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Source: cision | Published on: Tuesday, 16 July 2024
LONDON, July 16, 2024 -- Despite economic headwinds, technological disruption and increased geographic and industry competition, the global entertainment & media (E&M) industry has continued to grow in 2023, with total revenues rising 5% in 2023 to US$2.8 trillion – outpacing overall economic growth cited by the IMF[1] – according to PwC's Global Entertainment & Media Outlook 2024-28, published today.
The outlook, which covers 11 revenue segments across 53 countries and territories, finds that global E&M revenues are projected to hit $3.4 trillion in 2028, growing at a 3.9% compound annual growth rate (CAGR).
Most notably, advertising revenue is set to hit $1 trillion in 2026 and is projected to account for more than half (55%) of total E&M industry revenue growth over the next five years.[2]
The outlook also finds that streaming services, traditionally dependent on subscription models, face increased competition and challenges in consumer use and uptake, and are looking to consolidation, live sports (including mega-events like the Summer Olympics), a crack-down on password sharing, and ad-based models to drive growth.
Looking across the globe, the US remains the world's largest consumer spending and advertising market (4.3% CAGR to 2028), representing more than one-third of global spending in 2023.[3] However, other large markets including China (7.1%) and India (8.3%), and less mature markets such as Indonesia (8.5%) and Nigeria (10.1%), are growing more quickly.
Werner Ballhaus, Global Entertainment & Media Leader, PwC Germany, said:
"As the global entertainment & media industry continues to grow, market players face both risks and opportunities. Shifts in consumer preferences, and uncertainty around the continued impact of digital transformation and new and emerging technology such as Generative AI, are inspiring a wave of business model reinvention. If market players are to gain their share of the growing revenue pools we identify, they will have to reimagine how their company creates, delivers, and captures value, leveraging the growth of advertising while also harnessing the powerful opportunity presented by AI. As consumers increasingly consume content online, companies will also need to diversify their product-offerings and continue to connect with consumers on the platforms where they spend more of their time."
Global advertising revenue to hit $1 trillion in 2026
Global advertising revenue is expected to grow at a 6.7% compound annual growth rate (CAGR) through 2028, ahead of the other two broad E&M segments analysed: connectivity (2.9%) and consumer (2.2%). All the while, total advertising revenue is to hit $1 trillion in 2026 (while 2028 revenues will hit double the revenues of 2020). Advertising is projected to account for 55% of the total E&M industry's growth over the coming five years based on the three broad E&M segments analysed.
Internet advertising is the largest and one of the fastest-growing components of the advertising industry. It grew 10.1% in 2023, adding $52.5 billion in new revenues, and is projected to rise at a 9.5% CAGR through 2028, when it will account for 77.1% of total ad spending.
Streaming services look to new models to drive growth
Streaming service usage and consumer uptake is rising, albeit at a lower rate than in recent years, as service-providers face increased competition and challenges in getting consumers to pay more for digital goods and services. Global subscriptions to over-the-top (OTT) video services will rise to 2.1 billion in 2028 from 1.6 billion in 2023 – representing a 5% CAGR. Global average revenue per OTT video subscription is barely expected to grow, rising from $65.21 in 2023 to $67.66 in 2028.
This plateauing effect is pushing leading streamers to reshape their business models and find new revenues beyond subscriptions, including the introduction of ad-based variants (reduced subscription fees with ad-filled content), cracking down on password-sharing, introduction of live sports, and industry consolidation. In developed markets, this consolidation is taking the form of bundling subscription service providers. By 2028, advertising will account for about 28% of OTT global streaming revenues, up from 20% in 2023.
Gaming industry stands out as live-events and global cinema rebound
Global gaming, which includes e-sports (competitive gaming with professional tournaments and live spectators), continued its streak as one of the fastest-growing large sectors in the E&M universe, with total revenue hitting $227.6 billion in 2023, up 4.6%.[4] Revenue is on track to top $300 billion in 2027, almost double its level in 2019. Asia-Pacific remains the largest regional market for gaming, representing 48.1% of the segment's global total, rising to 54.4% – or $181.8 billion – in 2028.
Elsewhere within E&M, in-person, real-life, tech-enabled experiences such as live music and cinema remain key growth industries, with movie box office and music ticket sales representing 38.6% of 2023's net increase in consumer spending worldwide. Driven by large events such as musician world tours, live music revenues rose 26% and accounted for more than half of the overall music market.
Aided by a number of blockbuster releases in 2023, cinema saw a 30.4% year-on-year increase in spending at the box office. Global cinema revenues are poised to surpass their pre-pandemic, 2019 levels in 2026.
Wilson Chow, Global Technology, Media and Telecommunications (TMT) Industry Leader, PwC China, concluded:
"The global entertainment & media industry has always thrived on technological disruption. To capitalise on the many growth opportunities, it must leverage the power of new and emerging technologies such as Generative AI, re-shape business and creative models, and leverage the technology for advertising. So far, many of the applications of Gen AI in the E&M industry have focused on speed and efficiency. As we look ahead, the industry will have to focus on how Gen AI can lead to greater value creation through experimenting, iterating, and scaling new solutions and processes."
Notes to Editors:
About the Outlook
PwC's Global Entertainment & Media Outlook 2024-28, now in its 25th year, provides in-depth analysis of global entertainment & media (E&M) consumer and advertising spending. The Outlook includes five-year historical and five-year forecast data and commentary for 11 industry segments across 53 countries and territories. Segments are business-to-business; cinema; connectivity service; internet advertising; music, radio and podcasts; newspapers, consumer magazines and books; out-of-home (OOH) advertising; over-the-top (OTT) video; traditional TV; video games and esports; virtual reality (VR) and augmented reality (AR). In addition, the Outlook tracks data consumption and important developments in technologies such as AI, Metaverse and NFTs. The full Outlook can be accessed at www.pwc.com/outlook.
About PwC
© 2024 PwC. All rights reserved. PwC refers to the PwC network and/or one or more of its member firms, each of which is a separate legal entity. Please see www.pwc.com/structure for further details.
1. International Monetary Fund, World Economic Outlook, April 2024, https://mediacenter.imf.org/news/imf---world-economic-outlook-april-2024/s/b5844e32-a21c-4a48-8665-00b667aeb68c.
2. The outlook analysed three broad E&M categories including: advertising, connectivity, and consumer. The definitions of each are explored in the outlook.
3. Excluding connectivity revenues.
4. For a full breakdown of E&M sector growth, please consult the full report on pwc.com.
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