No Match Found
The Irish Entertainment & Media (E&M) industry is set to grow at an annual rate of 3.62% Compound Annual Growth Rate (CAGR) to 2027 reaching EUR €6.12bn, up from EUR €5.12bn in 2022. This growth is primarily fueled by increasing internet access and significant growth in mobile advertising and video on demand subscriptions.
Globally, the Entertainment & Media industry is expected to grow at 3.64% CAGR in the period. This boost will see the industry’s global revenues reach €2.54trn in 2027, up from €2.13trn in 2022.
This is according to PwC’s latest Global Entertainment & Media Outlook 2023-2027, the 24th annual analysis and forecast of E&M spending by consumers and advertisers across 53 countries and territories. The Outlook includes Ireland’s E&M industry including sectors such as internet and out of home advertising, internet access, video on demand, TV subscriptions and licences, music, radio, podcasts, video games, filmed entertainment, newspaper, book and magazine publishing.
Against a backdrop of uncertainty and change, the global and Irish entertainment and media (E&M) industry is showing solid growth. Growth in the Irish E&M market is in line with the global forecast despite slower growth in internet advertising (3.7% domestically compared to 6.5% globally).
Speaking at the launch, Amy Ball, Partner, PwC Ireland Entertainment & Media Practice, said: “We have seen robust growth for Ireland in the entertainment and media industry over the past two years following a surge in demand for digital products during COVID-19. Increased reliance on mobile and digital technologies, heightened industry competition, an evolving regulatory environment and disruptions posed by new and emerging technologies will create new tensions and possibilities in the years ahead for the sector. If Irish companies are to retain market share and drive growth, industry leaders will have to be more creative about how they create, distribute and monetise products and services, while remaining cognisant of an evolving global regulatory and geopolitical environment increasingly conscious of data privacy.”
Ireland’s Internet access market will show strong growth across the forecast period with revenues growing at 6.5% CAGR from €1.6bn to €2.2bn between 2022 and 2027. Growth will be fuelled by the Irish mobile market which will hit a tipping point in 2024 when annual revenues will overtake the broadband sector for the first time.
The mobile Internet access market will grow at a strong 8.7% CAGR, from €788mn in 2022 to €1.2bn in 2027. The broadband internet access market will grow at a much slower pace of 4.3% CAGR - albeit still well ahead of the global average of 2.3% - from €836mn in 2022 to €1bn in 2027.
Irish total revenues for internet advertising will grow at a rate of 3.7% CAGR to reach €819mn by 2027. This is below the global average (Global CAGR: 6.5%) due to the maturity of the Irish market. Most of the growth in Ireland will be driven by the mobile sector, where a 5.2% CAGR will push revenue to €455mn over the forecast period.
By 2027, it is expected that mobile internet advertising revenue will account for 56% of the total Irish internet advertising market. The fastest-growing category will be video display while paid search will be the slowest-growing category.
Ireland’s Video on D emand market, which comprises of both Subscription Video on Demand (SVOD) and Transactional Video on Demand (TVOD), achieved record growth rates over the last number of years as households spent more time indoors seeking home entertainment during the COVID-19 lockdowns. The market is set to expand further at a 8.9% CAGR to reach €433mn by 2027. Subscription platforms will dominate over 97% of total video on demand revenue. This is due to the prevalence of SVOD services.
The SVOD sector, which has led the streaming boom over the past decade, will continue to account for the biggest proportion of domestic Video On Demand revenue by the end of the forecast period. The Irish SVOD market will reach €422mn in 2027. However, as the new normal of slower subscriber additions affects the sector, fuelled by a consumer spending slowdown, platform maturity and market penetration saturation, we expect SVOD growth to fall globally from 19% growth in 2022 to less than 4.4% in 2027.
With its Section 481 tax credit incentive, Ireland remains a hub for foreign filmmakers and has been benefitting from the recent global production boom. Local screen agency Screen Ireland reported that filmed entertainment generated €500mn in inward investment in 2021. Total Irish cinema revenue is set to reach €161mn by 2027, significantly up on the 2019 pre-pandemic figure of €124mn.
