Global Entertainment and Media Outlook: 2007-2011
PricewaterhouseCoopers publishes a regular outlook report covering the global entertainment and media sector. This industry forecast covers the US, Europe, Middle East, Africa, Asia Pacific, Latin America, and Canada. It provides In-depth global analyses and five-year growth projections for 14 industry segments. The Global Entertainment and Media outlook 2007 to 2011 had some particularly interesting predictions for the broadcast and cable television networks across the world. We recently contacted local industry experts for their views on some of PricewaterhouseCoopers’ predictions.
US PwC Forecast
The US will remain the largest market, expanding from USD62.2bn in 2006 to USD85.4bn in 2011; at a 6.5% CAGR.
Stephen Katz, co-founder of the Center for Entertainment Industry Data and Research, does not believe that there has been significant growth in US TV. He points in particular to a recent report in the Los Angeles Times which says production output remains down following the writers’ strike. According to the LA Times, networks have sharply curtailed the number of TV pilots this year, continuing a trend toward ordering fewer shows for the new season. The shows that did return are filming 20% to 40% fewer episodes.
Cesar Ahumada, Executive Producer and co owner of La Fabrica Films, however, agrees with the sentiment that the US market is expanding: “The size of the industry in this country is amazing, I have no doubt that it will continue to grow due to the immense attention viewers devote to the numerous televised products,” he asserts.
Cesar goes on to draw comparisons between the US and Latin America. He explains: “In Latin-American countries most of the massive audience is devoted to a few soap operas, entertainment shows and sports events. In the US the range of options is wider and TV series have consolidated as an extremely popular format that audiences are following and that networks will probably keep investing in, since it's proven to be a profitable niche.
According to Cesar, the Series phenomena is just starting in Latin countries - the networks have so far been hesitant to invest in that kind of production because they are expensive compared to other formats. “Many are hoping that the audiences become addicted to them as happened in the US,” concludes Cesar.
Europe, The Middle East and Africa PwC Forecast
In EMEA, high-definition television and digital video recorder rollouts will make television more appealing to viewers and advertisers, while a modified regulatory structure will contribute to overall advertising growth.
Patrick Lamassoure is Managing Director, of the French Film Commission. He finds that in France the trend is quite the opposite to that described in the PwC report. “The quick development of new digital terrestrial channels, of web TVs and cell programmes threatens the advertising spend on “traditional” TV channels,” he explains, adding: “For instance, TF1 (our biggest free to air TV channel) advertising revenues have dropped at the first trimester of 2008. Add to this the evolution of people’s concerns about health, which makes the government look to suppress some of the TV ads (like junk food, sodas...), and I’m not sure that you can bet on a development of the advertising TV market.”
One view from Africa in particular is that it is only those countries with a manufacturing base that are likely to attract advertising spend. Mario Zvan, Executive Producer at Blue Sky Films, observes: “Africa is quite big and the situation varies from place to place. South Africa, for example, has a lot of manufacturers and quite a large population with disposable income. If you take somewhere like Ethiopia, on the other hand – which is a large country with a large population but no significant manufacturing base – very little is being done in terms of commercials.”
Asia Pacific PwC Forecast
In Asia Pacific, new distribution platforms will enhance a small multi-channel market while improving terrestrial advertising growth.
In New Zealand, Brent Impey, Chief Executive Officer of MediaWorks, explains that the launch of both the satellite (DTH) and terrestrial (DTT) platforms opens up new channel opportunities. Brent also reports: “Mediaworks will be launching two new channels, one in 2009 and another in 2010. In future, the two free to air broadcasters, TVNZ and Mediaworks, as well as other operators, will be able to launch new digital channels. These channels provide opportunities for companies such as Mediaworks to expand our advertising growth. Initially, such expansion of ad budgets from digital will be small until set top box penetration is significantly further advanced. However, medium to long term, the fragmentation will enable the free to air broadcasters to provide an enhanced service to advertisers."
As to the question of whether new platforms for content consumption e.g online, mobile, IPTV will provide additional ad revenue growth, Jason Paris, Head of Marketing and Emerging Business for TVNZ makes the point that consumers are now more in control of where and when they watch television content then ever before. “All of these new channels and platforms provide companies like TVNZ with fantastic opportunities to extend our channel and programme brands,” he asserts.
Latin America PwC Forecast
Latin America will be the fastest growing market, rising to USD12.1bn in 2011 from USD7.9bn in 2006, an 8.8 percent CAGR.
Carla Raygoza at the Mexican Film Commission comments: “Though I do not have statistical information to agree or disagree with the above statement, I can honestly say domestic television production in Mexico, which relies mostly on “telenovelas” (soap operas), is a million-dollar industry in itself and it grows every year.”
Carla adds: “As for foreign TV production, I’d say around 70% of the projects we get in Mexico are for TV (broadcast and cable) ranging from reality shows to TV commercials to historical documentaries from different networks, ranging from FOX to History Channel to BBC.”
Television is the most immediate media and the most accessible to people from all socio-economic status (almost everyone has a television set at home) but Carla reports it has expanded so much that the competition is fiercer; too many channels and programmes to choose from. “Also, the audience has broadened to people from all nationalities, creeds, different levels of education and income. Therefore, their programmes need to be varied in topics and target audience and maintain quality in production. Mexico in particular and Latin America in general have untapped yet interesting subject matters to audiences living in the US, Europe and Asia.”
As far as the increasing popularity of Latin America as a location is concerned, Carla explains: “TV filmmakers and networks in general are increasingly turning to Mexico and Latin America, as recently proven by the acclaimed HBO produced series “Cappadocia”, which was entirely shot in Mexico by a Mexican director (Carlos Carrera) and an all Mexican crew. This followed the Brazilian series “Mandrake” also produced by HBO.”
Canada PwC Forecast
In Canada, high-definition television will help sustain broadcast viewing and advertising, but losses related to distant signal retransmission will continue to cut into growth.
Michael Schwartz at Avion Films agrees that high definition television will be positive for viewership. He adds: “I feel that once the internet becomes an additional "channel" on everyone's new plasma screens, the increase in viewership will become more meaningful.”
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