The Australian screen industry can expect minimal growth in filmed entertainment over the next five years as the boom in on-demand services is offset by the continued decline of DVD sales and rentals.
National box-office receipts are forecast to grow from $1.12 billion this year to reach $1.262 billion in 2019. Home entertainment revenues are predicted to hold steady in that period at around $1.25 billion.
Those are among the trends published in PwC’s 14th annual Australian Entertainment & Media Outlook 2015-2019 released on Monday.
Overall, the filmed entertainment market fell by 5.6% to $2.4 billion in 2014. The report forecasts that sector will see an annual compound annual growth rate of just 1.9%, reaching $2.6 billion in 2019.
More broadly, PwC projects the Australian entertainment and media market will expand from $35.4 billion in 2014 to $43.4 billion, a CAGR of 4.2%.
Overall, consumer spending on entertainment and media is expected to grow to $27.1 billion by 2019, a CAGR of 3.8%, while advertising spending reaches $16.4 billion, a CAGR of 4.8%.
The report charts a worrying decline in annual ticket sales, which tumbled from 92 million in 2010 to 78.6 million last year. Perhaps over-optimistically, PwC expects ticket sales to reach 83 million in 2019.
“The challenge for the Australian production and distribution industry is to adapt and develop more viable and sustainable models of delivering content,” it says.
Outlook editor Megan Brownlow called on the sector to innovate or face terminal pressures on revenues and margins. “The industry is awake to the need to do things differently, and although it’s important to recognise the impact and role of disruptive technologies, true innovation extends to service, relationships, content, distribution, business models and funding,” she said.
“Look at what the traditional television and radio companies are doing with streaming services, or the agencies with brand-funded content – all of these are digitally supported but they represent much more fundamental shifts in business model.”
Brownlow is excited by the potential of cinema-on-demand platforms such as Tugg and Fanforce. “We’re not seeing rivers of gold but this is a great new way for content makers to reach consumers,” she told IF.
PwC lauds Screen Australia’s support for multi-platform programs including satirical cooking series The Katering Show (which had 3 million views on YouTube), John Luc’s Mychonny channel (890,000 subscribers and 116 million views) and online DIY auto series Mighty Car Mods: Lend Us a Ride Australia (1.2 million subscribers).
VOD revenues including iTunes, Google Play and Big Pond Movies are forecast to jump from $154 million this year to $270 million in 2019, up 16.7%.
VOD through subscription TV services including Foxtel Box Office could rise from $76 million to $90 million, up 12%.