John Drinnan

Media writer for the New Zealand Herald

Media and entertainment growth of 5pc expected, says study

Video on demand is putting pressure on traditional subscription TV. Photo / Thinkstock
Video on demand is putting pressure on traditional subscription TV. Photo / Thinkstock

A PWC study on the media and entertainment industry in this country is forecasting a compound annual growth rate of 5 per cent from 2012-2016.

The biggest growth is expected to be in mobile online subscriptions.

Amid a revolution in the way people use media the sector is rife with restructuring and speculation of ownership changes. Findings about the impact of the internet will come as no surprise to industry players.

Technology has been disrupting the business for years and their views were incorporated into the report.

But it lays out the scale of change for media segments, including five below.

Internet

Changes to the internet are having a big effect on all entertainment and media industries. Advertising from online media is expected to rise with value shifting to device, application and content providers. The report forecast aggregated growth of 3.4 per cent for fixed line broadband from 2012-16, 14 per cent for mobile broadband.

Ownership change: Vodafone buying TelstraClear.

Publishing

Challenges from new devices expected to intensify over the survey period to 2016. With decline of print runs and print advertising revenue, companies are enhancing their online presence. The shift to the internet will offset the fall in revenue from physical media. Consumer magazines faced similar challenges.

Ownership change: APN reviewing NZ media assets; Gina Rinehart increased stake in Fairfax Media.

Television

Structural changes ahead but TV advertising expected to remain stable in the medium term, with a challenge to free-to-air from the change from linear broadcasting to multi-media. Video on demand putting pressure on traditional subscription TV.

Personal video recorders, such as MySky, may also drive advertising online.

Ownership change: Vodafone buying Saturn TV; TPG working with Ironbridge Capital to restructure MediaWorks.

Filmed entertainment

Conversions of cinemas to digital projectors is expected to speed up, and box office spending will have moderate growth. Ownership change: Hoyts owner PEP keen to sell cinema chain.

Radio

The entry of subscription music streaming into market is expected to eat into listenership and put increasing pressure on radio revenues.

Ownership change: APN review of its media assets including 50 per cent of TRN; restructuring of MediaWorks.

- NZ Herald

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