Global entertainment & media outlook Marcel Fenez Global Leader, Entertainment & Media
The collaborative future: reshaping for consumer relevance and engagement Lisbon, 30 September 2011
www.pwc.com/pt
PwC
Internet access spending
Internet advertising
TV subscriptions and license fees
Television advertising
Recorded music
Filmed entertainment
Video games
Consumer magazine publishing
Newspaper publishing
Radio
Out-of-home advertising
Consumer and educational book publishing
Business-to-business
Agenda
Slide 2
30 Setembro 2011 Global Entertainment & Media Outlook 2011-2015
2010: the E&M industry emerges from recession
PwC
-10.0 -5.0 0.0 5.0 10.0 15.0 20.0
Recorded Music
Business-to-Business
Newspaper Publishing
Consumer Magazine Publishing
Consumer and Educational Book Publishing
Filmed Entertainment†
Out-of-Home Advertising
Total
Radio
Video Games
TV Subscriptions
Internet Access
TV Advertising
Internet Advertising
Actual growth Projected growth
2010 growth: stronger than expected
Note:1 does not include cinema advertising
1
Slide 4
30 Setembro 2011 Global Entertainment & Media Outlook 2011-2015
The Outlook to 2015
PwC
Entertainment and media growth rates 2011 – 2015 (Globally 5.7% CAGR)
Slide 6
30 Setembro 2011 Global Entertainment & Media Outlook 2011-2015
PwC
Entertainment and media growth rates 2011 – 2015
US
4.6% France
4.0%
Germany
3.4% UK
3.7%
Japan
2.5%
Mature: 3.9%
Slide 7
30 Setembro 2011 Global Entertainment & Media Outlook 2011-2015
PwC
Entertainment and media growth rates 2011 – 2015
US
4.6% France
4.0%
Germany
3.4% UK
3.7%
Japan
2.5%
China
11.6%
Russia
11.7%
India
13.0%
Brazil
11.4%
Mature: 3.9% BRIC: 11.7%
Slide 8
30 Setembro 2011 Global Entertainment & Media Outlook 2011-2015
PwC
Entertainment and media growth rates 2011 – 2015
US
4.6% France
4.0%
Germany
3.4% UK
3.7%
Japan
2.5%
China
11.6%
Russia
11.7%
India
13.0%
Brazil
11.4%
Turkey
13.2%
MENA
16.1%
South Africa
9.2%
Indonesia
11.9%
Pakistan
23.7%
Vietnam
17.3%
Columbia
11.2%
Mexico
8.7%
Mature: 3.9% BRIC: 11.7% Golden8: 12.7%
Slide 9
30 Setembro 2011 Global Entertainment & Media Outlook 2011-2015
PwC
Growth by segment
-4 -2 0 2 4 6 8 10 12 14 16
Recorded Music
Newspaper Publishing
Consumer and Educational Book Publishing
Consumer Magazine Publishing
Radio
Business-to-Business
Out-of-Home
Filmed Entertainment
TV Advertising
TV Subscriptions
Video Games
Internet Access
Internet Advertising
% CAGR 2011-2015
Portugal Global
Slide 10
30 Setembro 2011 Global Entertainment & Media Outlook 2011-2015
PwC
Broadband penetration Mature vs. BRIC vs. Golden 8
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Mature Portugal Golden 8 BRIC
Slide 11
30 Setembro 2011 Global Entertainment & Media Outlook 2011-2015
PwC
Mobile penetration (Mobile Internet/Wireless Subs)
Mature vs. BRIC vs. Golden 8
0%
10%
20%
30%
40%
50%
60%
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Mature Portugal Golden 8 BRIC
Slide 12
30 Setembro 2011 Global Entertainment & Media Outlook 2011-2015
PwC
Smart devices drive spending on E&M content
0
200
400
600
800
1000
1200
1400
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Un
it s
ale
s -
millio
ns
e-Reader Tablet Smartphone
Slide 13
30 Setembro 2011 Global Entertainment & Media Outlook 2011-2015
Advertising spending
PwC
Advertising revenues to 2015
0
50,000
100,000
150,000
200,000
250,000
300,000
350,000
2010 2011 2012 2013 2014 2015
US
$ m
illio
ns
Mature BRIC Golden 8 Portugal
3.9%
12.8%
8.9%
2.9%
CAGR 2011-2015
Slide 15
30 Setembro 2011 Global Entertainment & Media Outlook 2011-2015
