Perspectives from the Global Entertainment and Media Outlook 2017–2021 Curtain up! User experience takes center stage
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PwcOutlook_C1-21-fin1-plusChanges.indd 2 5/2/17 12:00 PM Perspectives from the Global Entertainment and Media Outlook 2017–2021 Curtain up! User experience takes center stage
PwcOutlook_C1-21-fin1.indd 1 5/1/17 2:51 PM Global entertainment and media outlook country contacts
Global Denmark Japan Deborah Bothun Leif Ulbaek Jensen Yoshihisa Chiyoda [email protected] [email protected] [email protected] Argentina Egypt Kenya Ariel Vidan Jayant Bhargava Anthony Murage [email protected] [email protected] [email protected] Australia Finland Korea Megan Brownlow Harri Valkonen Bumtak Lee [email protected] [email protected] [email protected] Austria France Malaysia Hannes Orthofer Richard Béjot Irvin Menezes [email protected] [email protected] [email protected] Belgium Germany Mexico Kurt Cappoen Werner Ballhaus Luis Roberto Martinez [email protected] [email protected] [email protected] Brazil Greece Middle East/North Africa Estela Vieira Panagiotis Zisis Jayant Bhargava [email protected] [email protected] [email protected] Canada Hungary Netherlands John Simcoe Peter Sere Ennèl van Eeden [email protected] [email protected] [email protected] Chile India New Zealand Ariel Waltuch Frank D’Souza Keren Blakey [email protected] [email protected] [email protected] China & Hong Kong Indonesia Nigeria Wilson Chow Mohammad Chowdhury Osere Alakhume [email protected] [email protected] [email protected] Colombia Ireland Norway Jorge Mario Añez Amy Ball Eivind Nilsen [email protected] [email protected] [email protected] Czech Republic Israel Pakistan Tomas Basta Amir Gleit Syed Shabbar Zaidi [email protected] [email protected] [email protected] Italy Peru Maria Teresa Capobianco Bernardo Duce [email protected] [email protected] Philippines Thailand Mary Jade Roxas Tina Hammond [email protected] [email protected] Poland Turkey Pawel Wesolowski Murat Colakoglu [email protected] [email protected] Portugal UAE Goncalo Mendes Jayant Bhargava [email protected] [email protected] Romania United Kingdom Florin Deaconescu Phil Stokes [email protected] [email protected] Russia United States Yury Pukha Deborah Bothun [email protected] [email protected] Saudi Arabia Stefanie Kane Jayant Bhargava [email protected] [email protected] Christopher Vollmer Singapore [email protected] Charlotte Hsu Venezuela [email protected] Manuel Pereyra South Africa [email protected] Vicky Myburgh Vietnam [email protected] Ong Tiong Hooi Spain [email protected] Jorge Planes Trillo [email protected] Sweden Nicklas Kullberg [email protected] Switzerland Patrick Balkanyi [email protected] Taiwan Damian Gilhawley [email protected]
PwcOutlook_C1-21-fin1.indd 3 5/1/17 2:51 PM About this report
Each year we take a deep dive into the And these imperatives assume a larger findings of our Global entertainment importance because, as we document, and media outlook. Whether you’re a the E&M industry is confronting several newcomer to the Outlook or a longtime challenges to continued top-line growth. subscriber to our data, you should regard To learn more about how the findings in this document as an annual report for this report can apply to your business, businesses that invest and operate in or how your company can subscribe to the entertainment and media (E&M) the full body of Outlook research, please industry and in related sectors, such connect directly with your local PwC as technology, communications, retail, team. Alternatively, you can reach out to and e-commerce. either of us, and we’ll put you in touch As you read through this report, we’re with our local leaders in your geography. Deborah Bothun confident you will come away with We look forward to hearing from and actionable business insights based on working with you. the trends we’re identifying and charting across the 17 defined segments and 54 countries our research covers. The Best regards, authors of this report connect the dots Deborah Bothun between the business challenges our Global Entertainment & Media Leader clients face today, whether they are [email protected] coping with value-chain disruption or mapping an M&A strategy, and the highly Brad Silver detailed segment and country data that Global Technology, Media, and emerges from the research. Telecommunications Leader [email protected] The intensive debate, discussion, and Brad Silver analysis we engage in each year yields important insights. For 2017, we see an important set of takeaways that should inform and shape your strategy. Companies that wish to capture value amid shifting consumer preferences and business model disruptions must focus on an increasingly prominent source of competitive advantage: user experience. They must harness technology and data to attract, retain, and engage users — and convert them into devoted fans.
PwcOutlook_C1-21-fin1.indd 4 5/1/17 2:51 PM Contents
06 Methodology and definitions 07 Contributors 10 Curtain up! Outlook perspective 22 Business models As distribution splinters, adaptation is the name of the game 26 Value chains Across E&M, companies chart a direct-to-consumer path 29 Technological change Driving incremental growth through innovation 32 Content strategy Adapting to penetrate technological and cultural filters 35 Deals Strong tailwinds 38 Regulation Market contrasts, net neutrality, and privacy Index
PwcOutlook_C1-21-fin2-050417.indd 5 5/4/17 11:12 AM Methodology and definitions
Historical data collection Forecasting methods Definitions All forecasts have been built starting All forecasts are prepared as part of Do you want access to consumer with the collection of historical data a collaborative, integrated process and advertising spending data at from a variety of sources. A baseline of involving both quantitative and the click of a button? The Global accurate and comprehensive historical qualitative analysis. The forecasts are the entertainment and media outlook is data is collected in the first instance result of a rigorous process of scoping, a comprehensive source of global from publicly available information, market mapping, data collection, analyses and five-year forecasts of including from trade association and statistical modeling, and validation. consumer and advertising spending government agencies. When this data across 54 countries for 17 segments: Note: The only source of all consumer is used directly, these sources are cited and advertising spend data is the Global Books accordingly. In addition, interviews entertainment and media outlook; Business-to-business with relevant associations, regulators however, all the data, charts, and Cinema and leading players have been held graphs (unless stated otherwise) in this Data consumption to gather insights and estimates not publication are taken from the Global E-sports available in the public domain. When entertainment and media outlook. Internet access this information is collected, it is used Internet advertising as part of calculations, and the sources Internet video are proprietary. Magazines Music Newspaper Out-of-home advertising Radio Traditional TV and home video TV advertising Video games Virtual reality To access the full segment definitions for the Outlook, please visit www.pwc.com/outlook
6 Global entertainment and media outlook 2017 –2021
PwcOutlook_C1-21-fin1.indd 6 5/1/17 2:51 PM Contributors
Kristina Bennin Wilson Chow James DePonte Karel Garside Stefanie Kane Art Kleiner Matt Lieberman Pauline Orchard Sally Potts Emmanuelle Rivet Phil Stokes Many other professionals from the PwC entertainment and media practice, across 54 countries, reviewed and added local expertise to this publication.
