Courtesy of HRTS Corporate Partner PricewaterhouseCoopers.
By Deborah Bothun, (deborah.k.bothun@us.pwc.com)
In this rapidly evolving new media world, we talk a great deal about the importance of getting to know our next generation of customers. The so-called ‘Net Generation’ grew up alongside technologies that are revolutionizing the entertainment industry. As businesses race to adapt and capitalize on the explosion of online and mobile innovation, these new technologies and their many possibilities seem hard-wired into the DNA of ‘N-Gen’ers.’
Look to the horizon, and it’s clear that a new wave of consumers is arriving—customers with radically different media behavior and sophisticated expectations of entertainment and media companies. Is your company ready?
As PricewaterhouseCoopers is engaged by entertainment and media companies to recommend and help implement approaches to help meet consumers on this new media landscape, we recognize that evolving business strategies are driven by today’s and tomorrow’s customers. So we enhance our analyses by conducting hundreds of ongoing conversations with consumers around the world.
What have we found? Whether in Paris or Chicago, Beijing or Mumbai, young consumers have remarkably consistent views about entertainment and media. Surprising no one, these young consumers—ages 18-34—lead supe-connected lives. They are intensely involved with multiple types of media, often simultaneously watching television or online video as they chat with friends on Facebook or MySpace. While unique as snowflakes in the myriad permutations of their individual interests, they share a profound fluency with new media and its enabling broadband and mobile technologies.
Encouragingly, these consumers routinely indicate that they are open to new business models. More than previous generations, ‘N-Gen’ers’ appear to more intuitively accept the inherent barter system that supports ‘free’ content—readily agreeing to give their time to a brief advertisement or share personal information with a trusted brand in exchange for ready access to the content they love.
While intense focus on this much-heralded next generation is nothing new to our industry, one often overlooked aspect of this phenomenon is its truly global nature. When I think back to the early years of my career, those who worked in entertainment and media shuttled back and forth between Los Angeles, New York and London. Yet one look through the recent travel of our entertainment and media team yields trips to Moscow, Beijing, Sao Paolo, New Delhi and beyond. Whether working with US entertainment companies expanding into these markets or assisting local ventures, these on-the-ground, immersive experiences offer valuable information about the nuances of each culture and its media usage. This knowledge can inform the specific strategies in each country. It also can invigorate next-generation customer approaches in the US, as well.
As our world becomes more connected, the cross-border flow of products, ideas and business models will likely accelerate. In our Global Entertainment and Media Outlook, PricewaterhouseCoopers projects that the global broadband population will double by 2011, reaching more than half a billion households.1 Similarly, worldwide wireless subscriptions will grow by nearly 50%, further extending new media’s reach around the world.
The ‘Net Generation’ is a similarly global phenomenon. Nearly half of the world’s population today is under the age of 25. And, for every one American youth, there are five ‘N-Gen’ers’ in China and six in India. This collision of burgeoning demographic and technology trends is creating explosive growth. While the US remains the largest entertainment and media market, 24% of all entertainment and media growth from 2006 to 2011 will occur in just four countries—Brazil, Russia, India and China—the so-called BRIC nations.
What do these countries have in common? Rapid economic expansion. The BRIC economies are expanding at twice the rate of the rest of the world—9.3% annually. The resulting expanding ranks of the middle class is having a cascading impact throughout entertainment and media, from accelerating broadband adoption, to driving up advertising revenues, to fueling consumer spending. All tallied, PricewaterhouseCoopers projects that the entertainment and media market in the BRIC nations will double from 2006 to 2011, surpassing the $250-billion mark. Put another way, within four years’ time, $1 out of every $8 spent on entertainment and media will be spent in one of these four nations.
China, as we know, is preparing for its close-up with the 2008 Summer Olympics headed for Beijing—a turn on the world stage that brings with it substantial advertising revenues. The country also is committed to modernization, investing in digital cinema with a goal of adding 2,000 screens by the end of 2008. Most significantly, China surpassed the US in 2007 as the world’s largest broadband market with 65 million households (versus 60 million in the US).
Television distribution remains the largest entertainment and media category worldwide. In India alone, 130 new channels are awaiting licensing. The country’s box office, too, continues its formidable growth. By the end of 2009, PricewaterhouseCoopers expects India to surpass Japan as the largest box office in Asia—doing a brisk $2-billion annual business. And, US titles are ‘traveling well,’ performing strongly alongside the celebrated Bollywood film industry.
Brazil remains the dominant entertainment and media market in Latin America—nearly twice the size of Mexico. With broadband adoption set to increase five-fold by 2011, new media opportunities abound. Combine this with the famously social nature of the country, and you have an intriguing set of opportunities. One example: Google’s social networking site Orkut, little known in the US, garners 15.6 billion page views each month in Brazil. That’s about 10 billion more views than the much-touted Facebook gets in the United States.2
While Russia doesn’t have the booming youth population, like its BRIC peers, the country is experiencing rapid economic growth and middle class expansion. Encouragingly for the country, this wealth is now extending beyond Moscow and St. Petersburg to other major cities. The big story to watch? Box office and home video markets are expanding at a healthy clip, thanks to investments in modern theaters and increased anti-piracy activity by the Russian government. It’s a remarkable turnaround. Led by Russia, Central and Eastern Europe are now the fastest-growing filmed entertainment markets in the world.
As we step into the digital future, one truth remains timeless—the customer is always right. Getting to know the next generation of consumers in all of their diversity and technology savvy is mission-critical work. As our frequent flier miles attest, it’s hardly a small world. But it’s a far more integrated one. And, ‘opportunity’ can translate into many languages for those who invest today in customer relationships that will yield dividends for years to come.
Deborah Bothun is Advisory Leader of the U.S. Entertainment, Media & Communications practice of PricewaterhouseCoopers, Los Angeles (deborah.k.bothun@us.pwc.com).
About the Outlook
PricewaterhouseCoopers’ Global Entertainment and Media Outlook: 2007–2011, the eighth annual edition, contains in-depth analyses and forecasts of 14 major industry segments across five regions of the globe – the United States, EMEA (Europe, Middle East, Africa), Asia Pacific, Latin America, and Canada – plus a Global Overview. To learn more about the Outlook please visit http://www.pwc.com/outlook.
© 2007 PricewaterhouseCoopers LLP (US). "PricewaterhouseCoopers" refers to PricewaterhouseCoopers LLP, a Delaware limited liability partnership or, as the context requires, the network of member firms of PricewaterhouseCoopers International Limited, each of which is a separate and independent legal entity.
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1 Unless otherwise noted, all statistics are taken from PricewaterhouseCoopers’ Global Entertainment and Media Outlook: 2007-2011.
2 “Google’s Secret Society,” Forbes, 8/28/2007
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