According to PricewaterhouseCoopers’ Global Entertainment and Media Outlook: 2010-2014, global entertainment and media spending is expected to rise from $1.3 trillion to $1.7 trillion by 2014, growing at a compound annual growth rate of 5.0%.  The US E&M market is expected to grow at 3.8% CAGR reaching $517 billion in 2014, from $428 billion in 2009. Fast changing consumer behavior is expected to be the catalyst of the entertainment and media industry change over the next five years,

Ken Sharkey, US leader, entertainment, media & communications practice, PricewaterhouseCoopers, notes that “… the digital pace of change has proven to be even quicker than anticipated with consumers embracing new media… and digital downloads at often-unexpected speeds… the continued fragmentation of the E&M sector will fuel greater experimentation by both established industry giants and niche players… ”

Digital services continue to be the primary growth engine, but traditional revenue streams are expected to remain significantly larger throughout the forecast period.  The industry will need to embrace digital not as a competitor to traditional services, but as a complement. Digital spending in the US is expected to account for 26% of all E&M spending in 2014, up from 19% in 2009.     

While there are signs of a rebound, advertising is unlikely to return to former levels. By 2014, the US advertising spend is expected to still be 9% below its level in 2007.  Overall US advertising is expected to increase at a 2.6 % CAGR from $159 billion in 2009 to $180 billion in 2014.  In the US, Internet advertising is expected to surpass newspaper advertising spend in 2010. 

Advertising spending for Internet, television, radio, out-of-home, and video games are expected to be larger in 2014 than in 2009, while consumer magazines, newspapers, directories and trade magazines are expected to be smaller. These projections reflect the market fragmentation and consumer behavioral changes. The advertising industry is responding to consumers’ shifting attention and migrating towards total marketing or total brand communication.  Brands are changing their focus from advertising on a medium, to marketing through, and with, content.  

Consumer feedback and usage provides the only reliable guide to the commercial viability of products and services, and the global consumer base is being used as a test-bed for new offerings and consumption models.  PwC has identified three themes that are expected to emerge from changing consumer behavior and the industry must anticipate and pre-empt the needs and wants of consumers.  

• Rising power of mobility and devices: Advances in technology are expected to see increasingly converged, multi-functional mobile devices come of age as a consumption platform by the end of 2011. By 2014, US mobile Internet access subscribers are projected to increase to 96.1 million, a 40% CAGR from 2009. 
• Growing dominance of Internet experience over all content consumption: Increasingly, the consumer has moved beyond thinking of the Internet as an end in itself, and expects all forms of media to embed the convenience, immediacy and interactivity of the Internet. People are already consuming magazines and newspapers on Internet-enabled tablets, and streaming personalized music services in preference to buying physical CDs.
• Increasing engagement and readiness to pay for content-driven by improved consumption experiences and convenience: Consumers are more willing to pay for content when accompanied by convenience and flexibility in usage, personalization and a differentiated experience that cannot be created elsewhere. Local relevance is also expected to enhance the content providers’ ability to charge.  

Digital migration and consumer behavior changes have put extreme pressure on existing business models.  The proliferation of platforms and rising consumer expectations mean companies can no longer ‘be everything.’

“The industry must radically rethink its approach to monetizing content in capturing new revenue sources, from transactions or from participation with others operating in the evolving digital value chain… ” added Ken Sharkey.   

Segment highlights In the US:

• Internet access and Internet advertising is expected to continue to outperform the other E&M segments, with 8.8 % and 7.7% CAGR, respectively 
• Video games (6.4% CAGR)
• TV subscriptions (6.5% CAGR)
• TV advertising (5.3% CAGR)
• Radio (4.6% CAGR),
• Filmed entertainment (3.6% CAGR)
• Out-of-home advertising (3.2% CAGR)
• Consumer and educational book publishing (2.5% CAGR)
• Business-to-business publishing (0.9% CAGR)
• Recorded music (-2.4 CAGR)
• Newspaper publishing (-2.8 CAGR)
• Consumer magazine publishing (-0.5 CAGR)

• Overall, US consumer/end-user spending is expected to grow by 3.7% CAGR

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Posted under Mobile, New Media, Newspaper, Online, Radio, Revenue, TV & Cable

Wednesday, May 26, 2010

3:56 PM

From MarketingCharts.com 

“Radio’s 7.4% increase outpaced overall gains in advertising expenditures in Q1”

Large Advertisers Boost Q1 Spending

The largest advertisers boosted spending significantly in the first quarter of 2010, according to new data from Kantar Media.

