SINGAPORE - Globally, 2016 has marked the tipping point at which internet advertising now generates more revenue than TV advertising, according to a study by accounting and consulting giant PwC.
In Singapore, online advertising, while lagging way behind the global average, has picked up and is forecast to grow 11.3 per cent per year to 2021. By contrast, overall print advertising is expected to decline by 2.1 per cent per annum over the next five years.
For now, print advertising remains the largest advertising segment in Singapore, accounting for 44.5 per cent of the total advertising pie, PwC noted in its Global Entertainment and Media Outlook 2017-2021 forecast released on Wednesday (June 7).
In contrast, online advertising now represents only 14.7 per cent of total advertising expenditure in Singapore versus 25.9 per cent in Japan and 53.6 per cent in China, for example.
Nonetheless, the direction is clearly moving towards internet advertising, and the speed of the journey has recently accelerated, said PwC.
The rapid global growth of mobile advertising revenues in particular, is set to increase significantly in the next five years at a compound annual growth rate (CAGR) of 9.8 per cent.
2016 also marked a tipping point in which consumer spending on video games has overtaken that on TV in Singapore. TV spending combines spending on TV subscriptions, over-the-top and video on demand. Last year saw spending on video games in Singapore reach US$368 million and this is forecast to rise to US$489million by 2021.
There are many factors that have contributed to this, said PwC. On the TV side, spending is down as consumers reject traditional large-bundle subscriptions in favour of viewing content online - both paid and pirated - and social media.
However, it is on the side of video games that biggest change has come. The profile of the typical gamer has changed from being a young male, probably playing to beat a computer, to a casual gamer from all demographic segments, said PwC, noting that 60 per cent of Singapore video game spending comes from casual or social games. Spend per transaction is low, but in-app purchases add up to form a considerable market, added the firm.
Consumer spending on live events in Singapore - box office and live music - is also forecast to grow - by over 4 per cent per annum over the next five years, almost double the rate of total entertainment and media consumer spend, said PwC.
"At a time when entertainment and media is becoming more virtual, consumers in Singapore continue to value live experiences," said Oliver Wilkinson, PwC Singapore's entertainment and media leader.
Total worldwide entertainment and media revenues will rise at a compound annual growth rate (CAGR) of 4.2 per cent over the next five years, from US$1.8 trillion last year to US$2.2 trillion in 2021, said the study.
In Singapore, entertainment and media revenues will rise at an overall CAGR of 4.7 per cent over the next five years, from US$5.6 billion in 2016 to US$7.1 billion in 2021.