www.pwc.ch/outlook Swiss Entertainment and Media Outlook 2014 Contents
Executive Summary 3
Media Trends 6
Innovative Revenue Models 9
Internet Access Spending 13
Internet Advertising 18
TV Subscriptions and Licence Fees 23
Television Advertising 28
Music 33
Filmed Entertainment 38
Video Games 43
Radio 48
Out of Home 53
Consumer Magazine Publishing 58
Newspaper Publishing 63
Page 2 Swiss Entertainment and Media Outlook 2014 Executive Summary Introduction The overall trend in the Swiss media and entertainment market is the ongoing shift from physical to digital distribution. Nevertheless, Swiss Entertainment and Media Market the outlook for most segments remains quite stable for the coming per Year and Sector five years. Thus in this section we provide merely a snapshot of
15000 the potentially most disruptive issues in the industry segments discussed below. If you are interested in gaining deeper insight into a given industry, we invite you to browse through the particular
10000 section. Most segments of the Swiss media and entertainment market man- aged to grow last year, but some of them are being forced to face 5000 CHF millions the consequences of their outdated business models. The segments consumer magazine publishing, newspaper publishing and filmed entertainment recorded lower revenues. It is no coincidence that 0 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 those particular segments are struggling with a declining market volume. They are still having trouble implementing viable business
Internet Access Spending Internet Advertising TV Subscriptions and Licence Fees Television Advertising Music Filmed Entertainment Video Games models that integrate digital distribution in a useful and profitable Radio Out of Home Advertising Consumer Magazine Publishing Newspaper Publishing manner. However, companies that anticipated this trend were able to garner dominant positions in the market within a short time. Analysis by PwC Swiss Entertainment and Media Market Growth As can be seen in the chart below, the overall entertainment and per Sector (%) media market is predicted to grow by 2.2 per cent annually through 20% 2018. The main drivers fostering this upward trend are internet access spending, internet advertising and television advertising, which have an above-average forecast for the given period. 10% Growth 0%
-10% Internet Internet TV Television Music Filmed Video Games Radio Out of Home Consumer Newspaper Access Advertising Subscriptions Advertising Entertainment Advertising Magazine Publishing and Licence Publishing Fees
Growth 2013 CAGR 2014-2018
Analysis by PwC
Page 3 Swiss Entertainment and Media Outlook 2014 Video games – smartphone games attract a Music – disrupting the disruptor In 2013 the digital distribution segment was already 1.5 times the size of the physical distribution segment and demonstrates a trend One of the early and very impressive examples of the disruptive new clientele line that is clearly shifting upwards, while the physical segment is shift from physical to digital distribution in entertainment and predicted to decline. We expect this trend to continue and eventu- media is the music segment. While the first digital shift was the ally lead to a complete displacement of physical distribution at general trend towards digital distribution with the option for some point. On the other hand, the fast growth of digital music consumers to buy songs online on platforms such as iTunes, we are Video Games implies that the demand for digital distribution was present for a now observing a phenomenon in this industry segment that we call long time. A lack of download options or the right pricing model the “second wave of digital disruption”. Although the means of dis- CAGR could have caused some customers to opt for illegal downloads tribution remains digital, new business