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Megan Brownlow Q&A - PwC Media Outlook Report



The PriceWaterhouseCoopers Annual Entertainment and Media Outlook Report is considered a leading authority on the global entertainment and media markets. The Executive Director of the Australian chapter of The E&M Outlook Report - Megan Brownlow - shares in-depth insights through this Q&A.  

Thanks to Megan for her involvement and her ongoing support of MediaScope - particularly through the inclusion of the MediaScape maps of the Australian media landscape which appeared in the Outlook Report this year as a complement to each of their media channel forecasts and overviews.

See details & access the full 2015 Outlook Report

MediaScope State of the Media - PriceWaterhouseCoopers Megan Brownlow

What is your role at PwC? 

At PwC nearly everyone double hats.  I run the research program for the entertainment and media sector that results in the annual Outlook publication and presentations; I also consult to the industry and investors in the industry. Both roles are stimulating and feed into each other.

On the consulting side I run workshops for boards and senior management grappling with specific issues. I bring the weight of our global and local research to these sessions which I guess is our competitive advantage. It’s often a comfort for executives and directors to realise their company’s problems are not unique and potential solutions are being tested everywhere. 

 

Please give us an overview of the PwC Entertainment and Media Outlook Report

The Entertainment & Media Outlook is the umbrella brand for a program that includes a written report and a suite of live presentations that I deliver in small private briefings or larger conference settings. I do about a hundred of those across the country each year. PwC clients get first dibs. 

The core content elements are five year forecasts covering 11 media and entertainment sectors – magazines, newspapers, radio, FTA TV, subscription TV, music (live and recorded), internet (access and advertising), outdoor media, books, filmed entertainment (cinema and home entertainment) and interactive games. We focus mostly on revenue but also forecast non-revenue metrics such as internet penetration (fixed and mobile) and app downloads. We look at the proportion of each sector that their digital revenues represent. 

Beyond the forecasts we choose a couple of special features each year in which to deep dive. We usually cover these both qualitatively and quantitatively. Last year for example we looked at the changing nature of marketing – how marketers were taking their dollars out of paid media channels to spend on making content for their own “media” channels – seven in ten of them reported they were doing this. It was fascinating. 

See details & access the full 2015 Outlook Report


This is the 14th annual report with a theme this year of Innovation - 'having a go' - where you're challenging our industry to innovate. How did you arrive at this theme and why should media innovate? 

A year ago I did a back of the envelope calculation for each media sector about how long it took between their first recorded example – in Australia or globally – and when they were disrupted in a major way. It became apparent that while disruption has always been with us, the rate of disruption is speeding up. Businesses don’t get long to exercise their advantage and therefore the ability to innovate has become a core management skill for survival. This has become particularly acute in the context of digital disruption which has reduced the barriers for entry into the local market for global players. I’m not sure many Australian media businesses know that innovation can be their way out of a bind, it doesn’t seem to be on the agenda – or as a budget item - which makes them very vulnerable. This is why we chose to throw a spotlight on it this year.    

 

What examples of innovation do you highlight? 

We highlighted two or three examples in each sector. My favourites include Tablo, a self-publishing platform in the consumer books sector that draws on the principles of crowd-sourcing. It allows authors to develop a readership base while their book is being written. It was created by a 21 year old Melbourne fellow called Ash Davies who was frustrated by not being able to publish his own book on photography. It’s very clever.  I also love Refcam, developed by a small Sydney company called Globecast, which has been purchased now by Telstra. Refcam is a neat little camera that fits over the head of a football referee and streams smooth, live HD footage of the game from the referee’s point of view. It’s brilliant because it takes you right into the game. Fox Sports won a global sports broadcasting award with it. We found examples of innovation in pockets, but sadly not much innovation in the sector in a cultural or embedded sense. It’s not funded.  

 

What are the top-line findings of the PwC E&M Outlook Report this year? 

Our top line forecasts globally are 4.7% compound annual growth rate (CAGR) for advertising, 2.9% CAGR for consumer spending and 8.8% CAGR for internet access spending. In Australia it’s 5.7% CAGR for advertising 2.8% for consumer spending and 5.7% for access spending.  Our access spending is lower than global because our internet penetration is very high already, there’s not much headroom to grow. We’re typical of a mature country in that regard.  

