The current Global media market is worth over $1.915 trillion. Today we'll be exploring why that is and how its market will fuel e exponential growth in cryptocurrency economies.
Introduction
The Internet is the world's largest audience, with 50% of humanity's population now tethered to the internet daily through their personal devices.
As the Internet grows, so too do the opportunities for businesses. It should be apparent to any consumer by now, that the most successful businesses of the 21st century are those who have adopted these online communities, and those who have not eventually join the trend.
The world of media is also changing rapidly, shifting from traditional media outlets like Television, and turning to on-demand outlets like Netflix.
Shifting to Digital
The shift from tradition to digital media products and services is happening at a tremendous rate. Digital spending is forecast to account surpass traditional spending by 2020, meaning the digital media market alone will reach over $950 million.
This rapid shift is being fuelled by an ever growing number of connected consumers, an increase in mobile devices, and faster broadband adoption.
As digital media continues expanding and traditional media spending fades out, the structural effect it has on traditional media businesses and its sub-sectors becomes evident. A need arises for these businesses to redefine their business models to include digital media as a part of their value proposition.
Faster broadband growth in developing regions increases digital media expansion and slows spending on traditional services such as cable Television.
Intermediary services such as social networking platforms overshadow traditional media markets, as videos, images, and publishing becomes more frequently shared with users from outside sources. And, with the invent of monetized social networking platforms, the shift of digital spending becomes even more apparent.
Businesses and advertisers are also shifting their marketing strategy towards building online presence, no longer spending what they used to on traditional advertising, and are choosing to adopt digital media advertising strategies instead.
Emerging Markets
Developing markets also play an increasingly important role within the global media market and its shift to digital.
Anticipated economic growth in countries such as China, a country with the world's largest media spend, fuels media spending and is the reason why the Asia-Pacific region is to become the largest source of growth for the global industry over the next five years.
Developing financial technologies, such as Bitcoin, also fuels the shift from traditional spending to digital spending. More digital retailers are choosing to adopt digital currencies as a legitimate type of commerce. As this digital currency market continues to grow, so too does the shift to digital media spending.
Global Industry Overview
Global spending is expected to rise by 5.3% CAGR (Compound Annual Growth Rate) over the next five years. The digital media market alone has a growth rate of 51% over the next five years.
- Digital Advertising
Digital advertising is projected to grow by 15.5% CAGR over the next five years, exceeding its previous growth rate of 11.5%.
This is largely due to businesses advertising themselves more frequently through social media campaigns and other website advertising.
- Music
Digital music spending is projected to grow at an astonishing 51% CAGR over the next five years with the increase of streaming services and subscriptions.
The music industry was the first to feel the effects of the internet as global spending continued to decrease from 2005 - 2012. The music industry spending trend has now reversed again with the increase on online services and is set to return to its once dominate position in the global media market.
- Film & Television
Digital cinema spending is projected to grow by 5.4% CAGR, while television spending is projected to grow by only 2.4% CAGR over the next five years.
The global film & television sector is in a state of flux, as some markets continue to expand their cinema sales, while others are increase their digital content. The increase of video-on-demand services, reduces the need for consumers to use traditional cinema. The increase of streaming services and applications, reduces the need for traditional television units.
- Publishing
Digital publishing spending is projected to grow by 4.54% CAGR of the next five years.
The increase of e-commerce and electronic publishing has reshaped the publishing market, changing the way publishers market their products. Services like Amazon have created a new common for consumers in the publishing market.
- Video Games
Digital video game spending is project to grow by 5% CAGR over the next five years.
Video game spending continues to grow due to the fact it has so many segments. On-demand video game distribution services, such as Steam, make it easier than ever for consumers to purchase and download video games at any time. As digital media becomes more common, so too does video gaming culture.
Summary
The conclusion we find ourselves drawing after analysing the current state of the market, is the clear evidence of change. While some market analysts find this change to be volatile and uncertain, others see it has the formation of new market norms.
Despite the lack of analysis toward digital currencies, such as Bitcoin spending and emerging economies, it's clear that as these economies continue to gain traction, they too will help drive digital media spending growth over the next decade.
The digital media market is set to eclipse the traditional media market, redefining the way that media companies do business. Only the businesses who adapt to this market shift will survive the foreseeable future.
References: McKinsey Media Report 2015, WIPO Global Media Report 2016, Wearesocial Digital Media OVerview 2016, PWC Global E&M Outlook 2016 - 2020, PRNewswire - Digital Publishing Market to Grow.
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