PwC Entertainment and Media Outlook, Part 1: Global results

Financial Times, sourced from PwC data

PwC has published its 18th Global Entertainment and Media Outlook 2017-2021. The annual report offers intensive analysis of several entertainment industries around the world. For music, the outlook seems positive for a digital future, with streaming expected to be the top source of global revenue for the sector. If that prediction bears out, 2017 would be the first year when digital revenue will exceed physical sales on a worldwide scale. Today we’ll dive into the global data, and tomorrow will focus on just the U.S. analysis.

Global revenues for entertainment and media are expected to increase from $1.8 trillion in 2016 to $2.2 trillion in 2021, based on a projected compound annual growth rate of 4.2%. Last year predicted a CAGR of 4.4%.

In the music industry, total recorded music sales are expected to hit $23.4 billion, up 5.2%. The report estimated that global streaming revenues will grow 37% in 2017 to $9.1 billion. On the other hand, physical format sales are projected to drop about 10% to $7.7 billion. Some markets are still reliant on sales of CDs for the majority of their domestic revenue, but the United States is one of the leading markets in the shift toward a majority digital share.

Even within the growing digital umbrella, streaming has grown to be the lion’s share of revenue and overshadow downloads. Streaming’s portion of overall digital revenue has increased from 18% in 2012 to an estimated 73% in 2017. Downloads have correspondingly declined from a 70% digital revenue share in 2012 to a projected 23% in 2017.

PwC predicted an increasing focus on the customer experience in entertainment as critical for driving success. The report pointed to eight new technologies that could help to improve that user experience. For music, the most relevant new ideas are access over ownership, data analytics, artificial intelligence, and the Internet of Things.

“Consumers want to get closer, more engaged and better connected with the stories they love – both in the physical and digital worlds,” said Deborah Bothun, PwC’s Global Entertainment & Media Leader. “At the same time, companies can start to empower those experiences through a number of emerging technologies. Perhaps big data and artificial intelligence will create the most dramatic change, redefining how the industry can connect with all stakeholders and drive growth. We’re already seeing a number of ways that AI is being used to personalize, customize and curate entertainment content and experiences at scale.”

Anna Washenko