See details & access the full 2015 Outlook Report

What does the report show specifically for the media sector?

Last year we broke out media agencies to look specifically at their trends and imperatives. We found that, while slow, some were responding to the need to reconfigure internally to match clients’ changing focus towards their own assets, many advertisers see themselves as publishers now. There is a bifurcation occurring – high value, strategic activity at one end and programmatic, data-driven trading at the other. Managed well it’s a great model for agencies. This year we see the bedding down of these internal changes, as well as a focus on content creation and marketing services. Agencies are diversifying in a way that is innovative; the challenges are to price appropriately and not behave irrationally when bidding for work, that is, offer margins that can’t be respected.

In the publishing sector it's easy to say “newspapers are losers and digital are winners” but that is meaningless because each sector is made up of players who can win if they think and act strategically.  Also, every sector has a digital component now.

What are the key issues the media sector has to address? 

The key issues for media in Australia are the globalisation of the media market, the mobile consumer, using social media well and investing in technology to reduce friction in your processes. All the obvious ones, easy to recognise but not easy to address.  

The tagline of our report this year is “Having a Go” which in our view sums up how to address them: take more risks, build in more innovation, get comfortable with failure (but minimise its costs by not getting wedded to projects, have many going at once) and harness (and invest in) technology as fast as you can.  

 

You briefly touch on the issue of skills shortages in the Australian media market - what are your views on this?

In the short term we can continue to use our natural advantages (beaches, sunshine) to attract talent from advanced markets such as the UK to supplement our local talent.

The investment in training is obviously key but t raining doesn’t have to be 100% external. Ensuring you have internal knowledge sharing forums is essential for media businesses now. Make sure your meetings are not just operational but have a learning element is how I suggest managers evolve staff in a cost-effective way. Also, ours is a knowledge-hungry industry – staff feel nurtured when their curiosity and learning needs are fed.   

 

The PwC E&M Outlook Report is a global report with a version for the Australian market. What is unique to the Australian market compared to other regions? 

In traditional media our regulatory environment is different and has created our landscape. The 75% reach rule, which forbids TV networks to reach more than 75% of the population is a dinosaur that still exists for example. This is the clearest area where we are different. Otherwise we are typical of a mature economy – similar to the UK, the US, Canada, Germany and Japan – where we have educated consumers, highly digitised, but reasonably slow growth. 

Based on the report what message can you offer for those of us working in media? 

I’ve said it before but we can’t emphasise “having a go” enough. You can’t be lazy and you can’t be fragile. The market is tough but it’s stimulating for those who can hack it.

It’s a glamour industry still so there are youngsters in schools and universities who want to participate; they’re coming through with embedded behaviours of sharing and creating that are great for our industry. Reverse mentoring could be useful if you can put away your human need to appear to know everything.  

Looking ahead how can media businesses best position themselves for the future?

Same story – invest in innovation, see it as a process – not a set and forget or outsourceable task. Try to embed it into your culture. This is driven from the top. We’ve all heard about Google’s “20% time”…but they’ve followed through with policies such as paying for 50% of any learning you do, even if it’s not work related. That’s an impressive employee value proposition. At Telstra’s muru-D accelerator they’ve made up a new word that I like - “flearn - to learn through failure. There are great examples everywhere.  

See details & access the full 2015 Outlook Report

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PriceWaterHouseCoopers Media & Entertainment Outlook ReportPwC's 14th Annual 2015 Entertainment & Media Outlook is now available! 

 

The Outlook Report contains commentary, five year historical & forecast revenues for 11 key Media segments including television, internet, outdoor, radio, publishing & more. This year's edition throws a spotlight on "Innovation in Australia" & includes perspectives from industry leaders. The MediaScapes also appear in the Outlook Report as a complement to each Media segment. 

 

See details & access the full 2015 Outlook Report

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Other Pages of Interest

  • MediaScapes - well-known guides mapping the entire Australian commercial media landscape - including digital media, television, radio, print, outdoor, media agencies & more.  MediaScapes appear on office walls throughout the industry!
  • Newsletter - stay up to date on media industry news and opinion by joining over 2,200 media trading 'influentials' who receive MediaScope's newsletter each Friday morning
  • What's On - we keep track of the most worthwhile events, training, surveys & awards for the media market.