Contributors 7 Introduction
8 Global entertainment and media outlook 2017 –2021
PwcOutlook_C1-21-fin1.indd 8 5/1/17 6:30 PM Introduction 9
PwcOutlook_C1-21-fin1.indd 9 5/1/17 6:30 PM Curtain up! by Deborah Bothun and Christopher Vollmer Executive summary It’s a cliché to note that something fundamental has changed in the global entertainment and media (E&M) industry. But the reality is that something significant has changed. E&M companies have been accustomed to competing and creating differentiation primarily based on two dimensions: content and distribution. Now they must focus more intensely on a third: user experience. To thrive in a marketplace that is increasingly competitive, slower-growing, and dependent on personal recommendations, companies must develop strategies that engage, grow, and monetize their most valuable customers — i.e., their fans. To do so, they must combine excellent content with breadth and depth of distribution, and then bring it all together in an innovative user experience, in which the content is discoverable easily on an array of screens and at an attractive price. Simply capturing the natural growth in consumers and their uptake of services and content with existing approaches is no longer sufficient. Across the industry, the resulting quest to create the most compelling, engaging, and intuitive user experiences is now the primary objective for growth and investment strategies — and technology and data lie at their center. Pursuing these strategies will help companies thrive in an era of complexity and slowing top-line growth from the traditional revenue streams 1 that have nourished the E&M industry to date. 10 Global entertainment and media outlook 2017 –2021
PwcOutlook_C1-21-fin1.indd 10 5/1/17 2:51 PM A new focus on the user interests; and (2) capitalize on those themselves with audiences that are emerging technologies that delight more engaged, are more committed, Historically, the debate in the E&M users in new ways, deliver superior user and spend more per capita. Today’s industry has revolved around the experiences, and enhance productivity fans will also recruit tomorrow’s. And relative importance of content versus (see Exhibit 1). companies that “super-serve” fans distribution, and the strategic value via new and deeper experiences will of combining the two. We’ve seen this move faster to unlock opportunities play out in vertical integration, industry Fan-centric businesses for revenue expansion. Embracing a consolidation, and, to dust off a phrase In a Summer 2017 strategy+business fan-centric approach requires making from the recent past, digital convergence article, “How to Make Entertainment transformational changes throughout strategies. More always equaled better, and Media Businesses ‘Fan’-tastic,” the enterprise. Ultimately, the four most and size itself became the defi ning Christopher Vollmer described why E&M important priorities for business leaders competitive advantage. businesses built around fans command to consider are: multiple strategic advantages in today’s Rapid changes in technology, user • Know who the fans are. Companies hypercompetitive landscape. The behavior, and business models, however, must be able to distinguish their fans steady march of digital technology has have created a gap between how from casual users, understand what ushered in a more direct-to-consumer consumers want to experience and pay drives fandom for their brands, and environment characterized by greater for entertainment and media and how analyze the relative value of different choice and user control. With an ever- companies produce and distribute their audience or user segments. This creates greater supply of media, there is simply offerings. To bridge this gap, companies an imperative to build deeper user too much competition to allow E&M should pursue two related strategies: (1) insights and better targeting businesses to survive on experiences focus their efforts on building businesses capabilities. To do this, E&M companies that disproportionately cater to casual and brands anchored by active, higher- must strengthen capabilities in data “eyeballs,” infrequent users, and other value communities of fans, who are analytics, measurement, and lower-value audiences. By contrast, united by shared passions, values, and management. They can then more businesses that are fan-centric will fi nd readily analyze what converts users into higher-value fans. These insights can help executives concentrate Exhibit 1: Move over, content. Move over, distribution. User experience resources on the initiatives that matter is king most for driving overall company growth and profi tability. Examples: • Increase business agility and Accessibility fl exibility. Today’s fast-moving, tech- Affordability Artificial intelligence and experience-driven market is Authenticity compelling E&M companies to optimize Augmented reality E n Convenience their operations in new ways. t Blockchain a s b i Cool l Chatbots l Organizations need to be wired so they i Customization n h Digital assistants g have the fl exibility to respond faster to s
i
Discoverability t
e w Face recognition new user preferences, new business
User c
r Entertainment h
e Machine learning models, and new technologies. Teams
Fun, funny experience n o
m Robotics
u
l must be more multidisciplinary in their
Participation o
s
Sensors / IoT g n
Personalization i approaches — bringing together o e
Virtual reality s C Privacy expertise across content, product, Voice interfaces Security technology, distribution, and sales more 4DX Simplicity smoothly than ever before. For many Spontaneity E&M businesses, this means transforming organization structure, teaming models, and company culture. Source: PwC
Introduction 11
PwcOutlook_C1-21-fin1.indd 11 5/1/17 2:51 PM • Monetize the total fan relationship. Fans want to do more with their favorite Exhibit 2: Companies are leveraging emerging technologies to enhance E&M brands than just watch. And fans the user experience are by definition fanatics: They are the A U.S.-based VR startup is planning users who cannot get enough of the Worldwide tech company developing to open a VR multiplex immersing next mobile OS with AI-powered features brands they love. Following fan passions AI/ consumers in a personalized to streamline consumer experience. automation AR/VR creates a natural pathway to identifying entertainment experience. new revenue opportunities. By super- Global telecom company Social networking invests in entertainment serving fans and extending the brands Cyber- company released Cloud and franchises associated with operating system to deliver security anti-harassment capabilities a personalized entertain- to enhance user safety. passionate fans into new areas, E&M ment experience across Technologies companies can create additional all devices. transforming revenue opportunities in core offerings E&M Multinational E&M The sharing economy 3D across multiple business models, conglomerate has created Access, not shifts consumer behavior printing ownership including advertising, subscriptions, a patent-pending from owning assets. and transactions. 3D printer. Multinational tech company is E-commerce company is investing Internet Big data/ • Adopt a user-/fan-centric focus. of Things data providing real-time sports statistics in an IoT voice-led operating system to analytics Leading E&M companies will develop enable smart devices. and point-by-point analysis. the capabilities to compete and win in an increasingly direct-to-consumer Source: Business Insider, Forbes, Variety, International Data Corp., Tech News World, CNBC, landscape. This means moving from PwC playing solely in a wholesale world, where other players in the value chain often manage the end-user relationship, and retain them. That ultimately creates potential to improve user experience to operating in a more retail-like further opportunities for value creation. (see Exhibit 2). environment, where companies deliver In the U.S. and China, a few large A caveat is necessary in any discussion end-to-end experiences directly to companies — Netflix, Tencent, Baidu — of investments in technology and users, consumers, and fans. Capabilities have successfully embraced emerging data. It is increasingly challenging to in areas such as user interface design, technologies to achieve these goals. In measure with great precision the E&M customer acquisition and retention, their Summer 2017 strategy+business industry revenue and value generated personalization, customer service, and article, “AI Is Already Entertaining You,” by the collection, mining, and use of even billing will therefore become more Deborah Bothun and David Lancefield data. If companies can deploy data to critical to E&M success moving forward. explored how technology, media, and sell more subscriptions, capabilities telecommunications companies are using in this area will show up in revenue artificial intelligence (AI) solutions to totals immediately. But, of course, there Improve user experience through increase productivity, enhance creativity, are ways to monetize data that aren’t emerging technologies and innovate in ways that address captured by traditional methods of E&M For E&M companies, a great user consumers’ desires and challenges. spend measurement — for instance, data experience (UX) and advances in data Although we’re still in the early days can be used to enhance e-commerce, and digital technology — along with of machine learning and autonomous build brand loyalty, and increase great content — provide the makings of systems, many of the executives Bothun engagement. These factors are implicitly a virtuous circle. Increasing engagement and Lancefield interviewed recognize included in valuations of companies, but and attention can lead to the capture that AI is not just another IT investment not necessarily in the traditional revenue of more data and more understanding — it is becoming part of the technology measurement buckets. about what crucial customers want. And stack and touches all parts of the that understanding enables companies business. AI is a key component of seven to further refine, target, and engage of the eight emerging technologies PwC their core audiences in ways that delight has identified as having the biggest
12 Global entertainment and media outlook 2017 –2021
PwcOutlook_C1-21-fin1-plusChanges-ReplacedExhibits.indd 12 5/2/17 5:26 PM A slowdown Barring a step change in technology, experiences, or platforms, the growth in global growth rate of the E&M industry will be below Across segments, and at any stage of the growth rate of global GDP. Simply the economic cycle, it is clear that put, based on the traditional revenue connecting with consumers as fans streams that have driven growth and focusing on the user experience historically, E&M is losing market share can be powerful levers for growth and in the global economy (see Exhibit 3). profitability. These capabilities assume Why is this happening? This slowdown a particularly high importance when stems from a set of challenges that top-line growth begins to ebb in a are specific to E&M businesses as well sector or industry. Which is precisely as larger factors that are affecting the challenge many participants in the many industries. E&M industry are facing. In our annual review of the Global entertainment and media outlook data, we look at Are consumers maxed out on a composite of all 54 countries and media? 17 segments included in the study Because so many of our conversations Based on the to arrive at a global market forecast. with CEOs and board members traditional revenue Few businesses have global strategies currently start off with questions about that neatly match all of these markets. overarching geopolitical, regulatory, streams that have Still, we use this approach to take the and technological uncertainties, we’re powered growth to temperature of how the overall industry confident that some of the projected is faring from year to year. Over the decline in growth stems from these date, E&M is losing next five years we’re projecting that risks. (See “A trio of macro challenges,” market share in the annual growth in the E&M industry will page 18.) However, even if we hold the average 4.2 percent, down from the macro risk steady, the E&M industry is global economy. 4.4 percent CAGR we forecast last year.
Exhibit 3: Global E&M revenue as a share of global GDP E&M revenue will fall as a share of global GDP over the next five years
2016 2017 2018 2.54% % 2.53 2.52% 2019 2.48% 2020 % 2.44 2021 2.39%
Source: Global entertainment and media outlook 2017−2021, PwC, Ovum
Introduction 13
PwcOutlook_C1-21-fin1.indd 13 5/1/17 2:51 PM facing signifi cant pressures on growth. instead of mass-media purchases, their That’s because it appears we may have overall spending may not grow as rapidly arrived at a tipping point. In many of as in the past. the largest markets, and hence in the The same truism that holds for most industry as a whole, E&M businesses consumer markets holds true for the are approaching or have reached a form E&M industry: As markets mature, of saturation. It may be that there are they grow more slowly (see Exhibit 4). limits to the willingness and ability The most rapid growth rates will be of people to consume and pay for the seen in less-developed markets and expanding array of media products economies, where E&M spending on a and services. But it could also be that per capita basis is generally quite low as digital media markets mature, and (see Exhibit 5). as user experiences improve, consumer and advertising spending is becoming There are no real outliers or exceptions more effi cient. As consumers purchase to this rule. As Exhibit 4 (call it a seesaw streaming subscriptions instead of chart) shows, the top left quadrant is buying music downloads, and as populated by mature markets in North advertisers make targeted online buys America and Europe, and wealthier
Exhibit 4: A world of differences Scale vs. growth in global E&M markets
Global E&M growth = 4.2%
730 U.S. China Japan U.K. Germany France South Korea Canada India 45 Italy Brazil
40 Australia 35 Average market Spain 30 size = $41 billion
25 Mexico Russia Netherlands Indonesia 20 Switzerland Sweden Turkey Thailand 15 Belgium Norway Malaysia U.A.E. Philippines Total E&M revenue 2021 (US$ billions) revenue 2021E&M Total 10 Denmark N.Z. Egypt 5 Finland Israel Peru Pakistan Nigeria 0 Romania
0% 1% 2% 3% 4% 5% 6% 7% 8% 9% 10% 11% 12% 13% CAGR 2016–21 Source: Global entertainment and media outlook 2017−2021, PwC, Ovum
14 Global entertainment and media outlook 2017 –2021
PwcOutlook_C1-21-fin1.indd 14 5/1/17 2:51 PM Exhibit 5: Markets with low per capita spending will grow most quickly
• Each bubble represents a country • Size of bubble represents total E&M revenue • Dollar amount represents per capita spending
Switzerland $2,000 U.S. $2,260 Slower growth
U.K. $1,447
China $222
evenue per capita, 2021 Higher growth India $32 E&M r
E&M CAGR 2016–21 (%)
Source: Global entertainment and media outlook 2017−2021, PwC, Ovum
Asia-Pacific markets, in which consumers growth rates. Over the next five years, spend a lot — more than US$500 per most E&M segments will struggle to capita annually — on E&M. In both keep pace with GDP growth. Only two the U.S. and Switzerland, consumers segments, newspapers and magazines, spend more than $2,000 per capita. The are declining in absolute terms. But bottom right quadrant is home to less- other major segments, including TV developed economies, which, although advertising, B2B content, and cinema, they may be highly populous, feature will shrink as a share of the global much lower per capita spending. In five economy between now and 2021. And of those markets (Pakistan, Nigeria, the areas that are showing growth, India, Egypt, and Vietnam, which have a such as Internet video and Internet combined population of 1.9 billion), per advertising, are not sufficiently large to It could be that as capita E&M spending is less than $50 overcome the stagnation in other areas per year. Although revenues are rising (see Exhibit 6, next page). digital media markets rapidly in these markets, they are doing In other words, we are approaching an so from a very low base. As a matter of mature, and as user industry plateau. Traditional, mature mathematics, the rapid growth in the segments are in decline, the Internet experiences improve, lower right quadrant can’t compensate and digital E&M content is growing but for the lower growth in the upper left consumer and at a slowing rate and the next wave of quadrant over the forecast period. content and entertainment is in areas advertising spending The majority of the traditional industry such as e-sports and virtual reality, is becoming more segments included in the Outlook which are just beginning to ramp up. forecast also show a decline in projected According to Nielsen’s 2016 report on efficient.
