Entertainment & Media Outlook 2011-2015 - PwC

Digital age bringsnew opportunitiesCinema operators and DVD rentalstores have survived the economicdownturn reasonably well, with boxoffice revenue and DVD sales andrentals all showing modest increasesthroughout the recession.In the DVD rental market, videoshops still dominate. Mail orderservices have so far failed to makesignificant inroads and the speedand cost of broadband serviceshave hindered the growth of onlinevideo-on-demand (VOD) offerings.DVDs for purchase are being adaptedto suit changing consumer demands.They can now be downloaded anddisplayed across a number of differentscreens including PCs, television,laptops and other mobile devices.In the cinema market, the switch todigital technology is expected to spurgrowth in the immediate future. Digitaltechnology will increase the range offilmed content cinemas can offer, forexample adding concerts in 3D andsporting events such as the RugbyWorld Cup.Cinema operators are upgrading theirvenues to offer 3D movies and luxuryseating for which they will chargepremium prices. Hoyts will open itsfirst premium cinema complex inHamilton in 2011; the venue includesauditorium seating designed for otheruses including conferences and privatefunctions, and a food “emporium”serving gourmet food and beverages.The company has plans to expand theconcept nationwide. 35Both subscription TV companies,Sky TV and TelstraClear, are offeringgreater video-on-demand options viatheir respective set-top boxes, MySkyHDi and T-Box. These will increase asbroadband infrastructure is upgraded.An online video-on-demand market isexpected to develop, and Sky TV’s DVDrental subsidiary, Fatso, has indicated itwill operate in this space, althoughthe new broadband network is unlikelyto have a significant impact before2014-2015. 36The film entertainment market (NZ$ millions)Historical dataForecast dataNZ$ 2006 2007 2008 2009 2010 2011 2012 2013 2014 20152011-2015CAGRBox office 157 161 165 169 179 175 196 215 226 236 5.7%Cinema [advertising] 10 10 8 6 7 7 8 8 8 8 3.7%Physical sell-through 169 200 208 210 213 210 219 232 239 246 3.0%In-store rental 188 188 190 194 204 208 214 219 225 229 2.3%Total 524 558 572 579 603 600 638 675 699 719 3.6%Sources: Advertising Standards Authority, Motion Picture Distributors Association, PwC New Zealand, Wilkofsky Gruen Associates35 ‘Tainui, Hoyts team up for special cinema’, James Ihaka, New Zealand Herald, 2 July 2010.36 ‘Ultrafast broadband the key to Fatso expansion says GM’, Claire Rogers, Dominion Post, 28 March 2011.New Zealand Entertainment and Media 2011-2015 | Outlook 29