The global audio industry is projected to grow by nine percent between 2020 and 2025, led by an increasingly digital-heavy consumption of streaming audio and podcasts. That’s according to PwC’s annual Global Entertainment & Media Outlook. It offers a big picture view of the world of media consumption across 53 countries including the U.S.
“One of the clearest trends is that players are realizing they may be better served by figuring out how to meet consumers at their convenience,” the report says. “People prefer the ease and convenience of self-directed podcast listening to adhering to radio stations’ schedules. As a result, audio content providers are diversifying their offerings to become more of a destination where consumers will linger and browse.”
It is a trend U.S. radio broadcasters are already embracing as companies including iHeartMedia, Audacy, Cumulus Media, and Salem Media Group and a growing list of others are investing millions of dollars in building podcast businesses. At the same time streamers like Spotify and Clubhouse are using a hybrid of live and recorded podcasts to recreate a personalized streaming listening experience that mimics what radio has sounded like for generations, the PwC report points out.
PwC suggests that the need to tilt in a digital direction comes as younger consumers are showing less interest in traditional media. It says traditional television, newspapers and magazines will also see their business shrink in the coming years. According to PwC, young consumers are turning to “lightly-produced, authentic content” – elements that play to podcasting’s favor. It’s also why a CHR air personality may sound less like they come from a radio background and more like the barista at Starbucks in the future.
After a challenging 2020, when in-person entertainment plummeted and the global entertainment and media industry recorded a 3.8% drop in revenue, PwC says the industry is on track to grow 6.5% in 2021 and 6.7% in 2022, fueled by strong demand for digital content and advertising. And by 2025 it estimates the sector will have $2.6 trillion in revenue worldwide.
Even with its shrinkage, broadcast TV remains the largest segment at $219 billion – although it is projected to see declines of 1.2% in each of the next five years.
Spending on internet advertising rose by nine percent to $336 billion in 2020, overtaking non-internet ad spending for the first time. PwC is projecting for strong annual growth of 7.7% during the next five years.
Music is poised for “robust growth” following a massive 74.4% slump in live music revenues in 2020. PwC expects music revenues to grow at a 12.8% clip during each of the next five years, fueled by digital streaming, which will expand to become a $29.3 billion business by 2025, along with a return to live performances.
CJ Bangah, Technology, Media & Telecom Principal, PwC in the U.S., said the only sure thing is a period of evolution will continue. “We expect the kind of growth and contraction within and across E&M segments we have experienced to continue,” she said. “The power of digital, including the early stages of 5G use cases and the exponential growth of streaming, together with consumers embrace of new and enhanced experiences are a constant force for change.”