Introduction 15
PwcOutlook_C1-21-fin1-plusChanges-ReplacedExhibits.indd 15 5/2/17 5:33 PM total audience measurement, U.S. adults Exhibit 6: Internet video, Internet ads, gaming, and access are the now spend 10 hours and 39 minutes engines powering global E&M growth a day consuming media, including an CAGR minus GDP growth by segment, 2016–21 average of 4 hours and 31 minutes spent watching live television. Because the U.S. -10% 0 10% 20% is the largest revenue market for both E&M overall and per capita spending, Internet video 6.0% it is hard to see how its consumers will continue to boost their consumption and % Internet advertising 4.3 spending at levels above GDP growth Four major unless there is a major change in “must % growth drivers Video games 2.7 have” technologies and brands. One example of such a technology step % Internet access 0.5 change could come with the adoption of autonomous vehicles — which would % Cinema -1.2 significantly add to the number of available screens and screen time for % Out-of-home ads -1.7 consumers.
Music -2.0% Emerging areas TV advertising -2.8% There’s another possible explanation for the apparent slowdown in growth. % B2B -2.9 CAGR % The universe of what is considered E&M 4.2% E&M spending is clearly expanding, in % Radio -3.4 GDP 5.6% an ever-proliferating range of venues, platforms, devices, arenas, and consumer % Traditional TV & video -4.2 products. But many of these areas, which have significant growth potential, are % Books -4.5 not captured directly in the 17 segments that we follow. Many companies are % Magazines -6.0 channeling portions of their advertising budgets to e-commerce sites, but those % Newspapers -8.3 totals are not aggregated. The tallies of cinema box office do not include the -10% 0 10% 20% growing revenues movie theater owners realize from using their properties to GDP CAGR % stream sporting and music events. Live Note: E-sports and VR have been excluded from this chart because their very high growth events have great appeal. Live music, rates (from very low bases) would distort the scale. The data consumption segment is not included here because it is a usage-based metric. a $25.6 billion business, is projected Source: Global entertainment and media outlook 2017−2021, PwC, Ovum to grow at a 3 percent CAGR through 2021. And we haven’t traditionally broken out live theater, which is booming: Broadway box office sales in 2016 alone were $1.4 billion.
16 Global entertainment and media outlook 2017 –2021
PwcOutlook_C1-21-fin3-050417.indd 16 5/4/17 4:32 PM Pockets of divergence Exhibit 7: Global divergences Not all markets or segments are slowing or in decline. Pockets of divergence and potential market growth opportunities growth in U.S. paid surfaced in several areas of our 109% music subscriptions in 2016 10.1% India: the highest research (see Exhibit 7). E&M growth excluding access (2016–21 CAGR) Cinema. Global box offi ce spending may be under pressure. But we were struck by the varying amounts of ad-based revenue as a proportion of cinema revenue — from essentially nothing in Japan to 40 percent in Cinema advertising % of total cinema South Africa. Cinema is a medium South Africa that commands consumers’ absolute 40% attention — in most cultures, engaging U.K. 13% with a second screen (e.g., checking U.S. 8% email or Facebook on a smartphone Russia during a movie) is frowned upon. These 2% factors make cinemas an especially Canada 2% good place for targeting younger Japan 0% demographics. Although there might be resistance in certain countries to viewing ads, we believe there is ample Music streaming revenue, 2016 growth room in many developed countries to Global 65% use the largest screens available as a vehicle for targeted campaigns. U.S. 99% Music in Japan. Thanks to enduring consumer preferences, Japan’s physical Music unit sales, 2016–21 CAGR music unit sales will withstand the -21% Japan diffi cult global climate far better than -8% other countries. Indeed, with projected Digital unit sales of 88 million in 2021, Japan -15% U.S. will have the highest such sales in the -12% Physical world and be one of the few markets that see only single-digit declines. Japan is Source: Global entertainment and media outlook 2017−2021, PwC, Ovum the one remaining country in the world where Tower Records has a physical we cover. This paradox actually makes more of their rising incomes in non- presence. Total music revenue per capita sense. The low level of Internet access digital traditional print and broadcast in Japan will be $43 in 2021, nearly fi ve in India means the country’s growing physical media, shielding segments times the global average of $9. number of middle-class consumers such as television from the digital E&M in India. E&M revenues will have comparatively limited access to competition they face in other markets. grow rapidly despite the fact that India digital content and experiences. As a is the least digitized of the 54 markets result, Indian consumers are investing
Introduction 17
PwcOutlook_C1-21-fin1.indd 17 5/1/17 2:51 PM A trio of macro Exhibit 8: Global economic uncertainty is the top threat identified challenges by CEOs As E&M companies face a host of challenges particular to their own industries, they are also confronting big-picture forces that affect all companies operating in today’s global context. 72% Economic and geopolitical risks. According to the 2016 CEO Pulse 55% study from PwC’s Global Crisis Centre, 49% 47% 47% economic and geopolitical uncertainties are among the top two threats for companies today (see Exhibit 8). The growth forecasts for the E&M industry have been lowered in part to reflect the broad-based economic and political Global Increased Exchange- Geopolitical Speed of uncertainty that has stemmed from the economic regulation rate uncertainty technological U.K.’s Brexit plans and from national uncertainty volatility change elections in which populist and anti- Source: PwC CEO Pulse 2016 globalization themes have emerged — whether it is in the U.S., France, or the Netherlands. Despite its promise, Exhibit 9: Catalysts of change Latin America, and particularly Brazil, remains hampered by issues of governance. China’s growth remains Increased The competitive steady although not without significant comfort with advantage of challenges: economic imbalances technology technology continue to grow, leadership has slowed market reforms, and economic trade- offs are becoming more acute. There’s always a base level of uncertainty inherent in the global economy. But the severity of issues such as slow growth, currency policy, civil unrest, and geopolitical tensions have intensified concerns. Globalization Multiplier effect of technology of technology
Cheaper access to technology
Source: PwC
18 Global entertainment and media outlook 2017 –2021
PwcOutlook_C1-21-fin1.indd 18 5/1/17 2:51 PM Speed of technological change. Exhibit 10: Data protection regulations are evolving in the United States Technological advancements are and abroad appearing rapidly and simultaneously Data privacy and security are top of mind today for policymakers and across many industries (see Exhibit regulators in the U.S. and abroad: 9). The E&M industry is facing a signifi cant level of uncertainty concerning the speed of change in areas such as AI, 5G networks, IPv6 protocols, virtual reality (VR), and the E.U. Internet of Things (IoT). At the same time, uncertainty also surrounds the U.S. APEC speed of monetization and the viability of new business models enabled by these new technologies. The concerns Latin America created by the confl uence of these disruptions may have a chilling effect on investments. Alternatively, they could be largely offset by an increased FCC broadband Countries are General Data More countries level of spending on related consumer privacy rules repealed. developing data Protection becoming categories such as e-commerce, or FTC will be primary protection laws — Regulation goes into compliant with U.S. authority for but these vary from effect May 2018 — APEC’s by faster Internet speeds and more privacy for broadband; country to country. data usage differs cross-border data from U.S. regulations. privacy rules powerful devices that are fundamental enforcement actions Some laws, such as to improving the user experience. refocused on Argentina's on data E-privacy regulation (CBPR) system. consumer harm. protection, mirror in final negotiations Rules to better Regulatory risks. CEOs in all E.U. data protection for electronic enable trade as The Trump industries identifi ed increased administration is rules. communications, CBPR provides a committed to ISPs, OTTs, others. single data-transfer regulation as the second-most Significant consent framework for strengthening common threat. And within the E&M cybersecurity. requirements. companies. industry, regulatory challenges are evident in every major region. Beyond Stakeholder-generated codes of conduct/best practices and the need for the changes to be expected with a new interoperable global standards are emerging as key policy themes, as regulators administration in the U.S., around the do not want to stifle innovation in industries such as the IoT, autonomous vehicles, world we are seeing that issues of data commercial drones, artificial intelligence, and other emerging technologies. privacy and security are capturing the attention of policymakers and Source: PwC regulators. Stronger regulations in these areas could make it more diffi cult to track data about personal preferences, thereby making it harder to improve the user experience (see Exhibit 10).
