In the Czech Republic, internet advertising will continue to thrive in the coming years, while TV and radio will grow only slowly, according to a PwC study.
Total revenues from Internet advertising will continue to grow at a relatively fast pace in the Czech Republic this year and in the years ahead. Television and radio will generate steady growth in advertising revenue, while print media will continue to lose ground, according to this year's Study of the PwC Global Entertainment & Media Outlook.
"The trends we are seeing in the media industry are no surprise. The clear winner in advertising revenue is the online world, with the gaming and e-sports industries experiencing sharp revenue growth. In contrast, traditional media is stagnant at best, with print media continuing its long-term decline in revenues. And these trends will certainly not break down in the next few years," comments Olga Řehořková, Partner at PwC Czech Republic.
Internet advertising volume in the Czech Republic is expected to reach approximately 67 billion CZK this year, almost doubling in the last five years. In the future, it will grow at an average rate of over 8% per year, and should reach 4 billion crowns by 2028. In terms of money, it is the largest advertising market in Central and Eastern Europe
The sharp rise in popularity of gaming and e-sports is accompanied by a growth in revenues in the Czech market. This year, PwC estimates it at more than nine billion crowns, which is twice as much as five years ago. The market will continue to grow by almost 10 percent annually in the next few years, and by 2028 it should reach CZK 14 billion.
Television and radio will continue to maintain slow revenue growth in the coming years. Television revenues exceeded a billion dollars for the first time last year (over 23 billion crowns) and are expected to grow by 100 million dollars (2.3 billion crowns) this year, but will only grow very slightly by about 2 percent per year in the following years.
Streaming services and pay-TV channels such as Netflix, HBO Max, Disney+, Apple TV or Amazon Prime will grow at the expense of traditional free-to-air programming. "While TV advertising revenues are virtually flat, subscription revenues are growing at a three per cent rate. Thus, in 2028, subscription revenues from streaming TV and pay channels will roughly equal advertising revenues from traditional TV stations," Olga Řehořková said. Radio revenues will maintain a similar three percent pace at roughly one-third the volume of TV.
Cinema revenues should also grow at a decent rate of around 6% per year in the coming years. "We are seeing a renaissance of cinema in the Czech Republic with our cinema clients. This sector is being driven by global blockbusters such as last year's phenomenon 'Barbenheimer', but also by local companies with domestic productions, which the Czech audience has long enjoyed," explains Olga Řehořková, adding that this year's cinema sales in the Czech Republic should reach $113 million (over CZK 2.6 billion). The return of people to cinemas is a global trend, with admission revenue in cinemas increasing by 30% last year. However, they remain behind the record revenues of the pre-release year 2019, which will be reached in two years.
Globally, this year's PwC Global Entertainment and Media Outlook study projects entertainment industry revenue to grow at roughly a four percent rate, reaching $3.4 trillion in 2028, up from $2.8 trillion last year. Advertising revenues alone are expected to exceed $1 trillion in 2026 for the first time in history. The US accounts for a third of all revenues, but developing markets such as India, China, Indonesia and Nigeria are growing rapidly.
Globally, online advertising is also where most of the money is made, and is expected to continue to grow at an annual rate of almost ten percent. The study notes that streaming services have already slowed down their growth rate and will have to adjust their business models and look beyond traditional subscriptions for other revenue streams. "One of the main avenues for increasing profitability will definitely be better use of artificial intelligence to help players in the entertainment industry get to know their customers better and tailor a service to them. This will translate into higher loyalty and a greater willingness to spend for personalised services. Better customer insight through AI can also lead to higher advertising deployment on streaming services, typically in exchange for discounted subscriptions. In general, live broadcasts of major sporting events, which are not yet found on streaming platforms, also offer a large advertising space," suggests PwC's AI expert Patrik Meliš-Cuga on future technological advances.
Source: mediaguru.cz
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