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Futuresource: digital entertainment spend to reach nearly $52bn by 2014

David Davies 18 July 2011
Futuresource: digital entertainment spend to reach nearly $52bn by 2014

Outlay on digital content will account for 46% of total global spend across packaged and digital media by 2014, compared with 24% in 2010, according to new data issued by Futuresource Consulting.

In total, digital and packaged media are expected to achieve revenue of $112bn in 2014.

The definition of digital content employed by Futuresource encompasses video (including paid for online and pay TV VoD), gaming and music.

While packaged media is in decline, it remains a significant contributor to overall sales. As Futuresource senior analyst Mai Hoang (pictured) remarked: “In 2010, packaged video generated $42bn globally, and although decline is apparent in the video industry, packaged will continue to produce significant revenues in the coming years, with spend still at $33bn in 2014, accounting for 72% of total consumer spend.”

The report also indicates that although Blu-ray is ‘gaining traction’, its rise will not be sufficient to compensate for the decline in DVD. Growth in the home entertainment business will need to come from content distribution – although the preponderance of free content (both legal and otherwise) constitute an enduring challenge to paid for online video providers.

“An estimated 400 billion videos were watched online last year in the US, most of which were viewed for free via services like YouTube and Hulu,” said Hoang. “In Western Europe, paid for online video accounted for just 2% of total video spend and 5% in the US, but the market is gaining ground and expected to increase to 12% and 16% respectively by 2014.”

Industry initiatives including bundling, experimentation with release windows, and exclusive downloadable content may help to bridge the digital and physical content worlds.

“For digital, the online user experience needs to be as seamless and enjoyable as possible for the video industry to maximise the future opportunities and make this revenue stream really perform,” concluded Hoang.

Source: Futuresource Consulting

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