Growth is being primarily fuelled by increasing internet access and strong growth in internet advertising.
The Irish entertainment and media (E&M) industry is set to grow at an annual rate of 4.53% to be worth €6.14bn in 2026.
According to PwC’s latest Global Entertainment and Media Outlook 2022-2026, the industry will be worth $2.93trn globally by then.
“We are seeing the emergence of a global and Irish E&M consumer base for the coming years that is younger, more digital and more into streaming and gaming than the current consumer population. This is shaping the future of the industry”
The growth is being fuelled primarily by increased internet access via fixed broadband and mobile networks and the significant growth in internet advertising.
Ireland’s E&M industry including sectors such as internet and out of home advertising, internet access, TV subs and licences, music, radio, podcasts, video games, filmed entertainment, newspaper, book and magazine publishing.
The Covid-19 pandemic boosted consumers’ interest in digital content and services ranging from exercise to streaming to shopping, and in doing so it pulled digital disruption and industry tipping points forward by several years.
Against a backdrop of uncertainty and change, the global entertainment and media (E&M) industry is still continuing to grow. Growth in the Irish market is in line with the global forecast despite less protracted growth in internet advertising (5.12% CAGR domestically compared to 9.09% globally) and video games and Electronic Sports (esports), with 5.52% CAGR domestically v 8.46% globally. This is offset by other segments such as Over The TOP (OTT) video (9.08% CAGR v 7.60% globally) and Cinema (22.44% CAGR v 18.28% globally).
This week Ireland’s grasp on the burgeoning esports market was given a boost when it emerged that Riot Games has invested €18.5m and created 120 jobs through the location of its new Remote Broadcast Centre in Dublin, capable of reaching a global audience of 145m people.
Entering the metaverse
Around the world and in Ireland, in the not-too-distant future the metaverse could become a stunningly realistic world where individuals access immersive virtual experiences, through a VR headset or other connecting device. Because the metaverse is an evolution that may profoundly change how businesses and consumers interact with products, services and each other, its potential financial and economic value goes far beyond VR. In time, much of the revenues associated with video games, music performances, advertising and even e-commerce could migrate into the metaverse.
“Business models will need to shift to meet the dynamic Irish consumer. Irish businesses must learn to adapt and compete in an ever changing landscape as they continue to adapt their offerings”
Although VR is currently one of the smaller segments tracked, a 36.5% rise in global spending over the past year is a hint of its long-term potential. Globally, VR for gaming and video is expected to increase at a 24.08% CAGR to US$7.59 bn by 2026. The number of standalone headsets sold worldwide is expected to surge from 16mn in 2021 to over 57mn in 2026.
While there is no data available yet on the penetration rates of this medium into the Irish market, there are clear first mover opportunities available to companies in this space. A recent PwC Ireland Consumer Insight Survey revealed the VR opportunities for consumers are immense, albeit Irish consumers lagged global counterparts.
22% of Irish consumers (Global: 32%) had used some form of virtual reality in the last six months. 11% of Irish consumers had used VR headsets (to play games/watch a movie) compared to 16% globally and 5% had purchased products as a result of testing them/browsing stores via VR (Global: 10%).
Globally, the podcast industry has continued to see double-digit growth, with revenues expected to increase to US$3.28 bn by 2026 (11.94% CAGR). There is no data available yet on the penetration rates of this medium into the Irish market.
Speaking at the Irish launch, Amy Ball, Partner, PwC Ireland Entertainment & Media Practice, commented: “It is the choices that billions of consumers make about where they will invest their time, attention and money that are fuelling the industry’s transformation and driving the trends. We are seeing the emergence of a global and Irish E&M consumer base for the coming years that is younger, more digital and more into streaming and gaming than the current consumer population. This is shaping the future of the industry.”
Hitting the reset button
Entertainment & broadcast
It is expected that the decline in Irish cinema-going during the pandemic will be reversed by 2023. Box office revenue in Ireland is forecast to grow at 22.44% CAGR (compound annual growth rate) in the forecast period to EUR €150.07m by 2026.
With the easing of restrictions and return of live music events, it is expected that the live music industry in Ireland will grow to EUR €192.84m by 2026 showing 19.08% CAGR.
Overall, Ireland’s music, radio and podcast market is forecast to increase at a 8.42% CAGR to reach EUR €426.44m in 2026.
