PWC study: Media and entertainment industry grows thanks to digitization
Globally, two-thirds of the media and entertainment industry’s growth over the next few years will be driven by the digital sector. This global trend also applies to Switzerland, as shown by the PWC study «Swiss Entertainment & Media Outlook 2012–2016.».
Consumers will spend around 2.3 percent more annually on media, entertainment and Internet access: from CHF 12.6 billion in 2011 to CHF 14.1 billion in 2016. Time-shifted TV consumption is one of the biggest challenges for TV advertising. Spending on TV advertising will grow only slightly from CHF 735 million in 2011 to CHF 803 million in 2016. Although consumer magazines are increasingly available digitally, spending will fall from CHF 1.1 billion in 2011 to CHF 921 million in 2016.
Most of the forecast growth will come from the "Mobile Internet Access" segment. The corresponding revenues will increase by 21.6 percent annually and will reach CHF 2.1 billion in 2016 (2011: CHF 784 million). By 2016, 9.3 percent more will be spent annually on Internet advertising, so that expenditure will rise from CHF 769 million in 2011 to CHF 1.2 billion in 2016.
Changed TV consumption
"In the TV and video sector, providers of time-shifted and individually orderable programs are causing a change in user behavior," explains Patrick Balkanyi, Partner and Industry Leader Technology, Telecommunications, Infocomm and Media at PWC Switzerland. Spending on TV fees and licenses will grow from CHF 2.1 billion to just over CHF 2.2 billion over the next five years, an annual increase of 1.5 percent. In 2011, the sector had still grown by five percent. "New forms of TV consumption are also influencing the corresponding advertising revenues. Time-shifted TV consumption is one of the biggest challenges for TV advertising," Patrick Balkanyi continues. By 2016, TV advertising spending is expected to grow from CHF 735 million in 2011 to CHF 803 million in 2016.
Analog is followed by digital
The Swiss market for music files is growing steadily over the next few years, following a slight decline in 2011. In 2011, consumer spending was CHF 891 million; in 2016, it is expected to be just under CHF 1.1 billion. "Physical sound carriers continue to lose ground in favor of digital files and inexpensive streaming offerings. The same applies to the film segment, where digital downloads are on the rise, thanks mainly to mobile players," says Bogdan Sutter, Head of Digital Transformation at PWC Switzerland. In 2016, Swiss people will spend CHF 643 million in the movie segment (2011: CHF 562 million). Digital downloads will grow from 50 million to 188 million Swiss francs in the same period. The video and online games segment is one of the smaller revenue generators in the entertainment and media industry, but will record proud growth averaging 5.4 percent over the next five years. In 2016, projected spending will be CHF 531 million (2011: CHF 407 million).
Modest radio and outdoor advertising
The radio market had grown by 1.4 percent to CHF 599 million in 2011. By 2016, spending will increase by just 0.9 percent a year, bringing it to CHF 628 million in 2016. Outdoor advertising is also expected to grow modestly by an average of 1.9 percent over the next five years, generating sales of CHF 720 million in 2016 (2011: CHF 655 million).
Declining spending on magazines and newspapers
Although consumer magazines are increasingly available digitally on the web, smartphones and tablet devices, spending will fall from 1.1 billion in 2011 to 921 million Swiss francs in 2016. In the Swiss newspaper market, spending is expected to fall by 4.8 percent annually, leaving a turnover of CHF 1.7 billion in 2016 (2011: CHF 2.2 billion).
