Online advertising is seen registering a 14.6% compounded annual growth rate, reaching USD141 million by 2018, while internet access will grow by an annual 9.9%, from USD841 million in 2014 to USD1.18 billion in 2018.
By 2018, internet access and online advertising will account for more than 40% of the Romanian media and entertainment market, with TV subscriptions trailing a distant second (USD612 million by 2018).
Overall, the Romanian media and entertainment market will register a 5.2 annual growth rate, reaching USD3.1 billion by 2018. Yet, the overall growth of the market masks very uneven evolutions of the different segments, with magazine publishing falling from USD95 million in 2009 to only USD25 million in 2018 (a rate of -12.5%), as well as decreases in expenditure for music purchases and out-of-home advertising (-9.7% and -1.7% respectively).
In Central and Eastern Europe, Russia and Turkey remain the fastest growing markets (9.5% and 8.7% annual growth rates respectively), while the Czech Republic, Poland and Hungary will all register slower growth rates than the Romanian market.
“It is worth noting that the growth scenario for the media and entertainment markets in Central and Eastern Europe has been scaled back compared to last year. This is due to the decrease in the projected growth rate of several emerging economies, including Turkey and Russia,” said Florin Deaconescu, PwC Romania Partner, Leader Assurance Services for the Telecom, Entertainment and Media industry.
While the Romanian entertainment and media market is set to grow at a steady pace in the next five years, it will remain the smallest market in the region in terms of overall value, with USD3.1 billion, compared with Russia (USD42 billion), Turkey (USD17.5 billion), Poland (USD12.6 billion), Czech Republic (USD6.5 billion), and Hungary (USD3.2 billion).
Mobile internet penetration will reach 55% in 2018, which will help drive digital advertising to increase its share from 14% of total advertising revenue in 2009 to 33% by 2018. With internet advertising growing at an annual rate of 10.7% (compared to a total advertising growth rate of 4.4%), the industry is approaching a significant tipping point: in 2018, internet advertising will be poised to level TV advertising. In 2009, TV advertising was double that of Internet advertising, but in 2018, internet advertising will only be trailing TV advertising by a mere USD20 billion. In particular, significant gains in mobile internet advertising are forecast with an annual growth rate of 21.5%.
“Monetizing the digital consumer will not just be about the application of technology. It will be about applying a ‘digital mindset’ to build the right behaviors, advancing from a digital strategy – to a business strategy fit for a digital age. This means getting ever closer to the customer – across the entire organization. We now see that mindset embedded in many entertainment and media companies. But the industry needs adopt more flexible business models. To do this, companies must exhibit three behaviors: targeting correctly the needs and behaviors of the consumers, forging trust with them; creating the confidence to move with speed and agility; and empowering innovation,” said Deaconescu.
PwC’s 15th annual update of the Global Entertainment and Media Outlook 2014-2018 contains analysis and forecasts of 13 major industry segments in 54 countries across four regions: North America (USA and Canada), EMEA (Europe, Middle East and Africa), Asia Pacific and South America.