The near-term resuscitation of the Australian entertainment and media sectors is dependent upon the emerging “game changers” presented by FTTH infrastructure and the development of smartphone applications, according to a PricewaterhouseCoopers report.
The firm's latest outlook report on the sector, which provides an insight into the changes affecting the media and entertainment industries over the next four years, estimates that the industry will be worth A$30.8 billion ($25.56 billion) by 2013.
PricewaterhouseCoopers lead partner for technology, information, communication and entertainment, David Wiadrowski, warned that there would not be a “bounce back” in advertising revenues. As such, those players that adapt to new models and consumer centric revenue models would be the ones to survive.
The revision of the NBN policy and investment of A$43 billion in infrastructure will “support commerce and productivity growth for the new digital economy for decades ahead,” he said.
Wiadrowski added the web-enabled handset was leading the charge “as a primary distribution platform for the entertainment and media of the future.”
Video and gaming would also provide the biggest growth opportunities as consumption of both services exponentially grows with the NBN platform.
The report reiterates Cisco’s prediction that by 2013, 50% of all online traffic would be video.
Outlook author Megan Brownlow added that NBN would “completely change the competitive media landscape - particularly via video - in a way that nothing has before.”
She added that it would also cause disruption to the traditional broadcasters and ISPs, with one of the biggest game changing effects - Telstra’s role in the NBN - still a question mark.
The effect will depend on where you sit on the value chain, she said. “The free-to-air players are not thrilled. They see it as just another fracturing of their audience but their bargaining chip is the digital switchover. And everyone needs a device and the only way it will work is if there is compelling enough content,” she said.
IPTV will also throw an added layer of competitive complexity for existing players but open the market to a handful of new players. “Existing pay-TV players have a huge head start, Australians have to be weaned off getting TV content for free.”
Brownlow points out that the Australian gaming sector would be the second fastest growing sector, at 7.6% CAGR until 2013. Online will be the top growth area with 10.4% CAGR.
She adds that online retailing will also be bolstered by gaming consumers.
Ultimately “traditionally media that have moved online and have built consumers services online, such as newspaper publishing,” will reap the benefits.
“New user pay models for content as they are worked out and implemented will be winners, bolstered by putting more video on line. Online media providers will compete more like a mini broadcaster and derive higher revenue as CPM rates for video online are much higher than regular CPM,” Brownlow said.