Digital revenues to hit US$5.8b in 2022 as consumers embrace mobile

The video games market is expected to be worth US$1b in four years time.

Digital revenues are expected to expand at a compound annual growth rate of 5.1% to US$5.8b by 2022, according to a report by accounting firm PwC, as a growing number of entertainment and media owners turn to mobile to generate fresh income streams. 

“Operators can leverage data analytics to develop retention strategies and monetisation targets, offering opportunities to capture new revenue streams in advertising, digital subscription, and microtransactions,” said Cecilia Yau, PwC Hong Kong Entertainment & Media Leader.

Internet advertising is similarly expected to grow 9.9% CAGR to hit US$732m by 2022 buoyed by high mobile consumption and internet penetration rates. Mobile internet advertising is poised to be the main growth engine after it is forecasted to account for over a third (39%) of revenues in four years time.

Also read: Hong Kongers spend more than a fourth of their day online

“Mobile Internet advertising growth drivers include video-on-demand, live streaming, and online shopping, forces driven by high speed networks and higher resolutions with the 5G roll out that will improve the user experience. This encourages advertisers to trial technologies such as live experiences to monetise mobile consumers,” added Yau.

Another digital segment with a positive growth trajectory is the video games market which is expected to be worth US$1b by 2022 after generating US$791m revenues in 2017, ceding only to over the top (OTT) video and internet advertising.

Also read: How can property developers cash in on the eSports boom?

Extensive smartphone penetration, strong broadband speeds and unrestricted access to foreign-produced hardware and games unlike China is boosting the gaming market’s positive growth prospects, the report added.

“Hong Kong’s video game market is growing in size and importance in the E&M market. E-sports offer dynamic opportunities for game developers and businesses to develop monetisation models that personalises game play and improves player performance,” said Wilson Chow, PwC Global, China & Hong Kong Technology, Media & Telecommunications Leader.

As entertainment and media businesses pivot towards digital platforms, Chow maintains that they must leverage the available technology to deliver more personalised and cheaper content to capture and monetise attention.

“Mobile devices are becoming consumers’ primary access to E&M content, and therefore means to reach and monetise mobile consumers by offering direct-to-consumer models such as live experiences. Expanding content and distribution onto digital platforms that grow with consumers’ time and spend will be key.”