Despite macroeconomic challenges, revenue for the media and entertainment industry in Australia in 2023 was up 2.8% year-on-year, while a “content boom” is expected to come in 2025, according to PwC’s 2024 Entertainment and Media Outlook.
Revenue rose to AU$62.3 billion in 2023, compared to AU$60.6 billion the previous year.
While the revenue growth has remained positive, the rate at which is has grown has slowed down, due to increasing pressures including rising inflation, interest rate hikes and the cost-of-living crisis. 2023 saw a rate of just 2.8%, compared to 2022’s 6.6%.
The latest edition found that advertisers who are harnessing the full value of digital media are the ones reaping the rewards.
“Back in 2013, digital advertising represented only 27 percent of the advertising pie. Over the next five years, it’s set to hit close to 80 percent. This speaks not only to the pace of change, but the success Australian advertisers have seen in shifting their strategies to better suit the tech-enabled world we live in,” said Louise King, partner and technology, media and telecommunications leader at PwC Australia said.
“Several factors have driven this huge growth, but the ‘big gorilla’ remains in search – now bolstered by the rise of search activity on retailers’ e-commerce sites, such as Amazon, Coles, Woolworths and eBay.”
The shift to digital has had clear implications on traditional media, according to the report. In 2013, 60% of all advertising revenues in Australia came from printed newspapers, television and radio, while in 2023, those avenues only attracted 20%.
PwC forecasts that by 2028, they will have shrunk further, representing just 11% of the advertising market.
And while Australian television and radio broadcasters are assisting in diversifying revenue streams through streaming, subscriptions and catch-up services, King said the broadcasters will not make up declines in revenue on their traditional offerings.
“This will include initiatives like FAST channels (free, ad-supported television streamed over the open internet), better cross-platform audience measurement, digital ad insertion into linear ad breaks and new ways to monetise opted-in viewers and listeners directly.”
According to King, 2024 will be a “pivot point” for the media and entertainment industry, with focuses needed on the external environment’s strategic challenges.
“The Australian industry has always thrived on technological disruption, companies looking to succeed in this market will need to be bold in strategic risk taking and move at-pace, capitalising on the digital growth the sector is seeing,” she said.
Meanwhile, PwC has predicted that 2025 will be a “big one” for Australian advertisers, consumers and media companies, with sector revenue tipped to grow by 3.4%.
A resurgence in volume of premium scripted content is expected from high impact global events, including the resolution of the US actors and writers’ strikes, with programs including Netflix’s Stranger Things, BINGE’s The White Lotus and Apple TV+’s Severance returning.
The firm forecasts growth in box office spend and subscription video on demand will accelerate greatly in 2025, and expect it to grow faster than the average of the previous two years.