PwC
Advertising revenue growth to 2015
0 2 4 6 8 10 12 14
Portugal
Mature
Golden 8
BRIC
%CAGR 2011-2015
Slide 16
30 Setembro 2011 Global Entertainment & Media Outlook 2011-2015
PwC
Digital advertising global share 2010 and 2015
Digital; 15.9%
Non-digital; 84.1%
Digital; 22.5%
Non-digital; 77.5%
2010 2015
Slide 17
30 Setembro 2011 Global Entertainment & Media Outlook 2011-2015
PwC
Digital vs. non-digital advertising Mature vs. BRIC vs. Golden 8
18.4%
26.2%
11.0%
17.3%
3.2% 6.2%
-
50,000
100,000
150,000
200,000
250,000
300,000
350,000
2010 2015 2010 2015 2010 2015
Mature BRIC G8
Mature vs. BRIC vs. G8 Advertising Digital vs. Non Digital
Non-digital Digital
Slide 18
30 Setembro 2011 Global Entertainment & Media Outlook 2011-2015
PwC
Global advertising spending by segment
Other 9%
Out-of-Home 6%
Consumer Magazines -
print 6%
Radio 7%
Digital advertising
16%
Newspapers - print 18%
Television - excl. mobile and online
38%
Other 6% Out-of-Home
6% Consumer Magazines -
print 6%
Radio 6%
Digital advertising
23%
Newspapers - print 15%
Television - excl. mobile and online
38%
2010 2015
By platform
Slide 19
30 Setembro 2011 Global Entertainment & Media Outlook 2011-2015
PwC
Global advertising spending by segment
2010 2015
By ownership
Other 11%
Out-of-home 6%
Consumer magazines
6%
Radio 7%
Internet advertising
12%
Newspapers 20%
Television 38%
Other 9%
Out-of-home 6%
Consumer magazines
6%
Radio 6%
Internet advertising
16%
Newspapers 17%
Television 40%
Slide 20
30 Setembro 2011 Global Entertainment & Media Outlook 2011-2015
PwC
Portugal advertising spending by segment
2010 2015
Television 52%
Consumer magazines
17%
Out-of-home 10%
Newspapers 7%
Directories and trade
magazines 5% Radio
5%
Internet advertising
3%
Other 1%
Television 54%
Consumer magazines
15%
Out-of-home 10%
Newspapers 7%
Internet advertising
5% Radio
4%
Directories and trade
magazines 3%
Other 2%
Slide 21
30 Setembro 2011 Global Entertainment & Media Outlook 2011-2015
Consumer/end-user spending
PwC
Global consumer spending growth
-2
0
2
4
6
8
10
Vid
eo
ga
me
s
TV
su
bscrip
tion
s
an
d lic
en
se
fee
s
Film
ed
en
terta
inm
en
t
Bu
sin
ess-to
-bu
sin
ess
Rad
io
Con
su
me
r an
d
ed
uca
tion
al b
oo
ks
New
sp
ap
ers
Con
su
me
r ma
ga
zin
es
Reco
rde
d m
usic
%C
AG
R 2
011
-2015
Slide 23
30 Setembro 2011 Global Entertainment & Media Outlook 2011-2015
PwC
Digital consumer spending Mature
2010 2015
Digital 6%
Non-digital 94%
Digital 11%
Non-digital 89%
Slide 24
30 Setembro 2011 Global Entertainment & Media Outlook 2011-2015
PwC
Digital consumer spending BRIC
2010 2015
Digital 10%
Non-digital 90%
Digital 16%
Non-digital 84%
Slide 25
30 Setembro 2011 Global Entertainment & Media Outlook 2011-2015
PwC
Digital consumer spending Golden 8
2010 2015
Digital 4%
Non-digital 96%
Digital 6%
Non-digital 94%
Slide 26
30 Setembro 2011 Global Entertainment & Media Outlook 2011-2015
PwC
Global consumer spending in 2015 Digital vs non-digital
0 50 100 150 200 250 300
Radio
Recorded Music
Consumer Magazines
Newspapers
Video Games
Filmed Entertainment
Consumer and Educational Books
Business-to-Business
TV Subscriptions and License Fees
$billion
Digital 2015 Non-digital 2015
Slide 27
30 Setembro 2011 Global Entertainment & Media Outlook 2011-2015
PwC
Consumer spending in Portugal - growth to 2015
-4 -2 0 2 4 6 8 10
Consumer magazines
Consumer and educational books
Newspapers
Business-to-business
Filmed entertainment
Radio
Video games
TV subscriptions
%CAGR 2011-2015
Recorded music
Slide 28
