PwC: Worldwide Entertainment and Media Income Keeps Growing

PwC's Global Entertainment & Media Outlook 2024-28, the worldwide entertainment and media industry experienced continued growth in 2023, with total revenues rose by 5% to reach $2.8 trillion. The outlook, which examines 11 income segments across 53 countries and territories, forecasts that global E&M revenues will rise to $3.4 trillion by 2028, indicating a compound annual growth rate (CAGR) of 3.9%. Notably, advertising income is expected to reach $1 trillion by 2026 and is forecast to contribute more than half (55%) of the industry's revenue growth over the next five years.

The outlook also displays that streaming services, which have traditionally relied on subscription models, are experiencing greater competition and challenges in consumer adoption. To drive growth, these services are exploring consolidation, live sports events (including major events like the Summer Olympics), measures to combat password sharing, and ad-supported models.

Globally, the US continues to be the largest market for consumer spending and advertising, accounting for over one-third of global spending in 2023 and experiencing a 4.3% compound annual growth rate (CAGR) through 2028. However, other major markets like China (7.1%) and India (8.3%), as well as emerging markets such as Indonesia (8.5%) and Nigeria (10.1%), are growing at a faster pace.

“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.” – Werner Ballhaus, Global Entertainment & Media Leader, PwC Germany.

Global advertising revenue is predicted to grow at a 6.7% compound annual growth rate (CAGR) through 2028, outpacing the other two major E&M segments: connectivity (2.9%) and consumer (2.2%). Total advertising revenue is expected to reach $1 trillion by 2026 and double the 2020 figures by 2028. Advertising is projected to contribute 55% of the E&M industry's growth over the next five years. Internet advertising, the largest and one of the fastest-growing sectors within the industry, grew by 10.1% in 2023, adding $52.5 billion in new revenues. It is expected to grow at a 9.5% CAGR through 2028 and will represent 77.1% of total ad spending.

Streaming service usage and consumer adoption are increasing, though at a slower pace than in previous years, as providers encounter intensifying competition and challenges in persuading consumers to spend more on digital goods and services. Global subscriptions to over-the-top (OTT) video services are expected to grow from 1.6 billion in 2023 to 2.1 billion by 2028, reflecting a 5% compound annual growth rate (CAGR). Meanwhile, the global average revenue per OTT video subscription is projected to rise only slightly, from $65.21 in 2023 to $67.66 in 2028.

This stagnation is prompting leading streamers to rethink their business models and explore new revenue streams beyond subscriptions. Strategies include offering ad-supported variants (lower subscription fees with advertising), combating password sharing, incorporating live sports, and pursuing industry consolidation. In developed markets, unification often involves tying up subscription services. By 2028, advertising is anticipated to represent approximately 28% of global OTT streaming revenues, up from 20% in 2023.

Global gaming, including e-sports (competitive gaming with professional tournaments and live audiences), continued to be one of the fastest-growing large sectors within the E&M industry, with total revenue reaching $227.6 billion in 2023, a 4.6% increase. Revenue is projected to exceed $300 billion by 2027, nearly doubling its 2019 level. The Asia-Pacific region remains the largest market for gaming, holding 48.1% of the global total, and is expected to grow to 54.4%—or $181.8 billion—by 2028.

In other areas of E&M, in-person, tech-enhanced experiences such as live music and cinema continue to be major growth drivers. Movie box office and music ticket sales together accounted for 38.6% of the increase in global consumer spending in 2023. Fueled by high-profile events like world tours, live music revenues surged by 26% and represented more than half of the total 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.

“The global entertainment & media industry has always thrived on technological disruption. To capitalize 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.” – Wilson Chow, Global Technology, Media and Telecommunications (TMT) Industry Leader, PwC China.