Total Media & Entertainment sector spending is expected to rise nearly 20% to $720 billion by 2020, driven mainly by gains in the Internet and mobile advertising sectors, according to a PricewaterhouseCoopers report.
In its Global Entertainment & Media Outlook 2016-2020, PwC sees strong growth for overall media spending from $603 billion in 2015 to $720 billion in 2020.
PwC estimates that Internet ad spending will rise 9.4% per year from $59.6 billion in 2015 to $93.5 billion by 2020. Mobile ad revenue is expected to grow from $3.5 billion in 2015 to $13.3 billion by 2020.
In the TV business, advertising revenue is expected to climb about 3.2% per year, from $69.9 billion in 2015 to $81.7 billion in 2020.
Internet access revenue is expected to rise to $181.7 billion over the forecast period (7.2% annually), especially as rich media like video drives increases in data traffic. PwC estimates that video will account for about 85.5% of all data traffic by 2020. Companies are making considerable investments to improve speeds and quality to enable both the traditional use of Internet access as well as streaming online television, videos, video games, and other media consumption. The need to profitably grow, increase scale, and engage users online is creating a very attractive M&A environment, according to PwC.
"Today's entertainment and media reality is one of companies intensely competing for dollars with the increasing proliferation of free online media alternatives. This global multi-speed media landscape has created unprecedented challenges for companies in the battle for customers and value," said PwC Global and U.S. Entertainment & Media Leader Deborah Bothun in a statement. "The acceleration of digital and technology innovation is expected to continue to force companies to innovate and reimagine the industry as we know it."
Globally, total media & entertainment revenue is expected to rise to $2.1 trillion in 2020 from $1.7 trillion in 2015, an annual growth rate of about 4.4%.
"For content providers across the entertainment and media industry, the message is clear: seamless delivery and a focus on the consumer experience is the formula for growth in today's evolved E&M business landscape," Bothun said in a statement. "With a clearer picture of what's ahead, savvy companies will be best positioned to embrace change and choose a path that allows them to look ahead with confidence."