Report expects China's "robust" entertainment and media growth to continue. (Photo: CGTN)
According to a report from global accounting firm PwC, China's entertainment and media (E&M) industries will continue to see robust growth over the next five years.
The report released Wednesday predicts that the combined revenue for E&M will reach 343 billion US dollars by 2022.
The report said the Internet would continue to serve as a major driving force for the E&M industries as widespread mobile networks and evolving digital technology had created enormous development potential.
Analysts said China’s growth pace is substantially higher than the 4.4 percent global average.
"Chinese markets will continue to see enormous gains in Internet videos and other emerging areas," PwC partner Wilson Chow said.
CGTN Digital decided to take a look at the five key areas of growth that are expected to lead to China’s "robust growth" in the entertainment and media sectors.
Global streaming services
Streaming service markets continue to grow rapidly across the globe. The Asia-Pacific region leads growth at 24% due to faster broadband connections and increasing video service offerings mostly focused on local content. China video revenue growth of 16.3 percent will outpace global growth between now and 2022.
The report predicts that streaming service segments in China will experience significant growth through 2022 spurred by mobile penetration and affordable offerings.
China will experience a shift in viewing habits from free-to-air to premium services, adding 2.7 billion US dollars in revenue through 2022.
“The main players are now focusing on original content to control costs, differentiate from competitors and monetize further by selling adaptation rights or licensing rights,” the report said.
China’s Internet advertising market was the second-largest market globally in 2017, after the US, with total revenue of 46 billion US dollars.
While overall Internet advertising growth continues globally, wired growth will taper particularly in mature markets.
“The market will shift to mobile as consumers increasingly prefer mobile platforms,” the report said. “China mobile growth will exceed global projections as mobile Internet penetration increases.”
It is predicted that mobile will dominate Internet advertising in China, representing 72 percent of the industry’s 80 billion US dollar profits by 2022. Mobile Internet advertising growth drivers include video-on-demand, live streaming, and online shopping.
“Social media is very popular. Mobile Internet users in China are highly engaged,” the report said. “The convenience and increasing adoption of mobile payments are also fueling mobile Internet advertising.”
Video games and e-Sports
China’s video games and e-Sports industry is projected to grow at 9.7 percent with 32 billion US dollars in profits by 2022.
“For the sub-segment e-Sports, the US is projected to take the lead over the next five years. However, e-Sports growth is projected to remain strongest in China at 23.7 percent,” the report said. “China will overtake South Korea by 2021 and be the second largest.”
The US, China, Japan and South Korea dominate the video games market and will represent 59% of the market share by 2022. E-Sports total global revenues will be 1.6 billion US dollars in 2022. Large markets without a tradition of gaming (China, India, and Russia) will account for 41 percent of social/casual gaming revenue growth.
China has overtaken the US and now has the largest cinema box office market in the world and analysts are predicting continued growth.
Historically, cinema has been considered one of the most affordable forms of mass entertainment, but admission prices are rising every year.
“Raising ticket prices have sustained high revenues in cinema,” the report said. “Exhibitors are facing criticism for pricing films too high.”
However, ticket prices are still considerably lower in China than in the US. Since 2013 the average cinema ticket price in China has only risen 0.3 percent according to the PwC report.
Music, radio, and podcast
China’s markets for fee-based music and other content are also on a fast track thanks to the strengthened protection of intellectual property.
Digital recorded music segment sales in the country will spike nearly 19 percent by 2022 with profits hitting 811 million US dollars.
“Subscription-based music-streaming services are growing in developed markets as consumers’ desire for content ownership wanes and smartphone penetration increases,” the report said.