Pulling the future forward

The entertainment and media industry reconfigures amid recovery - Seite 2

One result is that E&M segments are being transformed much earlier than was originally projected. Take cinema box office versus subscription video on demand (SVOD). As recently as 2015, box office revenue was three times SVOD. SVOD revenue will overtake box office in 2020 and is projected to surge away in the coming five years, reaching more than twice the size of box office in 2024. Or consider the amount of data consumed on smartphones versus on fixed broadband. Having taken a small lead in 2019, the smartphone is now set to pull away as the leading individual device used by consumers to access the Internet globally.

Winners and losers emerge…

So, how are the shifts accelerated by COVID-19 playing out in different industry segments? With people staying at home, over-the-top (OTT) video has seen global revenue surge by 26.0% in 2020. And it will keep rising strongly in the coming years, almost doubling in size from US$46.4bn in 2019 to US$86.8bn in 2024. The launch of the Disney+ streaming service in late 2019 could hardly have been better timed: having projected between 60mn and 90mn paying subscribers by 2024, Disney+ reached 60.5mn in early August 2020. Not surprisingly given the rise of streaming, global data consumption is another beneficiary of the digital acceleration powered by COVID-19. It will jump by 33.8% in 2020, and will more than double from 1.9 quadrillion megabytes (MB) in 2019 to 4.9 quadrillion MB in 2024.

At the other end of the scale are the segments that have been hit hardest. With many cinemas closed and major movie releases delayed, we project that total global cinema revenues will plunge by almost 66% this year. And it's not likely that lost ground will be recovered; our forecast is that in 2024, cinema revenues for 2024 will be below their 2019 level. A further COVID-related impact is that the ongoing decline in global newspapers and consumer magazines has accelerated sharply in 2020, with overall revenues slumping by more than 14%, with consumer magazines suffering the most. That said, digital offers a silver lining: a tipping point for consumer magazines in 2023 will see their global revenue from digital advertising overtake that from print advertising. Other important sectors will struggle to claw back the growth they lost in 2019. For example, the global advertising sector – which will fall by 13.4% in 2020 to US$559.5bn – is not expected to return to its 2019 level until 2022.