Entertainment, Media, Publishing & Broadcasting Industry Market Research

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With astonishing speed, entertainment, media and publishing have digitized, evolving into a highly dynamic industry, interconnected by global digital platforms in a manner that few people could even have conceived of a few decades ago.  We’ve gone from static and flat (books and media printed on paper, music on CDs, movies rented on DVD at the local Blockbuster and TV networks that forced the viewer to be in front of the screen at a given hour in order to watch a given show) to always-on, user-controlled, portable and always-with-you.  Now, the industry has is driven by the needs, habits and desires of individual consumers; delivering content that is easy to time-shift, accessible as customized digital streams; serving up news, entertainment, movies, ebooks and music on demand.  If you don’t know what you want to watch, listen to or read, the best digital platforms push suggestions to you.

Entertainment and media, as a broad sector, are somewhat unique in that revenues are generated by multiple methods.  Primarily, these methods are:  1) outright purchase, such as the download of an ebook or the purchase of a magazine or a movie theater ticket; 2) subscription, such as cable TV fees, Netflix fees or subscriptions to magazines or to music on Pandora; and 3) advertising fees.

Advertising revenues remain of vast importance to this industry, and the internet has created a multitude of new outlets for such advertising.  Global advertising media revenues were estimated to be $481 billion in 2016, according to Magna Global, a unit of advertising agency leader Interpublic Group.  Much of this revenue is made in online media, and the fastest growing markets are in developing nations such as China, Indonesia, India and Brazil.

America continues to be the largest media market.  Analysts at Veronis Suhler Stevenson estimate that total U.S. communications and media spending was $1.455 trillion in 2016.  Broadly measured, the U.S. entertainment and media industry spans multiple sectors, from America’s 10,923 FM radio stations, to the 1.3 billion movie tickets sold yearly in U.S. theaters.  Also, the gambling sector is often included when considering entertainment as a whole.  In America, legal gambling is estimated to be a $95 billion industry. 

Today, digital media of all types must be included when considering the scope of the entertainment and media industry.  As of the end of 2016, according to Plunkett Research estimates, broadband internet connections in U.S. homes and businesses totaled 106 million, plus 264 million wireless subscribers with access to smartphones and tablets.  This means there is a vast market for online entertainment and media, and this segment represents one of the most important advertising revenue markets.  Comcast (the cable TV provider) alone had more than 24 million high speed internet customers as of the end of 2016.  Digital advertising (including the internet and ads on wireless devices) grew to $72.09 billion in the U.S. in 2016, according to eMarketer, a 20.5% increase over the previous year.  The firm forecasts this number will grow to $113.18 billion in 2020, including soaring growth in advertising on mobile devices.  eMarketer estimates that digital advertising totaled $194.6 billion worldwide in 2016.

What some people refer to as “the third screen” (smartphone- and tablet-based) has become a vital factor in entertainment and media.  By the end of 2016, there were 531.7 million smartphone users in China alone.  eMarketer expected global smartphone users to top 2 billion in 2016.

Newspapers have been dramatically hurt by online alternatives.  With an approximately 33.5 million paid daily circulation in the U.S. as of 2016 (down from nearly 60 million in 2000), newspapers are finding it increasingly difficult to compete against online news and advertising rivals.  Many of America’s leading newspapers have gone bankrupt, while others have downsized or become electronic only.  The most successful newspapers have evolved into powerful online and print combinations, offering subscribers and advertisers a choice of digital, print or both.  Both newspapers and magazines are rapidly adopting new formats and new technologies with the goal of making themselves highly relevant and readable for internet users on PCs, and for mobile users on smartphones, tablets, ebook readers and other digital devices.

Recorded music sales are facing powerful competition from Pandora, Spotify and similar internet-based music subscription services.  Traditional radio broadcasting is hurting, finding it increasingly difficult to gather listeners for advertising-based radio programming due to such alternatives as satellite radio.  (SiriusXM had 31 million paid subscribers by the end of 2016).

In the film industry, gross U.S. and Canadian box office receipts for 2016 were $11.2 billion.  Meanwhile, film production companies are suffering from dwindling revenues from DVD sales, as more viewers download them from Amazon.com or Netflix instead of buying films.  Both emerging and mature economies outside the U.S. are of prime importance to film revenues.  For 2015, China’s box office receipts rose to $6.8 billion, up from only $2.8 billion in 2012.

New television sets are internet-enabled, meaning viewers are able to connect directly to entertainment options on the internet.  This brings up an important question:  where will TV viewers of the future get their programming?  Cable and satellite subscriptions are expensive, and do not appeal to many consumers under 35 years of age.  Consumers have been dropping their paid TV subscriptions in large numbers, opting to watch free or low-cost programming on sites such as Hulu.com.  TV content and distribution providers are fighting back by offering niche online subscriptions to movies, sports and other entertainment.  DISH, Hulu and nearly a dozen other leading firms have announced low-cost monthly internet-based TV plans as alternatives to expensive cable or satellite subscriptions.  These online subscriptions tend to be user-friendly, with no additional equipment to install, mobile access, no credit check, and no long-term subscription contracts required. 

Consumers are eagerly buying relatively inexpensive devices that make it simple to connect their internet-ready TVs to online content.  Competitors in this field include Roku, Chromecast, Apple TV and Amazon Fire.  Roku, for example, can be purchased for less than $100, and delivers as many as 1,700 apps to the TV screen, enabling the user to easily click to watch Hulu, PBS, YouTube and myriad other content providers, some of which require a separate subscription.

The burning issue affecting all sectors of the entertainment and media industry is maintaining control of content and audiences while taking advantage of myriad new electronic delivery venues.  Competition in the entertainment sector is fierce.  Gone are the days when television and radio programmers enjoyed captive audiences who happily sat through ad after ad, or planned their schedules around a favorite show.  Consumers now demand near-total control over what they watch, read and listen to.

The competition among entertainment delivery platforms has intensified; all sectors face daunting challenges from alternative delivery methods.  For example, telecommunications companies such as AT&T and Verizon are now delivering television programming to the home via ultra-high-speed internet connections, battling cable and satellite TV firms for market share.

Meanwhile, platforms and delivery methods are evolving quickly.  Smartphones are now used more and more for entertainment purposes, including games, videos and TV-like programming.  Game machines have become multipurpose, with the ability to connect to the internet.  Broadband to the home has matured into a true mass-market medium, while wireless broadband systems such as Wi-Fi are enhancing the mobility of entertainment and media access.  A serious evolution of access and delivery methods will continue at a rapid-fire pace, and media companies will be forced to be more nimble than ever.  5G ultrafast cellular telephone systems will be the next leap forward.

Recommendation software that learns the habits and tastes of consumers have evolved to do a better job of pushing appropriate entertainment content toward audiences.  Amazon.com has long been a leader in the use of such software.  Pandora and Spotify recommend music to users.  Netflix has created an admirable technology of its own.  Likewise, Apple’s iTunes software is strong on recommending content to customers.

Count on continued, lightning-fast changes in the entertainment, media and publishing environment.  As the revolution in new media continues, platforms will evolve quickly, consumers will obtain even greater control and competition will become even hotter.  Meanwhile, the global audience is growing quickly, thanks to emerging middle classes in developing nations as well as the booming spread of smartphones and internet access.