The digitisation of New Zealand’s entertainment and media businesses is paying off with online advertising revenues showing double-digit year-on-year growth.
Our 2013 Global entertainment and media outlook advertising spend has grown more than 12.4% in 2012 ($39 million), and is forecast to continue growing at an average of nearly 9% a year for the next five years to reach revenues of $543 million in 2017.
New Zealand’s entertainment and media businesses are figuring out how to further engage their audiences online, from high quality content that consumers are willing to pay for to advertisers embracing the marketing value.
In simple terms, the online space is starting to be a profitable channel, and will become the second biggest medium for advertising, after TV, by 2015.
This change has a deep effect on New Zealand media and entertainment industries as they have been regularly reviewing their strategy and market approach.
Mobile advertising
Mobile advertising is taking off in New Zealand and has grown a massive 175% in 2012 as more Kiwis carry smart phones, while our broadcasters are successfully monetising online catch-up TV content by selling advertising.
The explosive use of smart devices such as tablets and smart phones is creating new and multiple ways for entertainment and media brands to interact with their consumers and offer more value to advertisers and consumers.
For example, advertising campaigns can now be richer and interactive while social TV and ‘second-screen’ activity is becoming a popular way to engage with entertainment and media content.
Traditional Media hit
Our analysis also finds the rise of online advertising comes as money continues to move away from traditional newspaper publishing, which will lose its number one spot to TV advertising revenues for the first time in 2013.
The long-term decline in newspaper advertising revenues means newspaper brands must urgently monetise their digital channels. Pleasingly, our newspaper publishers are following global trends seen in mature markets by building digital paywalls. Paying for our online news content will become the new normal.
The report predicts total newspaper publishing revenues will decline at an average annual rate of 5%, yet digital advertising revenues will increase 3.8%, while digital circulation spend will increase 38% until 2017.
Bucking global trends, New Zealand’s printed consumer book industry remains robust with revenues predicted to decrease just 1.4% to $137 million in 2017, with electronic book revenues increasing 22.8% on average each year.
Importing books into New Zealand is still relatively expensive, yet consumers are still buying. This may be due to our slow adoption of e-books. Or maybe, it’s our enduring love affair for the printed page.
Our outlook predicts that the total entertainment and media industry in New Zealand will grow at a respectable average annual rate of 3.5% until 2017, increasing from $5.7 billion in 2012 to about $6.8 billion in 2017.
On the whole, the future looks promising for New Zealand’s entertainment and media businesses, and New Zealand trends are consistent with global trends.
The winners include the internet advertising industry and providers and the TV and video game markets.
Our magazine, film, radio and music industries are holding their ground, while the newspaper industry is showing signs it is better understanding how to monetise its digital content.
Paul Brabin in Partner and Technology Industry Specialist at PricewaterhouseCoopers based in Auckland
