2017 ‘cross-over’ year for media
More money will be spent on internet advertising in New Zealand than on television commercials within two years, according to a report by consultancy PWC.
PWC also forecast 2017 would be the year when spending on online directories exceeded the value of adverts placed in the likes of printed directories such as Yellow for the first time.
The firm has been reading the tea leaves of the media and advertising industries for the past 16 years and this year’s report tells a familiar tale.
‘‘New media’’ is on the rise while traditional media such as broadcast television and newspapers battle economic headwinds and changing habits.
PWC digital strategy leader Greg Doone said one of the clearest shifts was towards people watching television and movies ‘‘on demand’’ over the internet at home, because of the convenience and the ability to ‘‘binge’’ view.
‘‘Consumers will increasingly call the shots. What they want is more flexibility, freedom and convenience in when and how they consume their preferred content,’’ he said.
But PWC forecast a slightly less gloomy outlook for spending on non-online content than it had last year. It expected it to edge up by 0.1 per cent a year until 2019 rather than to decline by 0.5 per cent annually through to 2018, as it had previously forecast.
Spending on internet advertising would rise 11.2 per cent a year to hit $737m in 2019, when TV advertising would be worth $584m and newspaper advertising $317m, it said.
There are signs consumers may be having their fill of internet adverts in some markets.
Reuters reported that more than 30 per cent of Germans were now using ad-blocking software to prevent advertisements displaying on the likes of computers and smartphones, versus about 5 per cent of internet users elsewhere.
That was costing German publishers about US$899m (NZ$1.3b) a year in lost revenues, Reuters said.
Compounding
the
issue,
in April the rates advertisers were paying for ‘‘clicks’’ on website ads were falling as more internet users surfed the internet on mobiles.
Advertising rates for mobile ads were about half that for ads that displayed on personal computers, Reuters said.
Business advertising
The good: Spending on business advertising, directories and the likes of trade shows is forecast to rise at 3.5 per cent annually to reach $1 billion in 2019. The bad: Spending on print directories is declining and will be eclipsed by online alternatives in 2017.
Book publishing
The good: Spending on printed books and e-books, including educational and professional books, will grow by 4.6 per cent a year to reach $514m in 2019. The bad: Sales of
printed
con- sumers books will decline 1.7 per cent annually to value $129m.
Films
The good: Online film sales will rise sharply and cinema revenues will rise at a modest rate of 3.9 per cent. The bad: DVD and Blu-ray rentals set to slide 9.3 per cent annually.
Newspapers
The bad: Newspaper circulation revenues will decline at an annual rate of 2.2 per cent. The ugly: Advertising revenues will drop off at an annual rate of 8.3 per cent, falling to $317m in 2019.
Television
The good: Television subscriptions will rise in value by 5.4 per cent a year to reach $902m in 2019. The bad: Television advertising revenues will be overtaken by internet advertising, despite rising by a modest annual rate of 3.3 per cent through to 2019.