The overall Australian entertainment and media market is projected to grow steadily over the next five years, driven primarily by the online and subscription TV sectors.
However the filmed entertainment industry and free to-air television broadcasters can expect marginal growth while newspapers and magazines continue to decline.
That’s according to PwC’s Australian Entertainment and Media Outlook 2013-2017 released today.
“In a mature market businesses that are supported by advertising are going to be a bit flat so it’s a reasonably damp forecast for free-to-air TV,” PwC executive director Megan Brownlow told IF.
“But if you are supported more by subscription revenues or direct from consumer revenues things are rosier. As people do more online and mobile devices get more penetration there is a healthy correlation to spending on entertainment and media.”
PwC expects the total Australian media and entertainment market to expand from $30.9 billion in 2012 to $35.7 billion in 2017 at a compound annual growth rate (CAGR) of 2.9%.
Filmed entertainment revenues dropped by 3% to $2.8 billion last year, dragged down by a 7.6% slump in home entertainment. The firm predicts the sector will turnaround by 2015 and show a slim 0.4% CAGR to reach $2.9 billion in 2017.
Box-office revenues are projected to grow by 4.4% annually to $1.4 billion in 2017, with a 2.1% annual gain in admissions from 87 million last year to 96 million. However Brownlow acknowledges that in predicting the trend-line in a hits-driven business that “we get it wrong as often we get it right.”
Roadshow was the leading film distributor last year with a market share of 18%, pipping Universal and Fox which both had 17%, followed by Sony’s 14%, Disney’s 10% and Warner Bros. and Paramount both at 8%. The independents’ combined share was 8%.
The folks at Val Morgan will be encouraged by predictions that cinema advertising revenues will ramp up from $98 million last year to $126 million in 2017.
Home entertainment revenues are expected to decline from $1.6 billion to $1.4 billion over five years, with in-store rental revenues falling from $437 million to $319 million and sell-through tumbling from $1.05 billion to $563 million.
The slump in physical transactions will be offset only partly by online DVD subscriptions and digital downloads which are forecast to jump from $143 million to $543 million.
By 2016 the digital market will overtake the physical rental market, according to PwC, boosted by the roll-out of the National Broadband Network which will facilitate legal downloads.
“We will see many more Australian businesses moving into to the streamed film and TV market,” Brownlow said.