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Global Entertainment and Media Outlook 2018-2022

Key trends in the Global and Russian markets

We are pleased to present the latest edition of Media Outlook 2018 (Russian industry version). In this report, you will find the key trends in the Russian and global advertising and entertainment markets, as well as interviews with leading Russian experts. You will also learn more about creative intelligence, the transformation of telecoms companies into entertainment operators, the triumph of big data and why eSports are becoming increasingly popular among viewers, gamers and businesses. Welcome to the new world of media and the new reality of the Russian market! 

Всемирный обзор индустрии развлечений

Global trends

The entertainment and media market is entering a new phase of development. The lines that once separated the entertainment and media, technology and telecoms industries are becoming more and more blurred.
  • New technology will reduce the costs of delivering content while simultaneously increasing the speed of access to increasingly personalised content.
  • Mobile devices become the primary means of accessing content and services for consumers across virtually all markets. 
  • AI technologies based on Artificial intelligence for analysing and personalising products and services are increasingly in demand.
  • Content creators are forced to compete and build partnerships with existing platforms, and to connect end customers through their own distribution channels.
  • The distinctions between segments are blurring, such as the distinctions between print and digital; video games and sports; terrestrial, cable and online TV; and social and traditional media.
  • Over the next five years, the compound annual growth rate (CAGR) for total costs in the entertainment and media market will be 4.4%.
  • Within this increase, the fastest revenue growth will be in digitally driven segments. Virtual reality (VR) will lead the way, OTT video follows whereas newspapers and magazines will see their revenues decline over the next five years
  • Developing markets are demonstrating the highest growth rates, the compound annual growth rate (CAGR) will be 8,8%-21,0%. %. By the same measure, no market in Western Europe or North America is expected to exceed a CAGR of 3-5% through 2022.

 

тенденции индурстрии в мире

Key drivers of the new ecosystem

Mobile devices

The worldwide explosion in mobile access is seeing mobile devices become the primary means of accessing content and services for consumers across virtually all markets. That’s why smartphones and tablets have become not only a convenient way to access information, but one of the most important channels for brands to reach potential customers. We expect that 2018 will be the first year when global revenue from mobile Internet advertising will surpass its traditional equivalent.

Personalisation

Today’s consumers are rejecting one-size-fits-all content experiences. Big data analytics tools are used to analyse customer behaviour and are becoming increasingly important for developing market insights, customising product offerings and remaining ahead of competitors. AI technologies for analysing and personalising products and services are increasingly in demand. Services are adapting to these technologies and to customer behaviour. For example, in August 2018, Netflix removed all customer-submitted reviews of content (they were not frequently used and could not be accounted for effectively in calculation algorithms), instead using ratings only to provide recommendations. 

Access to end customers

Social media and technology platforms are outpacing traditional content creators in capturing both the attention of consumers and, thanks to consumer insights, a rising share of their spending. That’s why content creators are forced to compete and build partnerships with existing platforms, and to connect end customers through their own distribution channels. For example, Time Warner is joining forces with telecoms giant AT&T (an M&A deal worth USD 85bn was recently approved by the US Department of Justice) while the Walt Disney Company, a major entertainment company, went through restructuring this year and opened a new direct-to-consumer unit that will include a video-on-demand service.

Russian trends

In 2017, the entertainment and media industry in Russia continued to show strong growth, with an upward trend expected through 2018 and over the next several years. The positive trend was facilitated by the sustainable trajectory of growth achieved by the Russian economy, for one, and by the 2018 FIFA World Cup, a large-scale sporting event hosted by Russia.
  • The modern Russian entertainment and media market reflects the primary trends seen in developed countries: convergence redefines the competitive playing field; the integration of new technologies is capable of both simplifying business processes and creating content; and personalisation helps to draw and maintain audiences.
  • The current lines between traditional media market players and other participants are blurring.  The market is being invaded by new rivals from adjacent industries that have become full-fledged players in the entertainment and media market, as well as by small new media companies that offer niche products and services.
  • AI combined with big data analytics and machine learning helps to create personalised content in the broader sense.
  • Looking five years ahead, we predict that the media market will demonstrate a GAGR of 8,8% which is twice the global rate.
  • Similar to the past several years, the newspaper segment in Russia will continue to demonstrate negative rates of growth. Internet access, Internet advertising, OTT video, e-sports and VR will grow more than the Russian media market in general. Internet access will be the leader among all segments with 30% of the total volume.

 

Contact us

Evgeny Klimenko

Partner, PwC Russia

Tel: +7 (495) 967 5133

Natalia Vozianova

Partner, Technology, Communications, Entertainment & Media, Tax Services, PwC Russia

Tel: +7 (495) 967 6237

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