The media environment still presents numerous growth opportunities despite the competitive marketplace and the struggle for consumer attention. Importantly, PwC’s Annual Global Entertainment and Media Outlook Report projects the U.S. media and entertainment revenue will increase and account for $632 billion, or 29.4% of the worldwide total of over $2.1 trillion. Further, the entertainment and media revenues are expected to grow at a compound rate (CAGR) of 4.4% from $1.7 trillion in 2015 to $2.1 trillion in 2020. In order to provide this forecast for 2016 to 2020, PwC analyzed historical and projection data for advertising and consumer spending in 13 major industry segments across 54 countries.
- Internet advertising in the U.S. continues as the largest market in internet advertising revenue, projected to grow from $59.6 billion in 2015 to $93.5 billion by 2020 with a 9.4% CAGR. Important to note, internet advertising ($75.3 billion) is expected to surpass broadcast TV advertising ($70.4 billion) in 2017.
- Mobile has been a key driver of digital advertising revenue comprising 34.7% or $20.7 billion in 2015 of U.S. total internet revenue. PwC projects mobile video advertising revenue will grow from $3.5 billion in 2015 to $13.3 billion in 2020 for an increase of 30.3% CAGR.
- Video on Demand (VOD) and over-the-top services (OTT) will drive TV and video revenue from $121.4 billion to $124.2 billion in 2020 (0.5% CAGR). In addition, TV advertising revenue is expected to rise from $69.9 billion to $81.7 billion in 2020 (3.2%CAGR).
- Continued declines are anticipated for newspaper publishing, declines of 2.9% CAGR by 2020. Further publisher consolidations are expected. As well, magazine publishing revenue is not expected to decline but register a fractional increase, from $30.5 billion in 2015 to $30.7 billion in 2020. In addition, radio is predicted to increase from $21.4 billion to $23.1 billion in 2020 (1.6% CAGR).
- Virtual reality devices and games will be the impetus for rising video games revenue from $17.0 billion to $20.3 billion by 2020 (3.6% CAGR). Virtual reality devices and games will be the impetus for rising video games revenue from $17.0 billion to $20.3 billion by 2020 (3.6% CAGR).
Overall, PwC projects that consumers will look for less expensive content bundles, streaming offers and less commercial interruptions. As a result, consumers’ share of time for ad-supported media will not increase. For advertisers and content providers, this means a detailed examination of the consumer experience to identify drivers of engagement and understand their impact on time spent and their influence on advertising effectiveness.