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Cinema, Out-of-home Advertising Going Strong Through 2019

dinheiroThe media economy remains strong with plenty of opportunity for selling. But McKinsey & Company analysts point out that changes are afoot. It’s no secret that growth in digital formats is driving the bottom line for many properties. Between now and 2019, we can expect to see compound annual growth rates of over 5% but that’s slightly lower than the industry experienced between 2009 and 2012. Here’s what to watch for.

The final media spending numbers for 2015 aren’t in yet, but McKinsey & Company believes they’ll come in at about $1.681 trillion or 4.8% higher than they were in 2014. By sector, spending should look like this:

Digital $146.6 [billion]
Broadband $463.8
TV advertising $189.4
In-home video entertainment $331.9
Audio entertainment $97
Cinema $39.4
Out of home $33.2
Consumer magazines $57.6
Newspapers $140.6
Books $73
Educational publishing $41.6
Video games $94.1

These numbers look a little skewed because major sectors like newspapers include both traditional and digital while the digital line item also includes that amount.

While the U.S. economy remains steady, the real growth in the media industry will come from countries with rapidly expanding economies. Analysts point to the Asia-Pacific region as the fastest growing for media spending.

The winning media categories between now and 2019 will be digital (12.7%), broadband (7.8%), TV (5.0%), and in-home video entertainment (3.4%). A couple of traditional formats will prove surprisingly strong with cinema advertising expected to rise 5.4% and out of home on track for a 4.9% increase. Both of these formats capture consumer attention in unique places – as they are out and about in their daily lives and are likely to notice advertiser messages.

Analysts note that broadband and digital, which includes mobile, will be the largest media category by next year on a global basis. The high spending levels on digital reflect the consumer shift to smartphones. At the same time, interest in video game advertising will surge by 8.1% over the next few years which is another testament to the amount of time consumers will spend in front of screens.

For the traditional media categories, there is some good news. The declines will continue for magazine and newspaper publishing but they will occur at much slower levels than what has been taking place.

The bottom line from this report is that the media industry remains healthy, despite disintermediation, with plenty of opportunities for buying and selling.

Via: MediaSalesToday

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