The growth rate of the media and entertainment industry in Romania will reduce to 0.26% this year, from over 8% in 2019, due to the restrictions imposed by the COVID-19 pandemic, with the market value reaching EUR 2,613 billion, according to the 21st edition of the PwC Global Entertainment & Media Outlook 2020 - 2024 (GEMO). Estimates show a return to growth in 2021 and an annual average growth rate of 6.76% by 2024.
Romania is the least affected by the COVID-19 crisis among the Central and Eastern European markets included in the report and the only one that will increase in 2020. It is estimated that the other countries in the region will report decreases in 2020 from to the previous year: Hungary 7%, Poland 5% and the Czech Republic 5%.
“The industry’s revenue figures this year reflect the full force of the economic downturns triggered by COVID-19, but the longer-term outlook as a whole remains bright. Social distancing and mobility restrictions have accelerated and amplified ongoing shifts in consumer behaviour, so the entertainment and media world has become more remote, more virtual and more personal in 2020 than ever. That said, it’s also clear that consumer demand for the varied and expanding array of media choices now on offer continues to grow”, says Florin Deaconescu, Partner and Leader of the Technology, Media and Telecom sector of PwC Romania.
Performance by segments. Winners vs losers
With most people at home, the OTT services market (e.g. Netflix or HBO Go) in Romania will have the highest year-on-year growth on the media and entertainment market, of 32% to EUR 29 million. It will also continue to grow in the coming years, with an annual average growth rate of 16.5%, and is expected to reach EUR 48 million by 2024.
The second highest growth in the market is estimated for the segment of video games and e-sports (electronic sports), of 19% to EUR 136 million this year and rising to EUR 195 million in 2024.
Internet access spending continues to be the largest sector of the industry, with 47% of the market and a value of EUR 1.23 billion, following a 9.7% year-on-year increase. By 2024, it will reach EUR 1.89 billion, with an average annual increase of 11%.
The next largest increase is estimated for internet advertising, of 7.4%, with a segment value of EUR 107 million. It will continue to grow by an average of 9% to EUR 153 million by 2024. With the market very responsive to consumer behaviour changes, mobile internet advertising is growing particularly strongly as smartphones become the main device of media consumption.
The restrictions caused by the pandemic also had a positive effect on book sales, which are estimated to have increased by 5.1% to EUR 69 million in 2020. The PwC report estimates an average annual growth rate of 2.42% by 2024.
Of course, parts of the sector have lost out during the COVID-19 pandemic, including cinemas, the outdoor advertising market, printed newspapers and magazines, the B2B events market, TV advertising revenues, the B2B media segment and radio.
With cinemas closed and ticket revenues lost, the film industry will report the largest decrease, of 58% to EUR 26 million. By 2024, however, the sector is predicted to return to EUR 58 million, which will still be below the 2019 level of EUR 62 million.
The outdoor advertising market has also contracted due to the pandemic, by 25% to EUR 25 million this year, but the prospects for 2024 show a recovery to EUR 43 million.
The B2B media sector, which includes business information, directory advertising, trade magazines, professional books and trade shows, will post a decrease of 13.7% to EUR 194 million, but it will recover in the coming years at an average growth rate of 3.27% per year.
The pre-crisis decline in Romania’s printed newspapers and magazines sector has deepened during the pandemic, by 13% to EUR 62 million this year. It will remain at a similar level until 2024, when the market value is estimated to be EUR 61 million.
Both the television and the video content consumed at home will have slight decreases this year estimated at 6%, with revenues falling to EUR 465 million. This is the second largest segment in Romania in terms of revenue generated, after internet access.
In this context, TV advertising revenues are also expected to decrease by 7%, to EUR 295 million, but then increase from next year, reaching EUR 388 million by 2024.
After growing last year, the radio, music and podcast segment is expected to fall by 9% this year to EUR 27 million, but it will return to growth and reach EUR 38 million in four years.
About Global Entertainment & Media Outlook
PwC’s 20th annual edition of the Global Entertainment & Media Outlook analyses 14 segments of the media and entertainment industry in 53 territories and facilitates comparison of consumer data and advertising spending. The segments covered by this report are: books, B2B media, cinema, internet access, internet advertising, newspapers and magazines, music, radio and podcasts, outdoor advertising, OTT, traditional television and home video consumption, TV advertising, video games, esports and virtual reality.
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Partner and Leader of the Technology, Media and Telecom sector
Marketing and Communication Leader, Romania