Bangkok--15 Jun--PwC Thailand
Thai entertainment and media (E&M) spending is forecast to reach US$14 billion (THB 478 billion), growing at a compound annual growth rate (CAGR) of 6.5% through 2022, according to PwC's Global entertainment and media outlook 2018-2022.
Total global spending on entertainment and media will rise at a CAGR of 4.4% over the next five years, from US$1.9 trillion in 2017 to US$2.4 trillion in 2022. Fast-growing segments include Virtual reality (40.4%) and Over-the-top (OTT) video (10.1%).
Segments growing fastest in Thailand include Internet advertising (18.6%), Video games and e-sports (16.9%) and OTT video (13.9%). However, newspapers (-1.9%) and magazines (-0.7%) will see revenue decline to 2022.
Internet advertising revenue in Thailand is driven by rising mobile consumption and the popularity of social media such as Facebook. Fuelled by mobile internet advertising, the market would be worth US$932 million (THB 31.8 billion), increasing by an 18.6% CAGR by the end of the forecast period in 2022.
"With more advertisers embracing digital platforms, we expect the outlook for the Internet advertising market in Thailand to remain upbeat," said Nattaporn Phan-Udom, a partner and leader of PwC's Technology, InfoComm, and Entertainment & Media (TICE) practice in Thailand.
"Video-on-demand, live streaming and e-commerce will continue to support growth but the key challenges for many operators would be having the right strategies, the right technology and the right content to deliver to their consumers in a timely and cost effective manner."
In Southeast Asia, Indonesia is now the largest market for Internet advertising with revenues of US$1.48 billion. Next are Thailand at US$397 million, Malaysia at US$328 million and the Philippines at US$319 million.
Video games and e-sports boom
By 2022, Thailand's video-game and e-sports revenue will rise to US$2 billion.
Thailand's video game market is one of the Asia Pacific region's fastest-growing segments, with revenue increasing year-on-year by 20% in 2017 to US$910 million. This was propelled by rising ownership of smartphones and more affordable internet data prices and in-app purchases. Similarly, e-sports is taking off in Thailand although the market size remains relatively small.
"The popularity of video games in Thailand will continue to grow significantly whether it be PC games or mobile games. With an explosion of e-sports in Asia in recent years, we expect to see more game developers, advertisers and sponsors both locally and internationally tapping into this market," Nattaporn said.
OTT video revenue in Thailand is set to reach US$128 million in 2022, from US$67 million in 2017, the Outlook data showed.
Although piracy and broadband infrastructure remain major issues for Thailand, OTT providers and advertisers have increasingly entered the market to gain from younger demographics accessing content via internet-connected devices.
Drivers of the new ecosystem
The Outlook also discusses the concept of 'Convergence 3.0', which is changing the nature of competition with the emergence of supercompetitors and niche brands that are focussed more on connecting with consumers and building trust. The report identifies five key drivers behind the latest wave of convergence reshaping the industry.
- Ubiquitous connectivity: The number of high-speed mobile Internet connections will increase by 2.2 billion globally by 2022, vastly expanding the market for mobile content consumption at faster speeds. A symbolic tipping point will occur in 2020, when total global data consumption via smartphones overtakes fixed-broadband data consumption.
- The mobile consumer: The worldwide explosion in mobile access is seeing the connected mobile device become consumers' primary means of accessing content and services across virtually all markets. This makes mobile an increasingly important focus for advertisers. 2018 will be the first year in which global mobile Internet advertising revenue will exceed its wired equivalent.
- Need for new sources of revenue growth: E&M companies are looking to expand beyond traditional revenue sources, which in some cases are declining. At the same time, telecom companies are targeting entertainment and media content to revitalise their growth. As a result, every player in the ecosystem is racing to develop new revenue streams.
- Value shift to platforms: Social media and technology platforms are outpacing traditional content creators in capturing consumers' attention and a rising share of their spending. This trend has fuelled the rise of supercompetitors. However, some traditional content companies are fighting back by developing their own platform-like businesses.
- Personalisation: Today's consumers reject one-size-fits-all content experiences. Thus, E&M players must harness the use of data analytics and AI to personalise their offerings.