by FilmInk Staff
Back in mid-2019, a new series of buzzwords began to infiltrate mainstream media, words like novel corona virus, pandemic and Covid-19. Now, having spent two years under the shadow of the pandemic, we are starting to see the statistical side of disaster emerge.
One of the most impacted, and blatantly neglected industries in Australia was the arts and entertainment sector, with live venues, cinemas and festivals left out to dry. But with a vaccine roll-out slowly taking hold in Australia, hindered by a series of false starts, the industry is starting to show signs of a protracted recovery. A trend supported by the release of Price Waterhouse’s annual Australian Entertainment & Media Outlook report.
And while the optimism is abundant, the report itself decries the necessity for approaching any forecast with a respectful sanguineness “With the vaccine rollout taking longer than originally anticipated, international borders unlikely to re-open until 2022, and sporadic lockdowns a part of the “new normal”, approaching forecasting with a “ranged” approach remains appropriate for the market for the time being…
“Crucially, when providing the quantified forward view of the market via a Compound Annual Growth Rate (CAGR), we have taken into account the six years of 2019-2025, rather than the usual five-year range of 2020-2025. This extended CAGR allows for us to provide a more realistic projection… and ensures that the base from which we are reporting is not distorted.”
With the report now available to view online in detail, some of the more pertinent details indicate a positive, yet lethargic outlook as the ‘new normal’ begins to stabilise, and along with it, the methods and portals consumers have adapted to and embraced as their new preferred ways to access content.
As consumers stayed home, and in-person venues shut down, use of digital services soared. While cinema box office revenues fell 67.4% in 2020, this was contrasted by increased availability, sector breadth and catalogue depth of the streamers, increased BVOD [Broadcast VOD] usage, and the sustained growth of the gaming and esports sector.
Australia saw significant growth as established players such as Netflix, Amazon and Stan expanded their content libraries. Binge and BritBox also entered the market, and relative newcomers such as Disney+ used the opportunity to try different business models, including Premium Video on Demand (PVOD) for new release movies.
There was significant growth in audiences watching live streams of esports events and the market for gaming content is on track to be valued globally at AU$102 billion by 2025. Twitch has now become a leader in entertainment platforms with users spending an average of three hours on the platform, compared to Netflix users who only spend an average of two hours streaming per day.
PwC Australia Partner Samantha Johnson said, “One of the most profound impacts we’ve seen from digital disruption in recent times has been the increased use and prevalence of non-advertising supported platforms. The shift in weighting from advertising revenues towards consumer generated revenues has accelerated, forcing a number of key players to rethink their business model, in a world where the expectation is that consumers can access an ad-free or personalised service, but they have to be prepared to pay for it.”
Highlights from the report include:
- In 2020, the overall entertainment and media industry in Australia declined 3.6% – an unprecedented drop that had an asymmetrical impact across the sector.
- Despite the challenges of 2020, 2021 is showing signs of a strong recovery for most, although the shadow of COVID-19 has not yet left the sector.
- Consumer revenue is set to grow to A$52.6 billion in 2025, at a CAGR of 3.3% while advertising revenue is set to grow to A$19.6 billion in 2025, at a CAGR of 2.6%.
- Internet advertising recorded growth of 3.3% in 2020 reaching AU$9.3 billion and is expected to grow at 5.5% over the forecast period to 2025 based on the midpoint scenario.
- Streaming Video On Demand (SVOD) revenues will grow at a 20.4% CAGR through to 2025, becoming a US$81.3 billion industry globally, and an estimated AU$3.3 billion in Australia.
- Broadcast Video on Demand (BVOD) revenue grew 38.8% in 2020, and will continue to grow with a CAGR of 32.7% over the forecast period to 2025, continuing to grow its overall share of attention.
- Interactive games and esports revenue in Australia reached AU$3.4 billion in 2020, and is expected to increase to AU$4.9 billion in 2025 at a healthy 7.5% CAGR.
- Out-of-Home (OOH) saw a 39.0% decrease in year-on-year revenue to AU$772 million, although it is starting to see a recovery, with year-on-year revenue continuing to improve since the second quarter of 2020 (April – June).
Bespoke research conducted by PwC Australia for the Australian Outlook demonstrated that content appetite changed over the course of the pandemic, and the elasticity of this appetite is determining how likely people are to try new products, services of content platforms.
To view the 20th Edition of PwC’s Australian Entertainment and Media Outlook in full, click here.
To view the Global Entertainment and Media Outlook, click here.
