Despite economic challenges, technological disruptions, and increased competition in certain geographic areas and within specific sectors, the global entertainment and media sector continued to grow in 2023. According to PwC’s newly released research on the entertainment and media sector, Global Entertainment & Media Outlook 2024-28, total revenues increased by five percent to $2.8 trillion, which is higher than the overall economic growth according to the International Monetary Fund (IMF).
The research, which covers 13 sectors in 53 countries and territories, predicts that global revenues in the entertainment and media sector will reach $3.4 trillion by 2028, with a compound annual growth rate (CAGR) of 3.9 percent. Specifically, advertising revenues are expected to reach $1 trillion by 2026 and are projected to contribute more than half (55 percent) of the total revenue growth in the entertainment and media sector over the next five years.
The research also shows that streaming services, which have traditionally relied on subscription models, are facing increased competition and challenges in usage and acceptance by consumers. To stimulate growth, they are now focused on consolidation, live sports broadcasts (including major events like the Summer Olympics), combating password sharing, and adopting ad-based models.
Globally, the United States remains the largest market for consumption and advertising, with a projected CAGR of 4.3 percent by 2028. In 2023, the U.S. accounted for more than one-third of global consumption. However, other major markets, including China (7.1 percent) and India (8.3 percent), as well as less mature markets like Indonesia (8.5 percent) and Nigeria (10.1 percent), are experiencing faster growth.
– As the global entertainment and media sector continues to grow, market players face risks but also opportunities. Changes in consumer preferences, along with uncertainties regarding the ongoing impact of digital transformation and new technologies such as generative artificial intelligence, are driving a wave of transformation in business models. To secure their share of the growing revenue sources we have identified, market players must reassess how their companies create, deliver, and retain value. This involves leveraging advertising growth while simultaneously harnessing the strong potential of artificial intelligence. Given the increasing consumption of virtual content by consumers, companies will need to expand their product offerings and continue to engage with consumers on the platforms where they spend most of their time, said Werner Ballhaus, global leader of entertainment and media services at PwC Germany.
Online advertising generated $52.2 billion
Global advertising revenues are expected to grow at an annual rate of 6.7 percent (CAGR) by 2028, which is higher than the other two major analyzed segments of the entertainment and media sector: connectivity (2.9 percent) and consumers (2.2 percent). Meanwhile, advertising revenues are projected to reach $1 trillion by 2026, and revenues in 2028 are expected to double compared to 2020. Based on the three analyzed major segments of the entertainment and media sector, advertising is expected to account for 55 percent of the total growth in the entertainment and media sector over the next five years.
Online advertising is the largest and one of the fastest-growing components of the advertising sector. It grew by 10.1 percent in 2023, generating $52.5 billion in new revenue, and is expected to continue growing at an annual rate of 9.5 percent by 2028, when it will account for 77.1 percent of total advertising spending.
The use of streaming services and their acceptance is growing, albeit more slowly compared to previous years, as providers face increased competition and challenges in convincing consumers to pay more for digital goods and services. Global subscriptions to over-the-top (OTT) video services (media, communication, and information services that are directly offered and available to viewers via the open internet) are expected to rise to 2.1 billion by 2028, up from 1.6 billion in 2023, representing a CAGR of 5 percent. The global average revenue per OTT video subscription is expected to increase slightly, from $65.21 in 2023 to $67.66 in 2028.
Due to this stagnation effect, leading streaming services are forced to reshape their business models and seek new sources of revenue beyond subscriptions. This includes introducing ad-supported subscription options (lower subscription fees with ad-filled content), combating password sharing, introducing live sports broadcasts, and consolidating the sector. In developed markets, this consolidation is occurring through the merging of subscription service providers. By 2028, advertising is expected to account for about 28 percent of global streaming revenues in the OTT market, compared to 20 percent in 2023.
Gaming sector with a growth of 4.6 percent
The global gaming sector, which includes e-sports (professional gaming tournaments with live audiences), has maintained its status as one of the fastest-growing major segments in the entertainment and media sector. In 2023, total revenues reached $227.6 billion, representing an increase of 4.6 percent. Revenues are expected to exceed $300 billion by 2027, nearly double the level in 2019. The Asia-Pacific market remains the largest regional gaming market, accounting for 48.1 percent of the total global segment. It is projected to rise to 54.4 percent or $181.8 billion by 2028.
In other segments of the entertainment and media sector, personal, real, technologically enhanced experiences such as live music and cinema continue to be sectors with significant growth. Ticket sales for cinemas and concerts accounted for 38.6 percent of global consumption in 2023. Thanks to events like global music tours, revenues from live concerts increased by 26 percent and accounted for more than half of the total music market.
Fueled by a number of blockbusters in 2023, cinema recorded a revenue increase of 30.4 percent compared to the previous year. By 2026, global cinema revenues are expected to exceed pre-pandemic levels from 2019.
– The global entertainment and media sector has continuously advanced despite technological disruptions. To capitalize on numerous growth opportunities, the sector must leverage the potential of new technologies such as generative artificial intelligence, reshape business and creative models, and utilize technology for advertising. In the past, the application of generative artificial intelligence in the entertainment and media sector was focused on achieving speed and efficiency. In the future, the sector will need to focus on ways in which generative artificial intelligence can drive greater value creation through experimentation, iteration, and scaling new solutions and processes, concluded Wilson Chow, global leader of technology, media, and telecommunications (TMT) services at PwC China.
