Australia’s entertainment and media sector must encourage diversity or risk losing out on emerging growth opportunities in Asia Pacific. This was the key takeaway from PwC’s 2016 Australian Entertainment and Media Outlook Report.
The report is touted as PwC’s industry bible for the sector and forecasts revenues in advertising and consumer expenditure for five-year periods – this year covers 2016-2020 – and includes key industry predictions across the entertainment and media sector.
This year’s report delved into diversity and examined how it is a growth driver for Australian businesses.
“We are forecasting low growth ahead, so the time has come for the industry to do things differently. Embedding diversity should be considered a strategic imperative in the search for growth,” said the report’s editor Megan Brownlow.
Australia’s growth in the entertainment and media sector is projected to be at a paltry 4.1 per cent over five years, compared to Asian countries like Indonesia (13.2 per cent), India (10.4 per cent), Vietnam (10 per cent) and China (8.8 per cent).
Growth in total consumer and advertising spending in the sector grew by 6.4 per cent in 2015, a slight dip from 6.8 per cent in 2014. The sector grew by 6.0 per cent globally and 7.4 per cent in Asia Pacific.
Ms Brownlow observes that although Australia clocked 50 deals in the media sector, a third of those deals were Australian businesses being sold to overseas entities.
Over the last few years, the nation has seen US advertising software platform Mediaocean’s purchase of BCC Adsystems, Japan’s Sony’s buy-out of Playmaker, German publisher Bauer’s acquisition of ACP Magazines and more.
Only a handful of businesses, like Seek, Telstra and iSentia pursued regional expansion or buying into emerging growth markets.
To drive geographical growth through diversity, entertainment and media organisations should focus on three things: increase its risk tolerance, cultivate a bilingual workforce, and spend time on the ground in new markets.
Citing some real-life examples to drive the message home, she shared how Brand New Media acted on the opportunity, took the leap of faith and expanded into Singapore, Thailand and the Philippines. Taking that risk paid off—the content marketing agency is doing better in Asia than locally.
“Most Asians actually consider Australia to be part of Asia. I would go so far as to say as an Australian working in Asia, I consider myself to be Asian,” said Brand New Media’s Asia CEO, Damien Bray, who moved to the region several years ago.
“Culturally, we Australians have quite a way to go before we are integrated with the thinking of the region. That ranges from politics through to how we operate business partnerships through to cultural contact with Asia.”
In another success story of geographic diversity, Ms Brownlow recounted how aspiring actor Jenny Zhang couldn’t get any roles because of her Chinese looks despite being Australian.
Using her bilingual skills to her advantage, Ms. Zhang went on to work for MTV selling Nickelodeon and Comedy Central programs into South-East Asia.
During her stint with the media giant, she picked up a wealth of knowledge on what content travels well in those markets.
The knowledge and experience set a sound foundation when she started her business Totem Pictures. The company facilitates co-productions between China and Australia, and looks for Chinese investors for local productions looking to localise their program or format for the Asian market.
It also soon became apparent that being on the ground in your target market talking to your audience was important.
Echoing the same sentiments in the report, she agrees that accessing Asia’s high growth markets is impossible if businesses simply operate in the comfort of their Sydney or Melbourne office.
Multiple studies have shown that diversity improves business outcomes, and even enables businesses to outperform competitors.
Australia, being located geographically in the fastest growing, most dynamic region in the world and home to one of the world’s most culturally diverse populations, presents many opportunities for local businesses to use diversity as their trump card to spread their wings overseas.
“In knowledge and creative industries, diversity is a huge secret weapon and is largely untapped. Although you might take longer to get to a decision, the final decision however would be a better and more considered one,” said Ms Brownlow.