Last year was the first in which U.S. consumers spent more to access the internet than they did to watch TV and video. And the second shoe will drop in 2017 when advertisers will spend more on the internet than on TV, professional services firm PwC projects today in its 17th annual 5-year Global Entertainment and Media Outlook.
The report sees total domestic spending for entertainment and media rising about 3.6% per year to $720.4 billion in 2020 from nearly $603.0 billion last year.
The internet will drive this growth. Spending to connect to the web will increase about 7.2% a year to $181.7 billion in 2020 from $128.5 billion last year. Ad sales will rise 9.4% a year to $93.5 billion from $59.6 billion.
Spending for cable and satellite TV will be relatively flat with price increases making up for a decline in households: PwC sees total spending increasing to $102.3 billion from $101.1 billion.
The number of households with cable subscriptions will fall by about 500,000 from 53.3 million at the end of 2015. Satellite will drop to 32.5 million from 33.9 million.
But spending on Netflix, Amazon Prime, Hulu and other so-called over-the-top streaming services will increase about 10.1% a year to $10.4 billion.
When you throw in all sources of TV and video spending — including rentals and purchases — the total will increase about 0.4% a year to $122.1 billion.
Meanwhile, TV ad sales will improve about 3.2% a year to $81.7 billion.
As for the movie business, domestic box office sales will decline about 3.8% this year to $9.94 billion, but then consistently grow to set new records in 2018, 2019, and 2010. Over the five-year period, ticket spending will rise about 1.2% a year to nearly $11.0 billion in 2020.
PwC predicts that admissions will grow to 1.22 billion from 1.17 billion last year, while the average outlay for a ticket rises about 0.5% a year to $9.02.
Alternative cinema content including concerts, plays, and sports will generate $1 billion in 2019.
Movie theater ads also will help, growing 1.6% a year to $908 million in 2020.
In other media, the report shows a surprising pick up in music sales. It will rise about 3.5% a year to $18.0 billion in 2020 from $15.2 billion in 2015.
No such luck for newspapers. It’s the only business in the industry that will see sales shrink, by an average of 2.9% a year to $27 billion from $31.3 billion.