P&G Remains Biggest Spender

The top three advertisers increased spending significantly: Procter & Gamble spending jumped 17.7%, AT&T boosted spending 26.7%, and General Motors increased spending 28.5%, according to Kantar.

Procter & Gamble maintained its position as the largest advertiser, spending $772.6 million; budgets continued to shift toward magazines and away from television.

AT&T rose to the second spot with spending of $576.4 million, behind a large TV ad buy in the Winter Olympics. Rival Verizon (fourth-largest advertiser) reduced its total expenditures by 9.1%, to $517.2 million. Both telecom companies continued to allocate more resources to promote their TV service products as they try to win subscribers from cable and satellite operators. General Motors was the third largest advertiser, spending $533.7 million.

Pfizer, the fifth largest advertiser, posted the highest growth rate with expenditures up 46.2% to $396.4 million as the company maintained aggressive marketing support for Lipitor (prior to the brand going off patent in 2011).

Other Top Advertisers

6. News Corp spent $366.8 million (up 7.8%)

7. Johnson & Johnson spent $344.1 million (down 11.8%)

8. Time Warner spent $304.3 million (up 14.7%)

9. Disney spent $267.6 million (down 11.8%)

10. General Electric spent $264.6 million (up 1.3%)

Top Categories Increase Overall Expenditures

Of the top 10 spending categories in the first quarter, only one – direct response – fell, down by 3.2%. Overall, expenditures for the ten largest advertising categories rose 7.8% in the first quarter and totaled $17.95 billion.

Automotive was the leading category by dollar volume and also had the highest growth rate among the top 10, with spending up 18.6% to $3,016.8 million, ending a streak of 18 consecutive quarterly declines. Manufacturers and dealerships reacted quickly to an improving sales environment by ramping up marketing efforts with TV, magazines and radio being the main beneficiaries.

Telecom was the second largest category as expenditures reached $2,276.5 million, an increase of 10.6%. Financial services also experienced a revival, up 10.1% to $2,028.7 million. Sharply higher spending from marketers of credit cards and loan products offset continued weakness within the consumer banking segment.

Packaged goods categories, where advertisers took advantage of soft ad pricing in 2009 to bolster their media weight, were undaunted by rising ad prices in the first quarter of 2010. Spending from Food & Candy was up 7.3% to $1,600.0 million and expenditures for Personal Care Products increased by 5.5% to $1,311.5 million.

Restaurant category spending also turned around with modest growth of 3.1%, to $1.454.5 million. A major contributor to the gain was McDonald’s television sponsorship of the Winter Olympics.

Kantar reported that overall, ad spending climbed 5.1% in the first quarter.

Posted under Radio, Revenue, TV & Cable

From CNNMoney.com

By David Goldman, staff writerApril 30, 2010: 10:08 AM ET

NEW YORK (CNNMoney.com) — Despite rising cable and satellite TV prices and easy access to streaming TV and movies on the Internet, few consumers have cut the cord. But that looks like it’s about to change.

One in eight consumers will eliminate or scale back their cable, satellite or other pay-TV service this year, according to a new study released this week by Yankee Group.

The study, which was the result of a survey of pay-TV operators and more than 6,000 U.S. consumers, found that many will choose to drop premium channels or cut their service down to a basic package, while others will choose to cut off their service completely.

A cutting-the-cord trend has been the subject of speculation for some time, as networks have increasingly made television programming available for free on the Internet. But a combination of other factors, including a growing number of battles between cable companies and networks, soaring Internet video viewings and an increase in connected TVs and devices, suggest the trend is finally upon us.

Read More…

Posted under TV & Cable

Media Post Publications

by Wayne Friedman, Friday, April 23, 2010

Television’s prime time is video games’ prime time.

Television viewer erosion is the result of a fractionalized viewership — which is due, in large part, to cable viewing and Internet usage. But a lot of video game usage is also contributing, especially in the evening hours between 7 and 11 p.m.

A new study by the Nielsen Games measuring division says Xbox 360 usage, for example, hits nearly 25% between 7 and 11 p.m, with men around 23% and women’s usage at around 17%.

Xbox 360 users are comprised of 45% 18- to-34-year-olds, 31% 12- to-17-year-olds, 13% 2- to-11-year-olds, 7% 35- to-44-year-olds and 3% 45- to-54-year-olds.

Nielsen also looked at Xbox 360 popular live game “1 vs 100″ — which comes in two versions — one with a live host; the other where players could practice among themselves.

The live-host version play averaged 87 minutes, while the practice version was 71 minutes. That’s equal to about one TV drama and one sitcom. Both types of Xbox play offer advertising integration during the “game breaks” after each set of 10 questions.