30 Setembro 2011 Global Entertainment & Media Outlook 2011-2015
PwC
Digital Share of total E&M revenues Portugal vs. other markets
0% 5% 10% 15% 20% 25% 30% 35% 40% 45% 50%
Ireland
Germany
France
Mature
UK
Global
BRIC
Portugal
Spain
Golden 8
Digital share of E&M revenues
2010
2015
Slide 29
30 Setembro 2011 Global Entertainment & Media Outlook 2011-2015
The collaborative future... ... reshaping for consumer relevance and engagement
PwC
1. The digitally
empowered consumer
2. The involved advertiser
3. Collaboration: the route to competitive advantage
Slide 31
30 Setembro 2011 Global Entertainment & Media Outlook 2011-2015
A „golden age‟ for the digitally empowered consumer
01
PwC
What will people pay for?
Leads to sustainable, profitable and engaged relationships with the consumer
Convenience
Experience
Quality
Participation
Privilege
Advantages outweigh attractiveness of free and pirated content
Slide 33
30 Setembro 2011 Global Entertainment & Media Outlook 2011-2015
PwC
Streaming
Ownership
How do people access?
Storage in the cloud
Storage on device
Slide 34
30 Setembro 2011 Global Entertainment & Media Outlook 2011-2015
The involved advertiser
02
PwC
What does an „involved advertiser‟ look for?
• Engagement with ‘digital natives’ in their own space, e.g. social media.
• Personalised interaction.
• Compelling content and intensity of experience.
• Cross-platform reach – new devices and channels.
• Verifiable evidence of consumer engagement.
Slide 36
30 Setembro 2011 Global Entertainment & Media Outlook 2011-2015
PwC
Greater involvement is being achieved by...
• Social media creates social intelligence.
• TV and Video Games’ strength comes from cross-platform integration.
• Location-based marketing and addressable advertising.
• Digital billboards and smartphones offer interactive experiences.
• Advertisers are collaborating, experimenting and innovating.
Slide 37
30 Setembro 2011 Global Entertainment & Media Outlook 2011-2015
Collaboration: the route to competitive advantage
03
PwC
Operating model for the digital future: the Collaborative Digital Enterprise
“An enterprise that is
dynamic, interconnected,
and continuously engaged
with its entire customer,
employee and supplier
ecosystem , through
technology”
Slide 39
30 Setembro 2011 Global Entertainment & Media Outlook 2011-2015
PwC
The route to success in the emerging digital environment
Data
Demand
Digital
Slide 40
30 Setembro 2011 Global Entertainment & Media Outlook 2011-2015
PwC
Imperatives for future success
Data mining
Data security
Future-proofing content
End-to-end digital workflow
Digital talent management
Slide 41
30 Setembro 2011 Global Entertainment & Media Outlook 2011-2015
PwC
Questions The complete picture: www.pwc.com/outlook
© 2011 PwC. All rights reserved. Not for further distribution without the permission of PwC. “PwC” refers to the network of member firms of
PricewaterhouseCoopers International Limited (PwCIL), or, as the context requires, individual member firms of the PwC network. Each member
firm is a separate legal entity and does not act as agent of PwCIL or any other member firm. PwCIL does not provide any services to clients.
PwCIL is not responsible or liable for the acts or omissions of any of its member firms nor can it control the exercise of their professional
judgment or bind them in any way. No member firm is responsible or liable for the acts or omissions of any other member firm nor can it control
the exercise of another member firm’s professional judgment or bind another member firm or PwCIL in any way.