The entertainment and media (E&M) industry in Romania is expected to achieve year-on-year growth of 8.09% in 2021 to a total value of EUR 2.62 billion, taking it above the pre-pandemic level (EUR 2.53 billion in 2019), according to the 22nd edition of the PwC report Global Entertainment & Media Outlook 2021–2025 (GEMO). Estimates also show that the industry will continue to increase until 2025, with an annual average growth rate of 7.68%.
“E&M industry revenues in Romania decreased by 4.23% last year, due to the pandemic-related restrictions, with cinemas being the most affected. Although the uncertainty experienced in the last 18 months is not over, revenue estimates for the coming years are encouraging, especially due to the consistent increase in digital platforms consumption”, says Florin Deaconescu, Partner and Leader of the Technology, Media and Telecom sector at PwC Romania.
At the regional level, Romanian media and entertainment industry registered the smallest decrease last year of all the Central and Eastern European markets included in the report. For example, Hungary decreased by 6.03%, Poland by 5.92% and the Czech Republic by 4.94%.
Winners vs. losers in 2020 and forecasts for 2021
With most people staying at home, the OTT services market (e.g. Netflix or HBO Go) in Romania recorded the highest growth in the media and entertainment market last year, of 27.16%, to EUR 29 million. It is expected to continue to grow this year at an estimated rate of 22.43% year-on-year EUR 36 million.
The second largest increase in the market in 2020 was recorded by video games and e-sports, of 17,08% to EUR 154 million. For this year, PwC specialists estimate 18.94% growth to EUR 184 million.
The next largest increase last year was recorded by internet advertising, of 8.33% to EUR 106 million. This segment will continue to grow in 2021, by 11.78% to EUR 118 million. Romania has the smallest internet advertising market in Central and Eastern Europe, but it has the fastest growth rate.
The restrictions caused by the pandemic had a positive effect on book sales, which increased by 3.63% in 2020 to a value of EUR 67 million. Stagnation is expected this year.
Television and video content consumed at home stagnated last year at a value of EUR 515 million, with similar performance being expected in 2021. This is the second largest segment in Romania in terms of revenue generated, after internet access.
Revenues from TV advertising increased last year by over 2% to EUR 312 million and are estimated to reach EUR 339 million in 2021.
The COVID-19 pandemic also designated its losers: cinema, spending on internet access, out-of-home advertising, newspapers and consumer magazines, B2B (Business to business) and music, radio and podcasts.
Internet access spending continues to be the largest sector of the industry, with 41% of the market. In 2020, it recorded a year-on-year decrease of 3.95% to EUR 1 billion, but the report indicates a revival in 2021, with an increase of 8.44%.
With cinemas closed, the film industry recorded an 80% drop last year to EUR 12 million. However, the sector is expected to recover this year with revenues of EUR 24 million, but that is well below the EUR 60 million recorded in 2019.
Another segment that lost ground due to the pandemic is the out-of-home advertising market (-21.5%), which reached a value of EUR 27 million in 2020. The prospects for this year show a return of up to EUR 32 million.
The B2B (Business to business) media sector, which includes business information, directory advertising, trade magazines, professional books and trade shows, recorded a decrease of 20.53%, to EUR 133 million, but it will also see a revival in 2021, with a growth rate of 7.17%.
Already affected by decline in recent years, the newspaper and consumer magazines sector in Romania was even worse hit in 2020, with a 20.79% contraction to EUR 55 million. An 11% increase is expected this year.
After growing in 2019, the radio, music and podcast segment fell by 21.41% last year to EUR 23 million. A return to growth is expected in 2021 as the sector reaches EUR 27 million.
Globally, the revenues of the media and entertainment industry will increase by 6.5% in 2021, after a decrease of 3.8% in 2020.
About Global Entertainment & Media Outlook
PwC’s 22nd 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.