New Zealand’s entertainment and media industry is going digital, states the PwC Global entertainment and media outlook, 2014-2018.
Combining technology and marketing is increasingly important, with the growth of avenues such as smartphone technology and applications, according to the outlook.
Digital advertising has been the biggest earner in Britain for a number of years and Australia for three, but New Zealand is trailing, says Ryf Quail, AdTech, chairman.
In New Zealand digital advertising is behind television advertising, despite the fact that mobile device use is on the rise and more people are watching content daily on a PC, laptop, tablet or mobile.
In the outlook, PwC forecasts digital will grow about 10.2% every year and non-digital content will decline by an average of 0.5% every year.
By 2018, $582 million will be spent on internet advertising, $562 million will be spent on TV advertising and $364 million will be spent on newspaper advertising in New Zealand.
Internet advertising will increase at a CAGR of 8%, making it one of the top industry segments.
Paul Brabin, PwC, partner and digital change specialist, says, "The figures speak for themselves: the digital journey is over and we're now in the age of the digital normal.”
According to the outlook, in order for businesses to profit from the increase in revenue from digital consumers, they must look beyond including digital technology in marketing strategies and adopting a digital mindset.
“New Zealanders no longer think about whether content is digital or not and neither should entertainment and media businesses," says Brabin. "The world has changed, and New Zealand businesses need to move faster with it and figure out how to make more money from consumers and advertisers."
“Businesses must look beyond digital and be more innovative and responsive to the ways people wish to consume content, with a focus on getting to know and engaging people as individuals,” he says.
A more flexible business model comes down to three behaviours, says Marcel Fenez, PwC, Global leader, entertainment and media. Forging trust with consumers, creating the confidence to move with speed and agility, and empowering innovation will be important in monetising the digital consumer, he says.
Currently, the nine markets driving growth in this area are China, Brazil, Russia, India, Mexico, South Africa, Turkey, Argentina and Indonesia. Collectively they are forecast to account for 21.7% of global entertainment and media revenue in 2018, up from 12.4% in 2009.
Ferenz says, “What all these markets have in common is a growing middle class boosting spending in entertainment and media. But the similarities stop there."
"Realising the revenue potential of these markets demands a deep understanding of the local context. Given their intimate local market knowledge, domestic organisations are in prime position to realise the opportunity of the emerging middle class. The optimal approach for international players will most certainly be to collaborate with local partners,” he says.