Entertainment, media industry revenue to fall 5% in 2020

Live concerts, cinemas and the print industry are the hardest hit by the pandemic.

Singapore’s E&M revenue is expected to decline by 5% in 2020 compared to the previous year, at approximately US$274m, according to PwC’s Global Entertainment & Media Outlook 2020-2024.

The pandemic brought not just the island but even the global E&M industry’s growth to a shuddering halt, noted PwC. Overall, 2020 will see the sharpest fall in global E&M revenue in the 21-year history of PwC’s research, with a decline of 5.6% compared to 2019—or more than US$120b in absolute terms.

"The year 2020 presents a paradox for many Singapore media businesses. There is more consumption of media than ever before, with Singaporeans stuck at home during the circuit breaker. Yet at the same time, there has been a sharp contraction in revenue and profitability for many industry players,” said Oliver Wilkinson, Entertainment and Media Leader, PwC Singapore.

On the upside, E&M companies can look forward to a better new year, with Singapore’s E&M spending expected to jump 5.3% in 2021.

Local E&M spending is also expected to bounce back to US$5.5m or equal that of 2019 levels (US$5.5mn in 2019) by next year.

PwC’s five year forecast also remains optimistic, with overall revenue growth expected to come at a 2.8% compound annual growth rate (CAGR) for 2019-2024.

Overall, The COVID-19 pandemic—and the circuit breaker measures it caused—has pushed for an entertainment and media (E&M) world that is more remote, more virtual more streamlined, and more home-centric at least in the near-term, noted PwC.

Uneven pains
PwC’s study noted that the current pain in E&M is not evenly shared around the industry. E&M involving crowds such as live music, cinema and trade shows are projected to suffer the most.

Spending on local cinemas is expected to fall by 59% in 2020. The sub-sector will suffer from a slow recovery, according to PwC, with cinema spending expected to reach on US$200m in 2024—lower than the US$205m in 2019.

At the same time, the long-running transition in newspapers from print to digital has been fast-forwarded several years, cutting into papers’ print revenues, added PwC. Overall revenues in Singapore is projected to slump by 13% for the year, with consumer magazines suffering the most.

On the other hand, with people staying at home, video and streaming services emerge to be the biggest winners. Over-the-top (OTT) video has seen local revenue surge by 32% in 2020 YTD, higher than the global average of 26%. And it is forecasted to keep rising strongly in the coming years, doubling in size from US$234m in 2019 to US$477m in 2024.

The video games segment has also grown quickly in Singapore, and is projected to expand by 9% this year. It will remain one of the fastest growing segments going forward to 2024, says PwC.

Out-of-home advertising is expected to decline by 24% in 2020 but will recover in 2022.

"What is consistent with the outlook from prior years is the wide variance of performance between different segments, particularly given the acceleration of digital media adoption at the expense of traditional. It is in this sense that the pandemic has brought the future forward,” noted Wilkinson.

“That said, most affected of all have been the live entertainment and cinema segments. Before this crisis, experiences were amongst the better performing parts of the industry, but they have taken a large hit due to the safe distancing and travel restrictions. We still see a good future for such events and live experiences, but it may be some years before they can adapt to this new normal."