Introduction 19
PwcOutlook_C1-21-fin1.indd 19 5/1/17 2:51 PM Exhibit 11: Are you paying more today for video content than you were one year ago?
Yes 42% No • Traditional pay-TV subscribers: % 58 − Skew 35+ (69%) − Oldest group in survey − Report highest household income Pay-TV of all four groups subscribers • Cord trimmers: − Under 35 51% 49% − Over one-third are 18 to 34 years old − Many have adopted skinny bundles to lower cost Cord trimmers • Cord cutters: − Skew younger than 35 32% − Lower-than-average disposable income
68% • Cord nevers: − Youngest group in survey Cord cutters − 68% are younger than 35 The baby boomers are − Never subscribed to pay-TV aging out of their prime − Prefer to cherry-pick content 40% − Lowest household income consumption years, 60% and the generations that replace them may Cord nevers not exhibit the same 42% propensity to spend 58% on E&M. Total
Yes No Source: “Videoquake 4.0: Binge, stream, repeat — How video is changing forever,” PwC Consumer Intelligence Series, 2016
Shifts in generational the past 10 years, PwC’s Consumer Intelligence Series has captured preferences the changing consumer behavior of There’s another long-term challenge to millennials (those born between 1981 top-line growth. The baby boomers are and 1998) and generation Z (born 1998 aging out of their prime consumption to now) across a number of topics. And years, and the generations that it’s clear that the impact of technology replace them may not exhibit the same and digital media has changed the way propensity to spend on E&M. Over younger generations experience and
20 Global entertainment and media outlook 2017 –2021
PwcOutlook_C1-21-fin1.indd 20 5/1/17 2:51 PM Generational Exhibit 12: U.S. household spending by generation (US$)
spending habits $0 $20,000 $40,000 $60,000 Millennials, who are now the largest Housing cohort in the U.S. workforce, have Greatest generation Eating out less money to spend than their (1928 or earlier) elders. And they spend their scarce Entertainment money differently. Two out of three Silent generation Clothing (1929 to 1945) millennials rent their home. They have Food at home the fewest vehicles per household All other spending Baby boomers (1.5) of any generation, except those (1946 to 1964) born before 1929. Although they spend the largest share of their budget Generation X (more than 6 percent) eating out. And (1965 to 1980) millennials spend significantly less on entertainment ($2,186 annually) Millennials than baby boomers ($3,286) and (1981 to now) Generation X ($3,231). $0 $20,000 $40,000 $60,000 If millennials stick to their current spending habits as they age and earn Source: U.S. Department of Labor, Nov. 2016 (based on analysis of generational data from the Bureau of Labor Statistics) more, it will have a significant impact on these industries.
purchase content. They stream songs Of course, millennials will probably Conclusion or watch videos on YouTube instead eventually marry, have children, and Thriving in a world of slower growth, of buying albums; they consume free purchase homes in greater numbers. But intense competition for attention, and news on Facebook or Snapchat instead it seems unlikely they will adopt their continual disruption will be challenging. of spending hundreds of dollars for elders’ habits when it comes to media But the opportunities inherent in this home delivery of newspapers. Rather consumption and spending. world are immense. Our data, analysis, than subscribing to expensive pay-TV and perspective offers compelling Barring a step change in “must bundles, they source their video through insights into how E&M companies are have” technology (e.g., autonomous a combination of over-the-top services adapting, investing, experimenting, and vehicles), profitable growth in the E&M (see Exhibit 11). According to a recent innovating. As we move forward, we industry will increasingly come from study, millennials account for 43 percent know the Outlook will continue to be a capturing market share, rather than of the U.S. cordless population — those valuable source of nuanced information from market expansion. who have never had cable, satellite, or and vital perspective on segments and fiber-optic cable service and those who geographic markets. Several of our have cut the cord. Thirty percent of U.S. PwC colleagues have explored the 2017 millennials are now cordless, compared Outlook findings within the context with just 16 percent of baby boomers, of their specialization and geographic according to GfK MRI’s January 2017 markets. The chapters that follow “Survey of the American Consumer.” take you deeper into the analysis and their insights into industry trends and challenges across business models, value chains, technological change, content strategy, deals, and regulation.
Introduction 21
PwcOutlook_C1-21-fin1-plusChanges-ReplacedExhibits.indd 21 5/2/17 5:43 PM Business models
As distribution splinters, adaptation is the name of the game
PERSPECTIVE: In aggregate, the amount of money consumers and advertisers are spending on E&M is still growing modestly. For the industry as a whole, the outlook is relatively stable. But in many of the Outlook’s segments, we may be at a tipping point of significant changes in how consumers and advertisers allocate their choices and dollars. Yes, companies must continue to battle for market share in their traditional delivery platforms. But to capture their fair share of the new growth streams, they’ll have to ramp up their flexibility and innovation. They can do so by focusing on emerging business models that can drive growth through building creative partnerships and greater brand and franchise loyalty.
Cinema and celebrity backers including Steven Cinema serves as a prime example Spielberg announced their investment of how revenues are being diverted in a startup that would allow people from existing channels into new ones. willing to pay a premium to watch new The major studios face steep declines movies at home on the same day they hit in home entertainment revenue. As theaters. Although the project has since Exhibit 13 shows, global revenue from lost traction, the debate between studios the rental and sales of physical home and exhibitors about shortening release video, which has already been falling delays has continued. sharply, will decline at an 8.8 percent Exhibitors also have an opportunity to CAGR through 2021. In response to such redefine their value proposition and changes, and in recognition that viewers adapt to these changes. For example, are increasingly agnostic as to the size movie theater owners, faced with of the screen on which they view films, stagnant box office sales for first-run many major studios are considering new films, can expand their menu of content ways to shorten the traditional delay to include remote-viewing experiences between the cinematic release of films for fans of opera, the symphony, sporting and their availability for home viewing. events, and pop festivals. In emerging In 2016, Napster cofounder Sean Parker 2 markets with a rising middle class, 22 Global entertainment and media outlook 2017 –2021
PwcOutlook_22-C4-fin1.indd 22 5/1/17 3:45 PM companies can use promotions and Exhibit 13: Global physical home video revenue (US$ billions) rebates to boost admissions, and can expand the use of in-cinema advertising, as is common in South Africa, to increase 35 CAGR revenue over the long term. 30 % 25 -8.8
Advertising 20 Pressures on ad-supported business 15 models reflect two stark realities. First, many consumers, especially among the 10
most attractive demographic segments, 5 such as high earners and millennials, prefer ad-free environments, especially 0 when they are viewing or reading high- 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 quality content. This shift is evident in the rising use of ad-blocking and Source: Global entertainment and media outlook 2017−2021, PwC, Ovum ad-skipping technologies and the rapid growth of ad-free/ad-light subscription revenues. Exhibit 14: Total global advertising growth rates (%) • A 2015 study by Sourcepoint and
comScore found that whereas 10 2014 2016 percent of users block ads in the U.S. 6.5% % 2017 and U.K., about 25 percent do so in 2015 6.1 5.6% 2018 % France and Germany. Younger and 5.1 % 2013 4.9 2019 wealthier users also have a greater 2020 4.1% 4.0% propensity to use ad blockers. 3.7% 2021 • By 2021, Internet video — defined 2.7% as consumer spending on streaming services, such as Netflix, that do not require a pay-TV subscription — will grow at an 11.6 percent CAGR to $36.7 billion. Source: Global entertainment and media outlook 2017−2021, PwC, Ovum Concurrently, media businesses and premium advertisers are not migrating to digital advertising as fast as viewers are diverting their attention to digital media — primarily due to a lack of trust, transparency, and brand relevance. These twin challenges are not leading to a decline in Internet advertising, however (see Exhibit 13). In fact, overall advertising growth is now overwhelmingly driven by Internet advertising, which will grow at a CAGR of 9.8 percent through 2021. By contrast, non-digital advertising is forecast to grow
Business models 23
PwcOutlook_22-C4-fin1.indd 23 5/1/17 3:45 PM Exhibit 15: Global digital music downloading revenue vs. digital music events; ticket sales are forecast to grow streaming revenue (US$ billions) at a 3.2 percent CAGR between 2016 and 2021. But the music business also
20 faces some unique challenges. Although growth accelerated considerably with the launch of Apple Music in 2015, 15 competition is intensifying. New entrants with deep pockets, such as Amazon, are 10 putting more emphasis on the free in freemium, subsidizing consumer costs 5 on the backs of other business models. Moreover, similar to what we see in video 0 content, music is very much a “short 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 tail” business. As we note elsewhere in this report (see “Content strategy,” page Digital music downloading revenue Digital music streaming revenue 32), when consumers are presented with Source: Global entertainment and media outlook 2017−2021, PwC, Ovum expanded choices, they often fall back on the familiar. The top 50 songs account for almost all the streaming activity, yet the at just a 0.2 percent CAGR. Although Music companies are paying music publishers advertisers are still willing to spend Revenues in the global music industry, for access to catalogs with hundreds of within the rapidly growing Internet which had remained flat from 2012 thousands of songs. advertising market, we see a remarkably through 2015, are rising thanks to the high level of concentration of ad tech success of new business models. Built companies controlling that spending. on freemium models, streaming plans U.S. television distribution and According to eMarketer forecasts, Google in 2016 led the global music industry Internet access and Facebook will account for almost to its second straight year of growth. A particularly notable challenge to 50 percent of advertisers’ total global And as streaming gains momentum, we current business models exists in digital ad spending in 2017, and China’s forecast that recorded music revenues the U.S. market, where cable TV and Tencent, Alibaba, and Baidu will capture will rise at a 4.2 percent CAGR through telecoms bundling strategies for pay-TV approximately 15 percent. That’s five 2021. This seemingly modest growth is and Internet access are coming under companies harvesting 65 percent of quite impressive — particularly given pressure. total global digital advertising revenues. the continued decline in digital music This concentration is forcing digital and downloading revenues (see Exhibit 15). Pay-TV challenges. As streaming traditional publishers alike to rethink In 2017, streaming will become the platforms and networks proliferate, how content is distributed, consumed, dominant revenue source for recorded sports has been a powerful magnet and monetized over third-party music. Concurrent with the growth in keeping consumers attracted to platforms, and to pursue new types streaming, major labels are reaping gains traditional pay-TV subscription models. of partnerships and business models in performance rights royalties. Global But that’s changing. Viewership for as a result. performance rights will increase at a 6.4 many of cable’s top sports properties — percent CAGR through 2021. the NFL, the Olympics, Major League Baseball, and NASCAR — is shrinking. Overall, the music industry seems much And as more consumers have been healthier than it was a few years ago. cutting the cord, some premium cable In addition to the growth in streaming, channels have seen their number of there’s also strong growth in live music
24 Global entertainment and media outlook 2017 –2021 subscribers fall. It’s not that people are Exhibit 16: U.S. Internet video revenue (US$ billions) watching fewer events, it’s that they’ve migrated to digital platforms — and to 20 the ever-expanding array of available CAGR streaming services and apps. The 15 9.6% growth options for both television networks and pay-TV providers can be seen in the proliferation of “skinny 10 bundles,” direct-to-consumer digital distribution models, and mobile apps 5 that enable viewing of sports highlights and statistics.