Overall, newspaper revenues are expected to fall a further 5.28% per annum to 2026. Print circulation numbers are forecast to decline by 7.41% CAGR with a reduction in associated revenue down from EUR €222.53m in 2021 to EUR €151.45m by 2026. Digital circulation is anticipated to increase by 7.18% CAGR over the same period, but from a lower base resulting in forecasted revenue of EUR €44 mn in five years’ time.
However, digital newspaper advertising in Ireland will increase at a 3.83% CAGR to EUR €63.20m by 2026, while print advertising will fall at a rate of 11.9% CAGR to EUR €57.94m.
The ongoing decline in publishers’ print businesses will result in Ireland reaching a tipping point in 2026, when digital advertising will overtake its print counterpart.
“Despite current economic challenges and fears of a global downturn, the E&M industry is resilient with impressive growth expectations,” Ball said. “For businesses, intense competition and continual disruption will remain the order of the day. Our data shows the mix of revenues and spending is changing rapidly. Every business in E&M stands to be disrupted. The challenge and goal must be to understand your consumer and be on the right side of disruption.”
“By 2026, the Irish E&M market is set to become a EUR €6.14bn industry, that’s more digital and more mobile with VR all around us. Business models will need to shift to meet the dynamic Irish consumer. Irish businesses must learn to adapt and compete in an ever changing landscape as they continue to adapt their offerings. In this high growth sector, EU and Irish regulators are putting pressure on the big tech companies to introduce measures aimed at enhancing consumer protection and market fairness.”
3 key media megatrends for Ireland
Internet Access: Ireland is the third-fastest-growing market in Western Europe
Ireland’s Internet access market will increase at a 6.12% CAGR between 2021 and 2026, making it the third-fastest-growing market in Western Europe behind Spain and Sweden. Total revenue will increase from EUR €1.54 bn in 2021 to EUR €2.08 bn by 2026.
Mobile broadband is growing at a faster pace than fixed and will see an increase at a 9.16% CAGR over the forecast period, reaching EUR €1.13 bn by 2026. Mobile will overtake fixed broadband to become the biggest sector in the Irish market by 2023, when it will account for 50.18% of total Internet access revenue. Over the forecast period, mobile Internet penetration will increase to 54.17% by 2026.
Fixed broadband in Ireland is expected to grow at a rate of 3.10% CAGR over the forecast period, reaching EUR €951.84 m in 2026.
Digital Advertising: Revenues to Reach nearly EUR €1bn by 2026
Total Internet advertising revenue in Ireland will see an increase of 5.12% CAGR over the forecast period to reach EUR €845.66mn by 2026. This is below the average global rate of increase at 9.09% CAGR, however. When compared to other Western European countries, which are deemed more mature with regards to the consumer profile and internet accessibility, Ireland shows positive growth in the coming years, driven mainly by further spend on mobile advertising. The global average is driven by countries with large populations coming online via mobile, creating a huge growth surge.
The Irish advertising market is shifting towards mobile, which overtook wired to become the biggest sector in 2021. Total mobile Internet advertising revenue in Ireland will rise to EUR €491.39 mn by 2026, an increase of 7.85% CAGR over the forecast period.
In the mobile sector, video display will be the fastest-growing segment, in line with global trends – with expected growth for Ireland of 11.42% CAGR in the forecast period. As our devices and operating systems become more technically sophisticated, the ability to reach consumers via Video Display Advertising is enhanced. Video display, which would have typically appeared in the banner of our desktop devices, can now be embedded throughout the content we consume on mobile, which in turn speaks to the expected growth opportunities for this type of advertising. Advertising via display allows advertisers to reach much greater audiences as they browse a variety of websites.
OTT Video: Growth of 9.1% per annum to produce Revenues of EUR €379m in 2026
Ireland’s Over the Top (OTT) video market accounts for any content delivered directly to viewers via a streaming video service. The huge selection of subscription offerings is not just about video on demand but a general shift to digitisation. Ireland’s OTT market experienced its fastest growth rates in 2020 and 2021 due to the impact of the COVID-19 lockdowns, with viewers having to spend more time at home, where they turned to streaming services in search of entertainment. Further expansion in Ireland at a 9.08% CAGR will produce revenue of EUR €378.93m in 2026. The sports OTT market in Ireland has shown particular growth and is highly competitive.