JUNE 16, 2014

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Media
Digital to Drive Media and Entertainment Revenue Growth Worldwide

What will the global media landscape look like in 2018? PwC’s annual Global Entertainment and Media (E&M) Outlook 2014-2018 suggests that it is not yet the end of the world as we know it. In 2018, non-digital media will continue to account for the largest share of global spending, TV will still be the biggest advertising medium, and the U.S. will be the world’s biggest E&M market. However, digital revenues, internet advertising and China will all have dramatically narrowed the gap. PwC projects that internet advertising will reach $194B in 2018, just $20B behind TV. Within internet advertising, video will see the sharpest growth. Overall, 65% of the growth in the E&M industry will come from internet advertising and consumer spend on digital.

The report also explores specific industry segments, among them magazine publishing. PwC predicts that in 2015, the global magazine publishing industry will reverse years of decline to record 0.2% year-over-year growth as overall digital gains outweigh falling print revenue. The growth will be fueled by digital advertising, which will grow at an average annual rate of almost 18%, compared to a 4% annual decline in consumer magazine print ad revenue. Consumer magazine circulation revenue will continue to slowly decline at an average rate of 0.7% a year, but there are positive signs that the decline may level out in the long term, as the year-over-year fall in 2018 will be just 0.3%.

So what?

As digital continues to grow and becomes an increasingly meaningful revenue driver, it is important to start moving away from the concept of “digital strategy” and think of digital as an integral part of the holistic business strategy.

> Click here for full report
Demographics
Do Not Forget About Gen X

With all the talk about the future of Millennials and Baby Boomers entering their retirement years, it is easy to forget about the generation squeezed between them: Generation X. The Pew Research Center recently published a report on the often overlooked group. Although smaller in size than Boomers (77 million) and Millennials (83 million), Americans within Generation X (65 million) are in their prime spending years and spend more per capita than any other age group.

Generation X (currently 34-49) truly looks and acts like a group that ties together the two more talked about generations.  They were the leaders on many of the societal shifts perceived to be unique to Millennials, including being non-white and delaying or eschewing marriage. However, Gen Xers have somewhat bought into the notion that they are a middle child -- 49% of Gen Xers say their generation is unique; less than Millennials (61%) and Boomers (58%).

Gen_x

So what?

Advertisers, and in turn publishers, spend much of their time talking about the generations they are targeting. For the past few years, that conversation has been centered around Millennials. But perhaps brands might consider improving efforts to promote to the heavy consumers of today. Generation Xers, a group that overindexes for consumption of many Condé Nast brands, is currently in the midst of their peak spending years.

> Click here for full report
Video
Online Video Viewing Hits New High

Digital video viewing continues to gain momentum. In the first quarter of this year, consumers set records for the number of online videos watched, according to Adobe’s latest U.S. Digital Video Benchmarking Study. Compared to 2013, overall online video viewing was up 43% in early 2014. Setting a new record, almost 36 billion online video starts were counted in the first quarter. Consumers’ usage of mobile devices to watch video programming is driving online video consumption. This year, more than one in four digital videos was viewed on a mobile device, representing a 57% lift in online videos watched on a mobile device between 2013 and 2014. The number of consumers authenticating television subscriptions (e.g. HBO GO, Watch ESPN) to watch on their other devices has also shown phenomenal growth -- increasing by 246% in the past year. Like we have seen for other forms of digital content, apps beat out browsers when it comes to streaming television shows on mobile.

So what?

Adobe's report is not surprising considering everything we have read about the explosive growth of digital video, however it acts as useful tool to help understand the market size. Now that the market has demonstrated impressive growth, will the focus shift from its broad reach to digital video's ability to affect consumer opinion?

> Click here for full report
Retail/Shopping/Commerce
Nielsen: Shopping Centers Get Smaller

A new report from Nielsen examines the current trends around retail shopping centers. Nielsen's analysis found that parts of the category are moving away from large mall settings and into smaller spaces. In 2014, 15% of of all shopping centers were considered Lifestyle Centers, up from 9% six years earlier. Lifestyle Centers (like the one pictured below in San Diego) are usually outdoors, have upscale tenants and include entertainment options. They are smaller than traditional malls, which have seen their shopping center market share decline during the same time period.

Even large retailers are moving to a 'less is more' approach as Wal-Mart is putting resources behind neighborhood markets and Target continues to expand to urban locations with smaller footprints. Nielsen attributes some of the momentum behind this trend to businesses wanting to serve Millennial consumers better. Millennials value the convenience that a Lifestyle Center brings as it allows them to shop, eat, drink and socialize all in one urban setting.

The-headquarters-plaza-580x300

So what?

In the past, malls were able to offer the unique convenience of being able to shop a wide range of stores in one visit. That convenience is not as special anymore as consumers can now visit countless stores in one session on their web browser. Retail settings need to develop new value propositions to draw people away from online shopping and into their stores. Lifestyle Centers do just that, as they not only provide a place to shop, but a place to fulfill desires that cannot be satisfied online.  

> Click here for full report
Quick Takes
Globally, Android Smartphones Are Growing Far More Affordable than iPhones
Chartoftheday_1903_average_selling_price_of_android_and_ios_smartphones_n__2_

Source: IDC, Statista
Google Is Losing Part of Its Mobile Ad Revenue Stronghold

*YP includes Yellowpages.com.

173935

Source: eMarketer
Political Polarization Has Significantly Increased During the Past Two Decades
Party_polarization

Source: Pew Research Center
Portugal's Cristiano Ronaldo is the World Cup's Most Followed Player on Twitter
Chartoftheday_2333_most_followed_world_cup_players_on_twitter_n

Source: Twitter, Socialbakers, Statista
Condé Nast
Feedback, questions, ideas for future issues? Please contact:

Phil Paparella
Condé Nast Research & Insights | Associate Director
1166 6th Avenue, 14th fl. | NY, NY 10036 | office 212.790.6044 | philip_paparella@condenast.com

Contributors:
Tamar Rimmon | Senior Manager, Digital Analytics
Robyn Hightower | Manager, Research & Insights