Ireland’s music and radio market generated €379mn in 2022, an increase of 32% from €286mn in 2021. It is forecast to rise at a 3.6% CAGR to reach €453mn by 2027. The largest segment of the Irish music and radio market is Live Music which accounted for 44% in 2022, a growth rate of 107% since 2021 when revenues from live music were only starting to recover post-pandemic. Though this growth rate is expected to drop significantly, live music revenues in Ireland are expected to continue to grow at a 6.1% CAGR, which is above the global rate of 4.6%.
Total video games revenue in Ireland is expected to reach €526mn by 2027, increasing at a 3.3% CAGR.
Traditional gaming, which comprises revenues associated with playing games on PCs and games consoles, is currently the predominant sector of Ireland’s video games market, accounting for €234mn in revenue in 2022. However, the longer-term picture is one of more-consistent shrinkage, driven by a sharp decline in physical sales of console games, resulting overall in a decrease at a -0.3% CAGR in the forecast period.
After several years of rapid growth, Ireland’s social and casual gaming sector experienced a slower year in 2022, with year-on-year growth of 0.5% bringing revenue of €192mn. Yet the sector is expected to revert to more rapid growth in the coming years, with an increase at a 7.0% CAGR,reaching €267mn by 2027, overtaking traditional gaming as Ireland’s primary source of video games revenue. Social/casual gaming revenues includes consumer spending on and in app-based games on tablets and smartphones, revenue generated from the publishing of advertisements within games apps, and browser games aimed at a casual audience.
The Irish newspaper market was worth €379mn in 2022 and will fall to €288mn in 2027. Digital revenue will rise from €88mn to €113mn over the next five years but will not be able to outweigh the decline in print from €291mn to €175mn over the forecast period. Digital revenue will increase at a CAGR of 5.2% over the five-year forecast period.
Consumer magazine revenue in Ireland is forecast to fall from €40mn to €34mn in 2027. There will be declines across the board, with digital falling from to €16mn, and print contracting to €18mn, between 2022 and 2027. The print sector will be weighed down by the rising costs of paper and production of physical magazines.
PwC’s 2023 Consumer Insights Survey highlights that the Metaverse gained popularity in recent years although Ireland is playing catch-up with global counterparts. For example, 23% of Irish consumers reported to have interacted with the Metaverse (Global: 34%), up from 19% in the previous survey in late 2022. Just 7% of Irish consumers have used a Virtual Reality headset to play games (Global: 11%), but is up from 4% in the previous survey.
The report reveals that developments in generative AI will be particularly disruptive to the Entertainment & Media industry, particularly in the Internet advertising space. Big Tech companies have announced that they will use generative AI to create adverts and produce advertising campaigns similar to those created by marketers using the technology in the near future. These companies must play a role in safeguarding information and ensuring that consumers’ privacy rights are upheld.
Conor Forde, Director, PwC Ireland Entertainment & Media Practice, concluded: “Entertainment & Media Companies must play a role in safeguarding information and ensuring that consumers’ privacy rights are upheld. The EU AI Act is currently under examination by the European Data Protection Board and will soon come into effect. As organisations assess their approach to Generative AI, they will need to identify and adhere to responsible AI principles by addressing critical risks related to transparency, privacy and consent.”
PwC’s Global Entertainment & Media Outlook, now in its 24th year, provides in-depth analysis of global entertainment & media consumer and advertising spending. The Outlook includes five-year historical and five-year forecast data and commentary for 13 industry segments across 53 territories. Segments include business-to-business; cinema; internet access and data consumption; internet advertising; music, radio and podcasts; newspapers, consumer magazines and books; Out-Of-Home advertising; Video on Demand; traditional TV and home video; video games and esports; virtual reality (VR) and augmented reality (AR). The full Outlook can be accessed at www.pwc.com/outlook.
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Corporate Communications, PwC Ireland (Republic of)