www.pwc.com/pt The collaborative future: reshaping for consumer relevance and engagement Lisbon, 30 September 2011 Global entertainment & media outlook Marcel Fenez Global Leader, Entertainment & Media
Agenda 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 Slide 2
2010: the E&M industry emerges from recession
2010 growth: stronger than expected Internet Advertising TV Advertising Internet Access TV Subscriptions Video Games Radio Total Out-of-Home Advertising Filmed Entertainment Consumer and Educational Book Publishing Consumer Magazine Publishing Newspaper Publishing Business-to-Business Recorded Music 1-10.0-5.0 0.0 5.0 10.0 15.0 20.0 Note:1 does not include cinema advertising Actual growth Projected growth Slide 4
The Outlook to 2015
Entertainment and media growth rates 2011 2015 (Globally 5.7% CAGR) Slide 6
Entertainment and media growth rates 2011 2015 UK 3.7% Germany 3.4% US 4.6% France 4.0% Japan 2.5% Mature: 3.9% Slide 7
Entertainment and media growth rates 2011 2015 UK 3.7% Germany 3.4% Russia 11.7% US 4.6% France 4.0% China 11.6% Japan 2.5% Brazil 11.4% India 13.0% Mature: 3.9% BRIC: 11.7% Slide 8
Entertainment and media growth rates 2011 2015 UK 3.7% Germany 3.4% Russia 11.7% US 4.6% France 4.0% Turkey 13.2% China 11.6% Japan 2.5% Mexico 8.7% Vietnam 17.3% Columbia 11.2% Brazil 11.4% MENA 16.1% Pakistan 23.7% India 13.0% Indonesia 11.9% South Africa 9.2% Mature: 3.9% BRIC: 11.7% Golden8: 12.7% Slide 9
Growth by segment % CAGR 2011-2015 Internet Advertising Internet Access Video Games TV Subscriptions TV Advertising Filmed Entertainment Out-of-Home Business-to-Business Radio Consumer Magazine Publishing Consumer and Educational Book Publishing Newspaper Publishing Recorded Music -4-2 0 2 4 6 8 10 12 14 16 Portugal Global Slide 10
Broadband penetration Mature vs. BRIC vs. Golden 8 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Mature Portugal Golden 8 BRIC Slide 11
Mobile penetration (Mobile Internet/Wireless Subs) Mature vs. BRIC vs. Golden 8 60% 50% 40% 30% 20% 10% 0% 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Mature Portugal Golden 8 BRIC Slide 12
Unit sales - millions Smart devices drive spending on E&M content 1400 1200 1000 800 600 400 200 0 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 e-reader Tablet Smartphone Slide 13
Advertising spending
US$ millions Advertising revenues to 2015 350,000 CAGR 2011-2015 3.9% 300,000 250,000 200,000 150,000 100,000 12.8% 50,000 0 2010 2011 2012 2013 2014 2015 Mature BRIC Golden 8 Portugal 8.9% 2.9% Slide 15
Advertising revenue growth to 2015 BRIC Golden 8 Mature Portugal 0 2 4 6 8 10 12 14 %CAGR 2011-2015 Slide 16
Digital advertising global share 2010 and 2015 2010 2015 Digital; 15.9% Digital; 22.5% Nondigital; 84.1% Nondigital; 77.5% Slide 17
Digital vs. non-digital advertising Mature vs. BRIC vs. Golden 8 Mature vs. BRIC vs. G8 Advertising Digital vs. Non Digital 350,000 26.2% 300,000 18.4% 250,000 200,000 150,000 100,000 50,000 11.0% 17.3% 3.2% 6.2% - 2010 2015 2010 2015 2010 2015 Mature BRIC G8 Non-digital Digital Slide 18
Global advertising spending by segment 2010 2015 Television - excl. mobile and online 38% Other 9% Out-of-Home 6% Consumer Magazines - print 6% Television - excl. mobile and online 38% Other 6% Out-of-Home 6% Consumer Magazines - print 6% Radio 6% Radio 7% Digital advertising 16% Digital advertising 23% Newspapers - print 18% Newspapers - print 15% By platform Slide 19
Global advertising spending by segment 2010 2015 Television 38% Other 11% Out-of-home 6% Consumer magazines 6% Television 40% Other 9% Out-of-home 6% Consumer magazines 6% Radio 7% Radio 6% Internet advertising 12% Internet advertising 16% Newspapers 20% Newspapers 17% By ownership Slide 20
Portugal advertising spending by segment 2010 2015 Directories and trade magazines Internet advertising 3% 5% Radio 5% Other 1% Internet advertising 5% Directories and trade magazines 3% Radio 4% Other 2% Newspapers 7% Newspapers 7% Out-of-home 10% Television 52% Out-of-home 10% Television 54% Consumer magazines 17% Consumer magazines 15% Slide 21
Consumer/end-user spending
%CAGR 2011-2015 Global consumer spending growth 10 8 6 4 2 0-2 Video games TV subscriptions and license fees Filmed entertainment Business-to-business Radio Consumer and educational books Newspapers Consumer magazines Recorded music Slide 23
Digital consumer spending Mature 2010 2015 Digital 6% Digital 11% Non-digital 94% Non-digital 89% Slide 24
Digital consumer spending BRIC 2010 2015 Digital 10% Digital 16% Non-digital 90% Non-digital 84% Slide 25
Digital consumer spending Golden 8 2010 2015 Digital 4% Digital 6% Non-digital 96% Non-digital 94% Slide 26
Global consumer spending in 2015 Digital vs non-digital TV Subscriptions and License Fees Business-to-Business Consumer and Educational Books Filmed Entertainment Video Games Newspapers Consumer Magazines Recorded Music Radio 0 50 100 150 200 250 300 $billion Digital 2015 Non-digital 2015 Slide 27
Consumer spending in Portugal - growth to 2015 TV subscriptions Video games Radio Filmed entertainment Business-to-business Newspapers Consumer and educational books Consumer magazines Recorded music -4-2 0 2 4 6 8 10 %CAGR 2011-2015 Slide 28
Digital Share of total E&M revenues Portugal vs. other markets Golden 8 Spain Portugal BRIC Global UK Mature 2010 2015 France Germany Ireland 0% 5% 10% 15% 20% 25% 30% 35% 40% 45% 50% Digital share of E&M revenues Slide 29
The collaborative future...... reshaping for consumer relevance and engagement
1. The digitally empowered consumer 2. The involved advertiser 3. Collaboration: the route to competitive advantage Slide 31
A golden age for the digitally empowered consumer 01
What will people pay for? Convenience Experience Quality Participation Privilege Leads to sustainable, profitable and engaged relationships with the consumer Advantages outweigh attractiveness of free and pirated content Slide 33
How do people access? Ownership Streaming Storage on device Storage in the cloud Slide 34
The involved advertiser 02
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
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
Collaboration: the route to competitive advantage 03
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
The route to success in the emerging digital environment Digital Demand Data Slide 40
Imperatives for future success Data mining Data security Future-proofing content End-to-end digital workflow Digital talent management Slide 41
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