0 Broadband provider challenges. 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 U.S. cable providers are capturing gains from a growing high-speed fixed Source: Global entertainment and media outlook 2017−2021, PwC, Ovum broadband market. Over the next five years, the market will expand from 63.3 million households to 72.2 million Exhibit 17: U.S. Internet access revenue (US$ billions), households, representing a 3.7 percent fixed broadband vs. mobile Internet five-year CAGR. In time, the shift to 5G wireless networks and IPv6 protocols 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 will pose a significant threat to cable Mobile Internet 150 companies’ reliance on revenue from access revenue wired broadband. However, in the near 120 term, overall broadband penetration has reached saturation at 85.8 percent of all 90 U.S. households in 2017. The main threat Fixed broadband today is wireless substitution for slower- access revenue 60 speed fixed broadband services as telcos introduce unlimited wireless offerings of 4G services and as public Wi-Fi 30 becomes ever more prevalent. As Exhibit 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 17 shows, we expect U.S. spending Source: Global entertainment and media outlook 2017−2021, PwC, Ovum on mobile Internet access to rise at an 8.9 percent CAGR through 2021 while spending on fixed broadband Internet access will grow at a 1.5 percent CAGR. Still, innovation and competition in plan designs and access to speed may slow the pace at which consumers decide to move from wired to wireless.
Business models 25
PwcOutlook_22-C4-fin1.indd 25 5/1/17 3:45 PM Value chains
Across E&M, companies chart a direct-to- consumer path
PERSPECTIVE: When asked about the threat of industry disruption, 23 percent of all the leaders who responded to PwC’s annual CEO survey said technology will reshape their industry over the next five years. But the proportion of E&M CEOs who shared this sentiment was more than twice as high: 56 percent. Indeed, technological advancements, and the dramatic changes in consumer behavior that they enable, are already redistributing revenues and competitive advantage. As a result, E&M businesses now have a mandate to build and fortify direct, sustainable relationships with consumers. The paths and choices to navigate to the consumer depend on a relentless focus on the user experience. But they also depend on a company’s current role in the ecosystem of content, distribution, and advertising.
Exhibit 18: Top five concerns for E&M CEOs
Changing consumer % behavior 81
Availability of key skills 78%
Volatile energy costs 78%
Uncertain economic % growth 77
Speed of technological % change 75 3 Source: PwC, 20th Annual Global CEO Survey 26 Global entertainment and media outlook 2017 –2021
PwcOutlook_22-C4-fin1.indd 26 5/1/17 3:45 PM Content Exhibit 19: Consumer spending on Internet video (US$ billions) by region In their path to build closer relationships
with consumers, content companies 25 have doubled down on blockbuster hits.
In a February 2017 special report, the 20 Economist described an industry in which
blockbusters continue to dominate, 15 despite the immense choices consumers
have. Overwhelmed by content choices, 10 consumers fall back on the familiar; they rely on recommendations from 5 friends, algorithms, and rankings. As a result, content that is popular becomes 0 more popular. The promise of digital 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 distribution was that content providers would be able to monetize the massive North America EMEA Asia-Pacific Latin America amount of intellectual property (IP) Source: Global entertainment and media outlook 2017−2021, PwC, Ovum gathering dust in their vaults, catalogs, archives, and backlists — often referred to as “long tail” content. In a digital Distribution agreement with the National Football world, no book would ever go out of The continual splintering of distribution League to stream Thursday night games. print; even the most obscure title would platforms is making it imperative for Increasingly, Netflix is entering into always be available to the few people distribution companies to figure out distribution partnerships with U.S. and who wanted access to it. The long tail how to get closer to consumers. To reach international carriers as part of its global would create recurring revenue streams attractive demographics in the increasingly expansion strategy. from hundreds or thousands of titles digital and mobile environment, we’re Amid this flurry of activity, it’s not and provide content creators with the seeing a significant number of organic and clear which will be the top distribution incentive to produce work, even if it inorganic investments aimed at combining channels five years from now, and appealed to only a small niche audience. distribution with video content. what forces will separate the winners But instead, we’ve seen that across Content companies are making bolder from the losers. the E&M industry, there’s a heavy moves to get directly involved in concentration of blockbuster content. distribution. Much of this is driven by the Investment dollars are thus flowing into rapid growth of over-the-top aggregators Advertising high-quality, premium content. Disney’s and the threat of cannibalization — not For advertisers, forging a profitable path major franchises produced the top five being able to reach audiences through to consumers means gaining visibility highest-grossing films in 2016, including traditional pay-TV distribution (see in digital distribution platforms where all four of the films that grossed more Exhibit 19). Some are taking direct- consumers discover and recommend than $1 billion. Disney’s live-action to-consumer approaches by building content (and brands). From the Outlook version of Beauty and the Beast tallied $1 proprietary apps, such as HBO Now, or data, we know that global spending on billion at the box office within a month pursuing acquisitions. Firms are also advertising is growing at a faster pace of its launch in the spring of 2017. And in entering into content deals with tech than consumer spending, and signs April 2017, Universal Pictures’ The Fate of giants to reach consumers on third- indicate it will continue to do so through the Furious reached $1 billion in the third party social platforms. Examples include 2021. But what’s less apparent is the weekend after its release, largely driven Facebook’s recently announced deals to concentration of advertiser spending by strong performance in China and stream content from Major League Soccer on the digital side — where all the other international markets. games, along with original content deals growth is. Rather than being spread with several other media companies across many outlets, advertising now (CNN, HuffPost, the New York Times, flows disproportionately to a few large etc.). For its part, Amazon has struck an platforms, such as Facebook and Google.
Value chains 27
PwcOutlook_22-C4-fin1.indd 27 5/1/17 3:45 PM Exhibit 20: Total Internet access revenue and Internet advertising revenue by make-up (%), 2012 vs. 2016 vs. 2021
Fixed broadband access revenue Total wired Internet advertising revenue Mobile Internet access revenue Total mobile Internet advertising revenue
51% 91% 2012 49% 2012 9%
43% 62% 2016 2016 57% 38%
37% 44% 2021 2021 63% 56%
Source: Global entertainment and media outlook 2017−2021, PwC, Ovum
The fact that the rising tide will lift only a future, aiming to dominate the online The robust growth of few very large boats presents increasingly finance and e-commerce market. Other difficult challenges for traditional media companies that have proved to be Internet advertising segments. The media planning business, powerful magnets for user attention, as well as newspaper and magazine such as Amazon, Facebook, and Google, masks an embedded publishers, will come under particularly are moving in a similar direction. acute pressure. form of inertia. With each passing month, more of the Premium brands are In the new environment, value flows to world’s Internet experience is taking the companies that control the three Cs: place via mobile. But last year, wired reluctant to take on the content, communication, and commerce. Internet advertising still accounted perceived risks inherent For Internet advertisers, the route to for 61.6 percent of total Internet control is through focusing on the user advertising (see Exhibit 20). The robust in concentrating more experience, especially in mobile. The growth of Internet advertising also growth of Internet advertising is being masks an embedded form of inertia. of their advertising in powered by mobile advertising, which Premium brands are reluctant to take digital mediums. grew by 54 percent in the past year, on the perceived risks inherent in to $43.8 billion. Through 2021, that concentrating more of their advertising number will grow at a 17.1 percent in digital mediums. Without accepted CAGR — ultimately reaching $96.9 measurement practices that can provide billion. An example can be seen in transparency on the efficacy and China’s Tencent, which is laser-focused efficiency of the major platforms, larger on creating a mobile ecosystem (pushing agencies and their clients have held back users from desktop to mobile gaming, for their ad dollars. It often takes a period example) that is sufficiently compelling of time for advertisers to catch up to for the user never to leave the “Tencent where consumers are spending their experience.” Introduced in 2011, time and attention. In 2016, smartphone Tencent’s enormously popular messenger connections accounted for more than app, WeChat, surpassed 800 million 50 percent of global mobile phone monthly active users in 2016. Tencent connections, a proportion that will rise to invests heavily in the mobile commerce more than 75 percent by 2021.
