A "dramatic" increase in online video revenues, further declines in print, and relatively expensive broadband services are set to be the hallmarks of the Irish entertainment and media market over the next five years, according to a report by PwC.
The Irish entertainment and media industry will grow 3.4 per cent annually to 2022, the accounting giant forecasts in its latest outlook. The expansion will be mostly fuelled by rising revenues for telecoms companies and growth in digital advertising.
“The pace of change will only accelerate,” it states.
In five years’ time, the Irish market will be worth €5.1 billion, which can be broken down into digital and nondigital components of €2.64 billion and €2.45 billion respectively.
PwC expects that digital spending here will outpace nondigital by 2020, with this tipping point now envisaged to arrive a year earlier than the prediction of 2021 made this time last year.
Amy Ball, a partner in PwC Ireland's entertainment and media practice, said many companies still lacked the data and analytics capabilities they would need to deliver content, advertising and other services "to the right users at the right time and in the right context" in the age of artificial intelligence.
“To succeed in the future that’s taking shape, companies must revisit every aspect of what they do and how they do it,” Ms Ball said.
Need for speed
“Given the pace and scale of change under way, speed is vital. For many companies, the models, assets, practices and capabilities that support their businesses today will simply not be enough in the future.”
Internet access continues to be the largest revenue stream within the Irish entertainment and media market, and will expand 6.7 per cent annually to €1.46 billion by 2022. However, “penetration remains relatively low and services tend to be expensive by western European standards”, PwC noted.
Growth in the Irish entertainment and media market will also lag the global swelling of revenues, which is expected to come in at an annual rate of 4.4 per cent.
This is because the Irish forecasts of 8.8 per cent annual growth in over-the-top video (an industry term for broadband-delivered content) and 5 per cent annual growth for video games and e-sports revenues are not as high as they are globally.
Over-the-top video, dominated by subscription services such as Netflix, Amazon Prime and Now TV, is still set to grow faster than any other category in the Irish market, though it remains a relatively small part of the overall market, having reached €69 million in 2017, PwC said. Television advertising, meanwhile, will grow 3.3 per cent annually over the period.
"Traditional media forms" such as music, books and magazines will see their revenues hold up better in Ireland than they will globally, but the forecasted annual decline of 4.4 per cent for Irish print newspaper publishing is sharper than the predicted 2.4 per cent global rate of decrease.