Entertainment & Media Outlook 2011-2015 - PwC

IntroductionWe’re excited to release our inaugural NewZealand Entertainment and Media Outlook2011-2015. In this document we explore hownew technologies are accelerating the pace ofthe “digital shift” in New Zealand and the wayentertainment and media companies in NewZealand are responding. To investigate thistheme we interviewed some industry leaders.We are pleased to share with you their views andinsights throughout this section. New Zealand ison the cusp of a digital explosion and with thatcomes new opportunities and challenges.While the New Zealand entertainment and media marketis still in recovery from the global recession, the industryis holding its ground. Revenues in entertainment andmedia grew 3 percent in 2010. This compares with aglobal growth of 5.3 percent. We expect New Zealandtotal entertainment and media market to grow onaverage 5.9 percent compounding annually to 2015,compared to 6.0 percent for global.Although we are not predicting the imminent demise oftraditional media, changes in the content and deliverylandscape are well underway. We see the shift in favourof online and digital media continuing over the nextfive years. Driving this will be the further developmentof enabling technologies such as tablet devices andsmartphones, cheaper, faster internet access and wideconsumer adoption of social media.UFB will transform the New Zealand telecommunicationsindustry, and the shift to digital services will transformNew Zealand’s entertainment and media industry. Ina double-transformation world, partnerships - withlocal and global players - will be a key strategy for allbusinesses in the sector.Kiwis are avid consumers of media. On average, NewZealanders spend eight hours a day consuming variousmedia with the majority of time spent with television,radio and the internet. Advertisers, consumers, enablersand entertainment and media companies all face newopportunities with the uptake of new technologies andthe roll-out of ultra fast broadband. Social media enabledword-of-mouth, is becoming very powerful and it will bekey for companies to participate to engage customers andemployees. The big challenge media companies now face ishow to monetise the online audience. With this increasedpace, it will be important for companies to partner withothers who can help them execute innovative ideas.We could not have written this piece without informationprovided to us by the New Zealand entertainment andmedia industry associations. We are immensely thankfulto Brett Chenoweth of APN, Andrew Stone and JoseAlomajan of Droga5, John Fellet of Sky TV and SteveJackson of TelstraClear who generously gave their timeand shared their insights through in-depth interviews forthis, our inaugural New Zealand section.The most significant developments affecting the sectorare the Government’s Ultra Fast Broadband (UFB)and Rural Broadband Initiative (RBI) programs, theswitch-off of analogue TV in 2013 and potential roll-outof 4G mobile networks. The number of New Zealandhouseholds able to access a broadband connectionis expected to reach over 1.3 million by 2015. Theseinitiatives will further drive the shift to digital, as wesee more devices, both traditional and non-traditional,becoming internet-enabled, more data stored inthe cloud and social media increasingly becomingthe way we share information and collaborate.Keren Blakey,PartnerGrant Dennis,PartnerKathryn Roberts,PartnerNew Zealand Entertainment and Media 2011-2015 | Outlook 5