Substantial Market Opportunity:
The PwC Global Entertainment and Media Outlook 2019 -23 predicts that total global E&M revenue is set to see a 4.3% CAGR in the period, sending an overall figure of US$2.1tn up to US$2.6tn by the end of the forecast period. This pace is close to historical trends, even as shifting consumer behaviours reshape the industry.
It is our belief that the introduction of new marketing and distribution, as well as the increasing popularity of 3D movies, is anticipated to drive the market growth. We believe the change in the lifestyle of people in emerging markets will increase people’s spending on entertainment, while enhanced communication and distribution channels help individuals gain better access to entertainment products. We believe that increasing penetration of TV and Internet in developing countries has also encouraged easier access to the audience.
It is our belief that the introduction of new marketing and distribution, as well as the increasing popularity of 3D movies, is anticipated to drive the market growth. We believe the change in the lifestyle of people in emerging markets will increase people’s spending on entertainment, while enhanced communication and distribution channels help individuals gain better access to entertainment products. We believe that increasing penetration of TV and Internet in developing countries has also encouraged easier access to the audience.
Over the next five years, digital revenue, especially mobile, will continue to make up more and more of the industry’s income, boosted by big gains in Internet advertising and data consumption. Virtual reality (VR), OTT and Internet advertising lead the segments in terms of growth rates. Despite having difficulties meeting high expectations, VR is overcoming challenges. Video games, which are expected to get a lift from new 5G networks, are the principal driver of VR headset adoption. India leads as the market with the greatest growth, but China will reach an important milestone.
In this environment demand for content is increasing at similar rates and this is where our fund has its focus.
Global Streaming Services
There is exponential growth across all film/TV and music services.
Covid is accelerating demand: In the UK during lockdown 12m people joined a streaming service they hadn’t used previously and spent one hour 11 minutes per day watching content, double what it was before lockdown
The value of global streaming services in 2019 was $42bn and is forecast to grow to $184bn by 2027
The five largest global streaming platforms are forecast to have 553m pay subscribers by 2025, a 55% increase from current 357m
Netflix’s budget of $13.6bn in 2020 for films and programming outspends all major rivals and is up $3bn on the prior year; c.$4.4bn of the total will be spent on new, original content
10m subscribers joined Netflix in Q2 2020, bringing the total number of new subscribers to 26m in H1 2020. In contrast, Netflix saw 28 million new subscribers for the whole of 2019
57% of UK users found access to original content being the top reason for subscribing and 71% of millennials found this the most important reason to subscribe
In the UK, the Performing Rights Society processed a record £686m of royalties paid out in 2019 to songwriters, composers and music publishers – up 13.7% on the prior year
Total internet streamed TV and video revenue within the Asia Pacific region totalled $21bn in 2018 but will more than double to be worth $48bn in 2024
China is forecast to account for 57% of that total, with Japan taking 14%, South Korea, Australia and India around 6%
Subscription Video On Demand (SVOD) growth is forecast to come from emerging markets in Latin America, with total subscribers doubling from 2018 to hit 51 million by 2024
That expansion will be led by Brazil and Mexico which together will account for two-thirds of total LatAm SVOD subscriptions, which will collectively be worth c.$8.3bn
In July 2019, Netflix launched a mobile-only plan exclusive in India priced at under $3/m that reflects the focus many streaming providers are putting on mobile video content delivery as smartphone penetration is forecast to hit 63% by 2025
Growing Market Demand for Comics
The average comic book takes c.£75,000 to get to its first edition and it nearly always makes back the investment; what’s essential is to create valuable IP for optioning to TV and film productions
Huge demand for content from the streaming channels and much of this originates from comic book stories, such as the Walking Dead
Marvel and DC Comics have become massive generators of production IP
Asia Pacific has the largest share of the global comic market, accounting for c.41% in 2019 with North America (c.28%) and Europe (c.23%)
The North American comic book sales market grew from $935m in 2014 to $1.21bn in 2019
The global comic book market size is projected to reach c.$4.6bn by 2026, from $3.8bn in 2020, at a CAGR of 3.3%
