has entered a “business as usual” stage at many companies.

“The past uncertainty triggered by the digital migration has given way to a sharper focus of E&M companies on executing their digital strategies,” says Ken Sharkey, PwC’s entertainment, media & communications U.S. practice leader, in a statement. “While experimentation will continue, the way forward is becoming clearer as companies focus on identifying, choosing and executing the right business models, organizational structures and developing the skill sets to understand consumer behaviors and motivations in their connected, multi-screen environments.”

PwC notes that “digital maturity” varies widely among individual entertainment and media segments. For example, global spending on digital recorded music formats will overtake physical distribution in 2015, reaching 55 percent of total revenues in 2016. Global spending on online and wireless video games, meanwhile, will overtake console and PC games revenues in 2013. In contrast, the digital component of consumer magazines will account for only 10.4 percent of spending by 2016, up from 3.1 percent in 2011.

More findings from the report are here.

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