Carolyn Fuson, senior audience and analysis manager for Xbox Live advertising, said in a Nielsen Wire blog: “In one specific case, an advertiser who placed ads within the games saw notable brand recall and lift. Our ability to learn more about the audience can only be a positive to those brands looking to make an impact on the growing gaming community.”

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Posted under Research, TV & Cable

From MediaPost NEWS

by Wayne Friedman

January 15, 2010

In five years, network programmers will be subjected to the changing effects of nearly one in two homes with DVRs. The new “On Demand” report from Mediabrands’ Magna says that in 2015, 44% of all TV homes will have DVR technology.

Magna estimates this will come to 53 million homes, up from 33 million DVR homes or 29% of all U.S. TV households at the end of the third quarter of 2009.

Overall, Magna is cautious about what this means for the TV and advertising business as a whole.

In a report, Brian Wieser, director of global forecasting for Magna, writes: “We note that the aggregated impact of DVRs will likely continue to be outpaced by a rising population and increases in consumption of conventional TV.”

Also in five years, Video On Demand programming will reach nearly 66 million households — about 54% of TV homes. This would add just under 20 million homes, or 14 percentage points, from its 45.7 million and 40% of TV home 2009 levels.

Broadband access will grow by about the same number of homes during the period, to 89.6 million from 71.6 million homes (61% of the country’s 117 million homes) in 2009.

Looking at some of the major providers of DVR machines and technology, Magna says DirecTV now has 7.4 million DVRs and Dish Network, 7.0 million.

Comcast is at 5 million DVR subscribers, with nearly 21% of the company’s total subscriber base. Time Warner has 4.3 million DVR homes, with 33% of the company’s subscribers.

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Posted under TV & Cable

From MEDIAWEEK
July 29, 2009

Nearly a fifth of Internet users watch video online almost every day. Women are catching up to men in terms of online video usage. And a growing number of recession-conscious Americans claim they are using the Web as a cable TV substitute.

Those are some of the more noteworthy research nuggets found in the latest report issued on Wednesday (July 29) by the Pew Research Center’s Internet & American Life Project, which focused specifically on online video. According to the report, 19 percent of Internet users surveyed claim they visit video sites in a typical day, up from 8 percent just three years ago. Read More…

Posted under Online, TV & Cable

From Media Life Magazine
By Kevin Downey
July 8, 2009

Media buyers are sitting on some $20 billion that will be spent in the television upfront market now underway, with the cable television networks and broadcast networks positioning themselves to grab off the most they can.

Traditionally, broadcast went first and got the bigger share, but that’s been changing in recent years, and this year cable has an even stronger argument for an increase in its take.

It’s in the just-released second-quarter ratings, which saw cable TV’s share of adult 18-49 primetime viewers rise to 51 percent from 49 percent last year, according to an analysis of Nielsen ratings by Turner Research.
Read More…

Posted under Research, TV & Cable

From Media Planner Magazine
July 1, 2009

The total number of ads being skipped via DVRs is currently only about 6%, but that number will rise to between 16% and 18% in two years, according to DVR Research Institute, a consulting firm based in California.

The number of households with DVRs stands at about a third of total TV households; that number will rise to 50% in 2011, the researcher says (via Media Life). The Leichtman Research Group believes, on the other hand, that DVR penetration won’t reach 50% until early 2012.

A refusal by the Supreme Court to hear a case about DVR technology earlier this week potentially paves the way for wider DVR adoption. Read More…

Posted under DVR, Research, TV & Cable

From Radio Business Report/Television Business Report – Voice of the Broadcast Industry
June 26, 2009

They might be on the Internet, or gaming or texting… but they could also be watching live TV, listening to the radio or reading a newspaper. At the annual What Teens Want conference in New York, The Nielsen Company presented How Teens Use Media, which argues once you look past the hype – American teens are not as alien in their media usage as you might expect. Sure, it might sound hip and trendy to suggest they’re too busy texting, Twittering or LOL-ing to be engaged with traditional media, but ultimately, the research proves otherwise. Read More…

Posted under Online, Radio, Research, TV & Cable

From www.marketingcharts.com
June 12, 2009

An average hour of monitored prime time US network TV programming in Q109 contained 10 minutes, 35 seconds (10:35) of in-show brand appearances and 13:54 of network commercial messages, according to branded entertainment data from TNS Media Intelligence.

This combined 24:29 of marketing content amounts to 41% of a prime-time hour.
This total represents an increase over Q408 figures, which showed the average amount of commercial content in a primetime TV hour was 36%, according to TNS. Read More…

Posted under Research, TV & Cable