Media companies are facing turbulent times. Traditional media businesses face enormous cyclical and sectoral pressures. The shift to digital is well past the tipping point. And the global economic downturn is accelerating changes in marketer and consumer spending that will likely reduce the post-recession recovery for many media and entertainment companies around the world.
The global trend of media spending is still increasing, but long-term is proving to reflect a general slowdown. This is generally due to global market maturity in number of connected users, and since digital spending is driven by broadband expansion, growth eventually reaches its realistic state.
There is still, however, immense development in many markets, and that will play a critical role in the growth of spending on global media. That’s true not only because traditional media remain strong in these regions but also because the markets, from Mexico and China to India and Malaysia, anticipate healthy economic expansion and higher household incomes — particularly in the Asia–Pacific and in Central and Eastern Europe. This growth will boost spending on both ads and content across the regions. In fact, the Asia–Pacific media market will be the largest source of absolute growth for the global industry during the next five years.
There’s a general shift to digital. Spending on media continues to move at a rapid pace from traditional to digital products and services. By 2019, digital spending will account for more than 50 percent of the overall total for media spending. Internet and mobile ads will become the largest advertising category by 2017, surpassing TV.
Another mega trend occurring within the consumer behavior is the increased spending on accessed content vs. owned content. Consumers are spending less to buy and own content, while spending more to simply gain access to content without owning it. That trend is gaining momentum. Access-spending will overtake ownership-spending in 2018. Because the cost to access content is generally lower than the cost to buy content, the shift from ownership to access will also have an adverse effect on overall spending.
Disruptive and emerging trends such as shifting consumer behavior, purchasing patterns, new technologies and digitization are also drastically affecting how the way the media industry will look like in the future.
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