28 Global entertainment and media outlook 2017 –2021
PwcOutlook_22-C4-fin1.indd 28 5/1/17 3:45 PM Technological change
Driving incremental growth through innovation
PERSPECTIVE: The accelerating speed of technological change creates a macro-level risk for most businesses. But in the E&M industry it’s also opening up a large opportunity for innovation in product offerings, brands, and business models that revolve around the user experience. We see it in emerging segments with rapid growth such as virtual reality and e-sports, both of which were added as new Outlook segments this year. In addition, across many segments, data is evolving into a form of currency. To a large degree, the value that companies can now capture from data — because it allows for personalization, customization, segmentation, and greater ROI and brand equity — gets captured indirectly in the Outlook segment data, such as Internet advertising. But in other cases, the value may flow into adjacent sectors, such as e-commerce. Either way, the growing volume of data and the technologies that allow companies to mine and deploy it are transforming the ways E&M companies monetize both content and distribution.
E-sports dedicated e-sports stadium in 2005 — The Outlook’s new e-sports segment might dispute the idea that e-sports is defined as consumer and advertiser is “new.” The video game industry in spending on organized video game China is enormous and with the growing competitions. E-sports is rapidly development of e-sports venues, we evolving from a hobby (or an obsession expect high growth potential in this for many users) into something sector. But what is undeniably new is resembling a professional sport, through the emergence of e-sports as a global a combination of one-off events and phenomenon that attracts large, leagues. Companies and consumers in youthful audiences and premium countries such as Germany and South multinational brands. 4 Korea — the latter of which built a
Technological change 29
PwcOutlook_22-C4-fin1.indd 29 5/1/17 3:45 PM Much in the same way social gaming Exhibit 21: Total e-sports revenue by country (US$ millions) evolved, the audience makeup has now grown well beyond hardcore gamers and 1,000 their niche segment of brands and social Russia networks. Most who livestream e-sports Japan China do so on sites such as Twitch, which was 800 acquired by Amazon in 2014 and hosts South Korea 2.1 million unique streamers per month. Spain In the U.S., where colleges are starting 600 Italy to field e-sports teams, pay-TV networks Germany are getting involved. Time Warner’s France 400 Turner broadcasted the ELeague on TBS U.K. and its digital platforms for the first time U.S. last summer, averaging 228,000 viewers 200 per episode. And ESPN has begun covering major e-sports such as Defense of the Ancients 2 on its streaming and 0 broadcast channels. Exhibit 21 shows 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 monetization is starting to catch up with this rising attention. In the Outlook, Source: Global entertainment and media outlook 2017−2021, PwC, Ovum e-sports revenues fall into four buckets: ad spending on streamed events, sponsorship revenue at events and for traditional sports or other entertainment creators are still struggling with teams, consumer spending on tickets to and media. The spending per fan has distribution and monetization. Margins attend e-sports events, and consumer significant potential to grow, given are still razor-thin given the technical spending on passes to virtually attend that it is very low compared to per-fan constraints and high costs of headsets. events. Overall, e-sports revenues more spending for established sports leagues, To experiment in VR as a video medium, than quadrupled between 2013 and 2016, such as the NBA and NFL. With more the team behind Google’s Art, Copy & and could nearly triple again by 2021. technology innovation and sophistication Code is developing content on WebVR. in storytelling, e-sports can become E-sports is a great example of a fan- This approach lets audiences view even more interesting to watch, easier centric business. It’s reaching fans who content through a Chrome browser or for viewers to follow, and attractive for are not spending as much time with with low-cost headsets that incorporate advertisers and their brands. smartphones — such as Google rts users) Cardboard or Daydream. The idea is to In 2017, we introduced two new Virtual reality create a faster path to large audiences — categories to the Outlook: e-sports and ones that will attract advertisers. virtual reality. In some markets, these To start measuring the impact of virtual categories are very immature and reality (VR) on the E&M industry, the As hardware (device) platform leaders therefore extremely hard to measure. Outlook now includes consumer spending emerge, their related marketplaces for For that reason, we’re focusing now on the video content, games, and content will mature. No one will get rich only on the 10 markets in which the applications associated with the sale of from hardware alone; the end game will revenue streams and business models head-mounted VR systems for consumers. be to become the standard platform for have developed sufficiently so that As was the case in the early days of VR and hence start to create revenue it is possible to measure results and smartphones, this is a highly immature streams from content sales, licensing, or analyze trends: the United States, market with several underdeveloped advertising dollars. We anticipate VR will Japan, China, South Korea, the United business models and lots of experimental grow at an 80 percent five-year CAGR Kingdom, France, Germany, Russia, or low-quality content. Game publishers through 2021, at which point it will be a Italy, and Spain. have made good progress in getting $15 billion global market, compared with beyond the free demo stage. VR video $869 million in 2016 (see Exhibit 22).
30 Global entertainment and media outlook 2017 –2021
PwcOutlook_22-C4-fin1.indd 30 5/1/17 3:45 PM In 2016, PwC’s Consumer Intelligence Exhibit 22: Total VR revenue (US$ billions) in the three largest markets Series conducted a study about e-sports consumers in the U.S. 12 market. The group with a high degree of awareness of e-sports had the 10 following characteristics:
• Gender-neutral 8 Japan • Median age: 28 6 • 69% age 18–34 • Racially diverse 4 China
• More likely to own multiple 2 tech devices (desktop computer, connected TV, connected device, 0 U.S. etc.) 2016 2017 2018 2019 2020 2021 • Spent more time in front of screens than non-e-sports users, whether Source: Global entertainment and media outlook 2017−2021, PwC gaming or streaming video content
Data as currency creation by helping companies gain share Any buyer–seller transaction or in mature markets and attract growth in relationship involves an exchange of emerging markets (while possibly also value. Historically, that value has been slowing the drain of piracy). measured in monetary currencies But the value of data becomes even such as dollars, euros, or renminbi. more powerful as artificial intelligence But it’s increasingly likely that for begins to play a bigger role in E&M E&M companies, value will come to be organizations. As detailed in Deborah measured in the monetizable currency Bothun and David Lancefield’s of data. By virtue of operating, any E&M article in the Summer 2017 issue company gathers an immense amount of strategy+business, “AI Is Already of powerful information about user Entertaining You,” data is a critical behavior and preferences, performance, input for powering AI solutions. And by and transactions. deploying AI, companies can become The revenue forecasts in the Outlook far more efficient in building audiences, reflect the upside value of monetizing attracting advertisers, extending the data. Businesses could be implicitly (if brand experience, interacting, and not explicitly) capturing the value of upselling across the customer journey. user data into the abundance of free, They can also become much better freemium, and subscription-based at designing the user experience in a pricing for content today. For example, way that extends the amount of time Amazon could use the data gleaned from consumers spend with content and the tracking viewers of the NFL games it amount of brand equity gained through will be streaming to promote the sale of loyalty and recommendations to others. merchandise. Data could also abet value
Technological change 31
PwcOutlook_22-C4-fin1.indd 31 5/1/17 3:45 PM Content strategy
Adapting to penetrate technological and cultural filters
PERSPECTIVE: In last year’s Outlook report, we found a nearly perfect correlation between rapid E&M growth and countries with younger populations. But the growth opportunity we saw was far from a one- size-fits-all content strategy. Local differences factor heavily into consumer preferences for the provenance of content (global versus local), for specific genres, and for key segments of content. But even if you get this part of your strategy perfectly tuned, the bigger issue for building your content strategy comes down to discovery. In a world where consumers increasingly curate their own content, how do you penetrate the powerful filtering mechanisms that act as gatekeepers?
