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CHAPTER HEADING
ACCOUNTANCY IRELAND
FEBRUARY 2015 VOL.47 NO.1
MEDIA PREDICTIONS
F
For Ireland’s entertainment and media sector, the future
is decidedly digital, suggests Amy Ball.
rom internet advertising to video
games, from film entertainment and
TV to licenses and advertising, from
news and magazines to music, radio
and out of home advertising –
globally the entertainment and media sector
is expected to grow by a compound annual
growth rate of 5% in the next five years. In
Ireland, the corresponding growth figure is
2.3% with the difference accounted for by
the fact that the global rate includes
developing countries where a rising middle
class is leading to a corresponding increase
in the size of the available market.
In Ireland, the entertainment and media
landscape is changing significantly with the
growth driven by digital rather than
traditional media forms. And ‘digital’ is no
longer just about technology; it is about
creating a new mind set towards doing
business where technology is the enabler in
personalised customer-centric organisations.
Consumers are already aware that they can
be at the centre of their own world of
entertainment and media, switching from
finding content experiences they have liked
to be being found by content experiences
they will like – via every channel and device.
Today’s consumer is connected 24/7 using
smartphones, tablets, laptops and desktops.
To be successful into the future, E&M
organisations will need to focus on
developing closer relationships with their
customers and being able to interact with
the consumer seamlessly across all devices
and platforms.
Delivering such an experience relies on
more than data and analytics; it requires
getting to know people as individuals.When
this happens, the result is ‘relevance’. The
company that delivers relevance and
provides its customers with control over
their personal privacy stands to win a
disproportionate share of their customers’
loyalty.
KEY TRENDS IN THE SECTOR
➤ Advertising revenue is outpacing
consumer revenue in the migration to
digital.
Internet advertising in
Ireland is forecast to grow to €364m by
2018 (12.2% CAGR) helped by higher
broadband penetration. Currently,
according to Comreg, Ireland’s
household broadband penetration rate
is just 67%. This is predicted to rise to
80% by 2018.1 This is boosted by the
increased proliferation of smartphones
and tablets, forecast to increase to 89%
of connected devices on a combined
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CHAPTER HEADING
ACCOUNTANCY IRELAND
FEBRUARY 2015 VOL.47 NO.1
basis by 2018 (PwC, IDC research). By
2018, Internet advertising will be poised
to overtake TV as the largest advertising
segment (9% of overall E&M spend v
6%). Paid search e.g. placing ads on
webpages that show results of search
engine queries and display ads e.g.
banner ads are expected to experience
the strongest growth with video
advertising beginning to make an
impact.
➤ Newspaper publishing forecast to
decline. Newspaper publishing is
expected to account for 11% of spend
in Ireland by 2018, but it is declining at
the highest rate across all segments –
7.1% CAGR contraction across the
period 2013 to 2018.This is down to a
combination of reduced circulation and
a growing expectation amongst
consumers of getting content for free,
coupled with a corresponding decline
in newspaper advertising revenues as
internet advertising rises in popularity.
However, digital circulation of
newspapers is forecast to rise by 23.9%
CAGR which could provide a base to
leverage future growth in revenues if the
monestisation conundrum is cracked.
➤ TV subscriptions and license fees
forecast to remain strong. Subscription
TV is forecast to remain stable with
growth of 4% CAGR expected over the
period representing 12% of E&M
forecast value by 2018. This reflects the
healthy position of the sector assisted by
initiatives implemented to counter the
impact of over the top (OTT) providers
-- delivery of audio, video, and other
media over the Internet such as Netflix.
Electronic home video over-the-top
(OTT)/streaming and digital music
streaming are two of the fastest-growing
consumer sub-segments and are
expected to rise at a CAGR of 46.6%
and 12.6% respectively (albeit from low
bases).
The challenge to monetise digital growth
remains, but the E&M organisations who
excel in digital innovation will be well
placed to grow over the next five years.
1
PwC Irish Entertainment & Media Outlook 20142018
Amy Ball is Director (Advisory Consulting) with
PwC.
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