Bangkok--22 Jun--PwC Thailand
Entertainment and media (E&M) spending in Thailand is poised to rise 27.8% to US$12.7 billion (427.3 billion baht) by 2019, growing at a compound annual growth rate (CAGR) of 6.3% over the next five years.
Online advertising, TV subscriptions and licence fees, and internet access are the top growth drivers. Music and magazine publishing are the next critical challenge, a PwC forecast says.
Global E&M spending is expected to rise to US$2.23 trillion by 2019 from US$1.74 trillion in 2014, growing at a 5.1% CAGR. The US remains the largest E&M market, reaching $771 billion by 2019 with a 5% CAGR. Japan is the slowest with a CAGR of just 1%, and Nigeria the fastest at 15.1%.
Consumers globally are increasingly seeking customised content on their platform of choice – whether it be digital or traditional media, according to PwC’s annual Global Entertainment and Media Outlook 2015-2019.
They don’t care how content is delivered – digital versus non-digital, the Outlook says. In many ways, the two forms are melding together, resulting in more consumer choice.
As Thais become more selective in how they consume media and entertainment, they’re looking for overall user experiences that can be shared. This means they want attractive, on-demand content that they can show off on social media.
“The industry is likely to be driven by digital platforms that offer diverse content and reach consumers faster than the traditional media,” said Nattaporn Phan-Udom, a partner and leader of PwC’s Technology, InfoComm, and Entertainment & Media (TICE) practice in Thailand.“That said, they’re not completely backing away from traditional forms of content consumption. Today’s consumers want flexibility, freedom and convenience when it comes to content selection and how they consume data.”
Internet access on the rise
Thailand’s internet access is projected to grow 12.8% annually until 2019, compared with 8.8% globally, due to a relatively small market and a low base.
Nattaporn said that strong local demand for mobile internet access and improving 3G/4G network coverage would be key growth drivers even though a 4G auction was postponed to later this year.
Mobile internet access revenue in Thailand is forecast to rise to US$1.64 billion from US$521 million over the 2014-2019 period. The number of subscribers will more than triple to 37.5 million, leading to a 2019 penetration rate of 55%.
Thai subscribers consume an average of 400 megabytes of data per month, which is high by international standards. This will ensure steady revenue growth for the near future, the report showed.
Facebook, and Line drive digital advertising
Thailand’s internet advertising market, one of the smallest in the Asia Pacific region with overall revenue of US$27 million last year, is leading the pack. It will have a CAGR of 18.9% over the 2014-2019 period, the highest growth of all media segments.
The proliferation of mobile usage and the popularity of social media companies including Facebook and Line would fuel long-term growth in the country, Nattaporn said.
Thailand has 28 million Facebook users this year, up from 18 million in 2014. Bangkok is home to more than half of them.
Japan-based Line, the country’s most-loved smartphone messaging app, had 24 million accounts as of last year. It’s among one of the most popular advertising channels, the report showed, adding that Thais spend an average of 3.7 hours a day surfing social media.
The growth of social media via mobile, however, is expected to hamper future growth in revenue from display advertising on websites.
The outlook for TV subscriptions and licence fees remains bright. Revenue is forecast to reach US$1.35 billion in 2019 with a 13.4% CAGR.
“High piracy levels, low disposable income and increased competition remain major challenges for Thai TV operators,” she said.
Magazines and music may face tough times
Total magazine revenue in Thailand, comprising consumer magazine revenue and trade magazine revenue, will be US$349 million by 2019. That’s down slightly from US$383 million last year, a CAGR of -1.8%.
This is partly because consumers are spending more time on digital platforms and less reading print magazines.
The music sector is also on the downside, the findings showed.
Thailand’s music market was worth US$279 million last year, down from US$304 million in 2010. Total music revenue is projected to fall by a CAGR of -0.8% to US$268 million in the next five years.
“Piracy is the No. 1 threat that obstructs the Thai music sector from growing,” Nattaporn said.
Live music, however, is on the rise. More Thais want to see live bands and go to concerts and music festivals.
Thailand is no stranger to international bands and vocalists. Known for its beaches and holiday hot spots, the country is increasingly becoming a drop-in destination for top hit singers and famous artists.
Total live music revenue is projected to grow 6.1% annually to reach US$166 million by 2019 from US$124 million last year, and overtake total recorded music in 2016.
While global revenue from digital media will continue to exhibit stronger growth, non-digital media players must adapt to survive and thrive. This means developing content that consumers like, producing innovative offerings and developing consumer relationships across distribution channels.
“As long as customers are focusing on tailored content with a decent user experience, the companies have no choice but to take it seriously – no matter whether it’s digital or non-digital,” Nattaporn said.