Decoding content preferences in at which that digital infrastructure is local markets likely to evolve. The world may be flat in many ways, but For all these reasons, even markets that evidence abounds that it remains very might appear similar at the surface spiky in places. Content preferences are may offer remarkably different revenue highly influenced by the dynamics and opportunities (see Exhibit 23). Here are diversity of culture, language, income, several examples. and regulation. All of these factors can affect companies’ ability to monetize • Magazines. On a per capita basis, investments in content. The quality of consumers in Portugal spend twice the underlying digital infrastructure the amount of money on magazines also varies widely: The relative level of as consumers in Spain, the country’s Internet access penetration, the speed neighbor on the Iberian Peninsula. of those connections, the preferred A similar disparity holds between platforms (mobile or fixed broadband), Scandinavian neighbors Finland and the variance in the popularity of and Sweden. devices with which people access content • Internet access. In Asia, China can differ greatly. And for each market, and India represent the two most you have to consider the pace and scale 5 populous markets — and hence
32 Global entertainment and media outlook 2017 –2021
PwcOutlook_22-C4-fin1.indd 32 5/1/17 3:45 PM vast potential. But Internet use in battle for consumers’ limited time and immense choice, consumers often have India is overwhelmingly a mobile attention. However, the dominance a narrower, more homogeneous view phenomenon. Only 8 percent of data of a few social and search giants of content choices — “filter bubbles,” traffic in India will course through and their role in shaping consumers’ as Internet activist Eli Pariser describes broadband in 2021. By contrast, in content choices is a complicating factor. them. (Pariser argues that users get less China, 56 percent of Internet traffic Consumers’ decisions on how to spend exposure to conflicting viewpoints and will travel on fixed broadband in 2021. their time and attention are increasingly are isolated intellectually in their own determined by social media likes, information bubbles.) They are steered • Cinema. International blockbuster shares, and recommendations from toward the content they are “most likely to movies will find more of an audience algorithms and like-minded people. As a like” as determined by their past choices in Germany than in South Korea; result, even in a world characterized by and what’s most popular. in the latter country, of the 10 top-grossing films, locally made productions accounted for more than 81 percent of revenues. China still has Exhibit 23: Regional spending differences a quota system for the importation of foreign films and effectively limits Per capita spending on magazines, US$, 2017 foreign films’ ability to compete at the box office against local releases. $13 $29 $72 $130 • Video games. The social gaming portion of video game revenue in Germany is more than twice as high as Spain Portugal Sweden Finland it is in Ireland. To expand globally, two of the largest Fixed broadband share of data traffic, 2021 players in video distribution — Netflix and Amazon — have taken different content strategy approaches. Netflix is 8% 56% investing $6 billion to create original content in 2017. It plans to coproduce India China original, local “flagship” content that can be heavily promoted to drive up subscriptions in a number of countries. Local share of top 10 grossing films, 2016 A leading equity analyst estimated that Amazon is spending $4.5 billion on original content. But the company 9% 22% 56% 81% has focused on fewer big markets. It is building a slate of multilingual offerings Germany Brazil China South Korea largely by acquisition and by co- producing original content with local firms. Social gaming share of total video game dollars, 2021
Deciphering changes in 60% 28% content choices At its core, E&M is all about building audiences. Companies monetize Germany Ireland those audiences through advertising, subscriptions, and transactions. Success Source: Global entertainment and media outlook 2017–2021, PwC, Ovum, Hollywood has always turned on winning the Reporter, Wikipedia, Box Office Mojo, Korean Film Biz Zone
Content strategy 33
PwcOutlook_22-C4-fin1-ReplacedExhibits.indd 33 5/2/17 5:15 PM Successful content strategies must adapt Exhibit 24: Newspaper revenue (circulation + advertising) (in US$ billions) to this environment. Consumers, content, and brands now connect across a small 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 number of large platforms — rather 100 than through a direct relationship with traditional publishers (see “Diminishing Australia 80 print returns”) and distributors. As a France result, building audiences now requires a U.K. 60 different set of strategies and capabilities Germany to penetrate filters. 40 China Beyond the revenue impact for 20 traditional content businesses, there’s Japan also an implicit risk for confirmation U.S. 0 bias and the ability for governments and criminals to exploit that bias. Perhaps the 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 most visible impact of these filter bubbles Source: Global entertainment and media outlook 2017−2021, PwC, Ovum was seen in the 2016 U.S. presidential election. A BuzzFeed analysis found that the top fake election news stories individual TV aggregator platforms to generated more total engagement on find the show they’re looking for. But, Diminishing print Facebook than the top election stories as global E&M leader Deborah Bothun from 19 major news outlets combined. returns points out, artificial intelligence could To address this challenge, Facebook and eventually form the basis of a seamless The impact of changing consumer other companies have since announced preferences in content consumption is experience for consumers that spans measures aimed at combatting the especially dramatic for the newspaper existing content, distribution, discovery proliferation of fake news. industry (see Exhibit 24). Consumers in methods, and technology. But, she also Europe, North America, and Australasia notes, this frustration may turn out to continue to abandon print for digital be a generational issue. Bothun posits Are consumers overwhelmed? channels. In North America, which that younger demographics (generation is the third-largest newspaper region In our PwC Consumer Intelligence Z) may not see a curation problem at all by revenue and the region in which Series, we routinely survey consumers — they’ve grown up in a world in which revenues are declining at the fastest on their video viewing preferences and content choices have always been guided pace, social platforms have become the behavior. Many consumers tell us they dominant intermediaries for consumers. by suggestions from friends, family, are flummoxed by the choices they coworkers, celebrities, journalists, or have. In a 2016 survey, 69 percent of all chatbots, and in which content resides participants agreed that “the amount on a range of platforms. They are more of TV content is overwhelming.” They in deals and partnerships. Advertisers comfortable with technology and more say it’s becoming harder and harder are also looking to take advantage of savvy with search. to decide where to spend their leisure the valuable content migrating onto time. The dominant ways of choosing In addition, platforms understand that social platforms, which are developing content were inertia (“it’s a show I’ve they and their audiences thrive when new ad formats to address this demand, watched in the past,” at 78 percent), they publish valuable content. It is along with new monetization models direct recommendations from friends therefore to be expected that competition that compensate all parties and deliver a and family members (45 percent), among these platforms for the right to nonintrusive experience to users. and flipping channels (41 percent). display content, including live content Consumers are also frustrated with (from sports, for example), will continue having to navigate across multiple to intensify. This will result in an increase
34 Global entertainment and media outlook 2017 –2021
PwcOutlook_22-C4-fin3-050417.indd 34 5/4/17 3:43 PM Deals
Strong tailwinds
PERSPECTIVE: Overall, 2016 continued a multiyear trend of strong activity across the global technology, media, and telecommunications (TMT) sector. According to Mergermarket, 2016 deal value in TMT reached $698.2 billion, accounting for 21.4 percent of all global deal activity. The United States was the most active region, reporting 1,101 deals worth $362.7 billion. Within TMT, media showed the biggest increase, growing 118 percent, from $86.1 billion to $188.1 billion. A rise in foreign investment of U.S.- based targets from Asia-Pacific countries, particularly China, contributed to the impressive growth. So, too, did AT&T’s announced $85.4 billion purchase of Time Warner, which, if approved, will be one of the largest deals in the history of the industry (see Exhibit 25). Looking ahead through 2021, there are more tailwinds than headwinds for deal activity. We expect corporate and private equity investments to remain very active. Deal activity will primarily be aimed at gaining global scale, diversifying revenues, and acquiring new capabilities to drive growth.
Tailwinds assets, strengthen analytics capabilities, The powerful underlying shifts in the power innovation with ad tech and global E&M industry point to a growth emerging technologies (VR, AR, AI, in capabilities-driven deals designed etc.), and orchestrate live events and to create new revenue streams and experiences across digital and physical enhance the user experience. We expect venues. Although transformative an increase in strategic deals (large and blockbuster deals will garner headlines, small) that will expand a company’s many significant transactions will be 6 ability to create and manage its data smaller, undisclosed, tuck-in deals. Some Deals 35
PwcOutlook_22-C4-fin1.indd 35 5/1/17 3:45 PM Exhibit 25: Mature players in the U.S. pay-TV sector are making deals that will enable them to grow (US$ billions)
• AT&T/Time Warner: This deal matches Time Warner’s premium content network with AT&T’s leading scale in pay-TV subscribers and in mobile and broadband distribution to connect with consumers on every screen • Comcast: Multiple deals will drive digital growth for Comcast/NBCU through large investments in Snap, BuzzFeed, and Vox, and purchases of SportsEngine and DreamWorks
Pay-TV 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 subscriptions 120
100
80
60
40 Internet video 20
0 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021
Source: Global entertainment and media outlook 2017−2021, PwC, Ovum
good examples of publicly disclosed deals audiences, and allowing for the Companies will use are Disney’s 33 percent stake in BAMtech bundling of services. (a technology company spun off from • Changing regulatory environments. Major League Baseball’s digital video– M&A activity to Changes in net neutrality and privacy streaming unit) and Spotify’s recent regulations across the world could get closer to their purchases of four analytics-enabled make the environment more ripe businesses: Soundwave, Cord Project, customers — both for deal making. In particular, with CrowdAlbum, and Sonalytic. to consumers and a change of administration, the The deals environment should continue U.S. market seems more favorably to brands. to benefit from three positive trends. positioned for ongoing consolidation within E&M, and across the broader • Continuing convergence. Companies TMT universe. will use M&A activity to get closer to their customers — both to consumers • Cross-border investment. In the and to brands. These vertical introduction of this report, we noted integration deals are not focused that anti-globalization trends due on cost synergies. They are aimed to geopolitical factors could affect at boosting growth, monetizing broader global E&M spending. But
36 Global entertainment and media outlook 2017 –2021
PwcOutlook_22-C4-fin1.indd 36 5/1/17 3:45 PM it’s also the case that a large amount the Pacific may impact the pace of of foreign investment continues to growth in FY17; however, we believe flow into the U.S. E&M sector. The the U.S. market will continue to largest increase in 2016 foreign remain attractive to Chinese business investment was from the Asia-Pacific leaders. In a recent article, the Wall region, particularly China. However, Street Journal detailed how Hollywood megadeals involving foreign acquirers studios are increasingly dependent included the completion of U.K.- on China — as a source of investment based Liberty Global’s purchase of and as a source of ticket-purchasing U.S.-based Cable & Wireless and customers. Netherlands-based Altice’s purchase of • Escalating valuations. Pricing of U.S.-based Cablevision. today’s deals reflects companies’ focus on driving growth, as opposed to general cost-cutting or streamlining Headwinds operations. Although a ceiling on Although the tailwinds supporting the valuation has not been established, progress of deals are strong, significant escalating prices may inhibit the headwinds remain that E&M companies willingness of certain private investors must contend with. These include: to participate. For example, unless • China. Direct foreign investment from an individual private equity (PE) China conglomerates in U.S. targets is firm has a deep E&M portfolio, its expected to subside in coming years. ability to leverage synergies may be President Xi Jinping’s government has limited. That said, both corporate enacted controls to limit the flow of and PE buyers are nonetheless outbound capital, and is concerned actively pursuing deals in the E&M about currency valuation challenges. industry. Overall, we expect PE firms Uncertainty about trade relations and to contribute to escalating valuations regulatory changes on both sides of going forward.
