Each year, financial services giant PricewaterhouseCoopers ("PwC") publishes a report that looks 5 years into the future - predicting the trends for global consumer spending and advertising directly related to entertainment and media ("E&M") content. On June 14th, 2011 PwC's annual Global Entertainment and Media Outlook report was released - with predictions of continued growth in digital delivery that will reshape entire segments of the E&M businesses.
Filmmakers should take special note of what the PwC report predicts will be a fundamental shift toward multi-platfrom delivery. According to Ken Sharkey, the entertainment, media & communications US practice leader of PwC, "the entire entertainment and media industry is being driven to create experiences that engage consumers by redesigning the content experience to be multi-purpose and multi-platform which, in turn, creates multiple opportunities for monetization."
Sharkey sees the move to transmedia experiences - and the need to come up with ways of monetizing these new experiences - as a key growth area for advertisers and content producers: “Triggered in large part by the device revolution, the consumer migration to digital has continued at an even faster pace and at the same time advertisers are responding by seeking a greater involvement with the consumer’s media and entertainment experience. The biggest challenge for E&M companies is to turn five key attributes that matter to consumers – convenience, experience, quality, participation and privilege – into sustainable, profitable and engaged relationships by offering advantages that outweigh the attractiveness of free or pirated content.”
While digital currently accounts for just over a quarter of total industry revenues, PwC expects digital delivery to account for 58.7 percent of all growth in spending during the next five years, globally. For example, online delivery of movies (e.g., Netflix, Apple, Amazon.com and others) will grow from $4.8 billion this year to $7.6 billion in 2015 (that category generated just $1.2 billion in revenue in 2006).
Most importantly, according to PwC, the dynamics of digitization are not just adding a new channel for delivery of traditional content. Digitization is fundamentally changing the relationship between producers and consumers - opening up major opportunities for what PwC calls the Collaborative Digital Enterprise ("CDE"). According to PwC, content producers need to understand the new dynamics at play in a CDE. Consumers are no longer passive: They are empowered, connected, able to influence large communities of people, and ready to play an increasingly collaborative role in developing new entertainment and media products and services. As explained by Ken Sharkey: “The year 2011 has experienced a surge in collaborative partnering spurring the transformation of the E&M industry over the next five years into a digital collaborative ecosystem. This model is expected to emerge as the template of success and by 2015, most E&M companies and the vast majority of the winners will have digital collaboration infused into their DNA. The real question, then, is how quickly it comes about."
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