Regulation 37
PwcOutlook_22-C4-fin2-050417-ForP34.indd 37 5/4/17 12:42 PM Regulation
Market contrasts, net neutrality, and privacy
PERSPECTIVE: Regardless of where they operate, companies must adapt to the evolving regulatory landscape. And although companies increasingly operate on a global scale, it is vital to understand the crucial changes afoot at the local level. Whether it’s foreign ownership restrictions in some markets, a Republican-controlled Federal Communications Commission (FCC) in the U.S., the forthcoming introduction of the General Data Protection Regulation (GDPR) in Europe, or debates over net neutrality, the regulatory docket is full of both opportunities and challenges. Although it’s difficult to predict what the impact will be on future E&M spend levels, these shifts could alter the climate for many investors and businesses.
Impacts in specific countries Russia, a 2014 ruling that banned pay-TV China, the world’s most populous advertising was amended in February country and the second-largest E&M 2015 to avoid a collapse of multichannel market, is on the radar screen of every advertising. But the amendment major E&M organization. But censorship stipulated that channels must show 75 and other regulatory constraints play a percent local content (many top sports significant role in inhibiting investments. channels have been given an exemption). Although both Netflix and Amazon Another example can be seen in the expanded their services “globally” in book industry (see Exhibit 26). In many 2016, neither will compete directly in markets, a sharp increase in online book the highly regulated Chinese market. In sales (of both print and digital books) withdrawing from its original plan to has compensated for a decline of sales operate in China, Netflix announced it in retail channels. But because so many will instead license content to existing countries in Europe, the Middle East, online distributors in the country. and Africa (EMEA) have fixed-price book China’s streaming markets are not the laws, consumers in those countries have only markets where new regulations not been able to take advantage of deep 7 affect local strategies. For example, in discounts from online publishers.
38 Global entertainment and media outlook 2017 –2021
PwcOutlook_22-C4-fin1.indd 38 5/1/17 3:45 PM Exhibit 26: Total, consumer, educational, and professional books revenue CAGR (%) by region, 2016–21 EMEA will shrink while other regions see growth
1.0% North America 2.9% -1.5% 0.0%
-0.2% -0.5% EMEA 0.5% -0.5%
2.5% 2.5% Asia-Pacific 2.5% 2.2%
0.7% Latin America 0.6% 0.1% 1.7%
1.1% Total 1.6% 0.5% 0.5%
Total Consumer Educational Professional Source: Global entertainment and media outlook 2017−2021, PwC, Ovum
Global uncertainty over net Outside the U.S., net neutrality laws Governments and neutrality have been passed in many markets and In the U.S., the FCC sets the standards are under consideration in others. The regulatory bodies for Internet service providers. These Dutch government is taking a tougher standards encompass net neutrality — stance in its interpretation of European in many markets and there may be changes under the Union (E.U.) rules on net neutrality than are taking steps to Trump administration. In November many other E.U. member states; it favors 2014, President Obama opposed the banning online service providers from reduce the dominance practices of blocking or throttling paying for preferential access. At the of incumbents and content, or offering higher speeds to same time, governments and regulatory customers willing to pay for them. bodies in many markets are taking increase competition in Following various court decisions regulatory and legal steps to reduce the both fixed and mobile backing the principle of net neutrality dominance of incumbents and increase between 2014 and 2016, the FCC pressed competition in both fixed and mobile Internet coverage. ahead with its regulatory agenda, Internet coverage. Efforts are particularly including proposals to “unlock” the set- notable in some Latin American and Efforts are notable in top box to usher in a more competitive MENA countries that have been slower to some Latin American environment for video content. The FCC open to competition than those in other has launched a proposal to roll back parts of the world. and MENA countries. the nation’s net neutrality rules and set the stage for tech companies and Internet service providers to reopen the debate over the future of the Web.
Regulation 39
PwcOutlook_22-C4-fin2-050417.indd 39 5/4/17 11:47 AM Privacy IP protection remains fragmented Privacy regulation continues to have Copyright infringement remains a major implications for E&M user problem in many markets; rights holders experiences and the role of brands are in a constant battle against pirates. within E&M digital media ecosystems. One favored approach aimed at reducing Companies continue navigating the fine unlawful file sharing is “graduated line between delighting customers and response” (also known as three strikes). annoying them — or even alienating But the use of graduated response, under them. In the U.S., President Trump which copyright violators can ultimately recently signed congressional legislation have their accounts suspended, is that repeals FCC privacy protection for uneven, and opinions vary as to its Internet users. This means that, like effectiveness. Since the U.S. decided in Internet service companies, telecom January 2017 to shutter its program, providers will not be required to ask Canada is the only country in North consumers for permission to collect, America that has a graduated-response store, share, or sell certain types regime in place to deter illicit behavior. of customer data. The change puts By contrast, the U.K. set up its first Verizon, Comcast, and AT&T on a level graduated-response program in early footing with tech giants such as Google, 2017 as leading ISPs joined forces with Facebook, Amazon, and Netflix, but it content owners to start sending out was viewed as a setback for consumer millions of warnings to those engaging in privacy by many Internet activist groups. infringing activities. Ironically, it comes at a time when E.U. The U.K. initiative’s effectiveness is regulatory changes are driving toward likely to be measured against France’s greater protection of the personal data similar HADOPI effort. Although it has of E.U. citizens. The E.U.’s GDPR, due sent out 7.5 million first-warning notices for introduction in May 2018, has data since its 2009 launch, HADOPI has security implications for E&M companies been criticized for its perceived failure. that operate in Europe and throughout Meanwhile, in Russia, the authorities the rest of the world. have been promising to close down the Privacy regulation is evolving elsewhere. many popular BitTorrent sites operating In the 21-country Asia-Pacific Economic in the country; telecom and media Cooperation (APEC) forum, for example, regulator Roskomnadzor vows to block more members are now becoming leading operations. In Latin America, compliant with APEC’s cross-border where piracy is a significant problem, privacy rules (CBPR) system for data. DirecTV Latin America has joined with And in Latin America, countries are other subscription TV operators to create developing data protection laws. Some an anti-piracy group. Dubbed Alianza, it of these laws mirror E.U. data protection works with governments and regulators rules, as is the case in Argentina. But to combat the problem. By contrast, the laws under development vary from in Japan, the potential for the Internet country to country. video business is boosted by stringent regulations countering online piracy: Japanese Internet users who illegally download files face up to two years in prison and heavy fines.
40 Global entertainment and media outlook 2017 –2021
PwcOutlook_22-C4-fin1.indd 40 5/1/17 3:45 PM Index
Segments Countries B2B content 15, 16 Argentina 40 Nigeria 14, 15 books 16, 38, 39 Australia 14, 34 Norway 14 cinema 15, 16, 17, 22, 33 Belgium 14 Pakistan 14, 15 data consumption 31 Brazil 14, 18, 33 Peru 14 e-sports 15, 16, 29, 30, 31 Canada 14, 17, 40 Philippines 14 Internet access 16, 17, 24, China 12, 14, 15, 18, 24, Portugal 32, 33 25, 28, 32, 33, 39 27, 28, 29, 30, 31, 32, 33, Romania 14 34, 35, 37, 38 Internet advertising 15, Russia 14, 17, 30, 38, 40 16, 23, 24, 28 Denmark 14 South Africa 17, 23 Internet video 15, 16, 23, Egypt 14, 15 25, 27, 34 South Korea 14, 29, 30, Finland 14, 32, 33 33 magazines 15, 16, 28, France 14, 18, 23, 30, 32, 33 Spain 14, 30, 32, 33 34, 40 music 14, 16, 17, 24 Sweden 14, 32, 33 Germany 14, 23, 29, 30, newspapers 15, 16, 21, 33, 34 Switzerland 14, 15 28, 34 India 14, 15, 17, 32, 33 Thailand 14 out of home advertising Indonesia 14, 15 Turkey 14 16 Ireland 33 U.A.E. 14 radio 16 Israel 14 United Kingdom 14, traditional TV and home 15, 17, 18, 23, 30, 34, video 16, 20, 21, 23, 24, Italy 14, 30 37, 40 27, 30, 34, 36 Japan 14, 15, 17, 30, United States 12, 14, TV advertising 15, 16, 38 31, 40 15, 16, 17, 18, 19, 21, 23, video games 16, 30, 33 Malaysia 14 24, 25, 30, 31, 34, 36, 37, 38, 39, 40 virtual reality 15, 16, 19, Mexico 14 29, 30, 31, 35 Vietnam 15 Netherlands 14, 18, 37 New Zealand 14
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