No Match Found
After the rebound comes the correction. In 2021, as the world began to emerge from the depths of the covid-19 pandemic, total global entertainment and media (E&M) revenue leapt by 10.6%. In 2022, new concerns, ranging from the uncertainties of war to a squeeze on consumers’ finances, took hold, and the industry’s revenue growth decelerated sharply to 5.4% (a rate that’s still healthy and impressive by historical standards). Over the coming five years, a colder reality will continue to bite, with global E&M revenue growth slowing sequentially, year-on-year; in 2027, industry revenue will rise just 2.8% from 2026.
The main brake on growth? Consumer spending. Beset by inflation, grappling with disruptions and the consequences of geopolitical tensions, consumers are pulling back. The consumer spending category of E&M will grow at a CAGR of only 2.4% between 2022 and 2027, triggering a major tipping point. Though consumer spending has historically been the largest of the three categories of E&M spending tracked in PwC’s Global Entertainment & Media Outlook, it’ll be overtaken in 2025 by advertising, which, fuelled by buoyant digital advertising, is expected to rise at a five-year CAGR of 4.5%. By 2027, consumer spending will slip behind internet access spending and become the smallest of the three main categories.
It isn’t hard to see why the industry’s revenue balance is shifting. Consumers’ spending on E&M products and services is declining as a share of their wallet. But e-commerce and time spent on digital platforms continue to grow. As a result, companies are looking to reach consumers not just at the point of purchase but at the point of decision—hence the strong growth in digital advertising dollars. However, even as digital advertising grows, it’s also getting spread more broadly: the share of global digital advertising claimed by the Meta–Alphabet duopoly is estimated to have slipped below 50% in 2022—as revenue from ad-supported video on demand is projected to nearly double over the next five years.
The streaming industry’s decision to embrace advertising is just one aspect of a renewed focus on restoring capital discipline and margins that spans E&M sectors. Advertising, a hotspot for growth, is central to this push, with the global ad revenue pot approaching US$1 trillion a year by 2027. But there are also several other enticing pools of revenue. Take video games, now coming into their own as a medium for creativity, with total revenue set to rise at a 7.9% CAGR to US$312 billion in 2027. Or live and in-person events, a rare bright spot for consumer spending, with a projected five-year CAGR of 9.6%. Or—looking at growth from a geographic perspective—the Asia market, powered by China’s advertising and consumer spending revenue expanding at a 6.1% CAGR over the forecast period (more than twice the rate of the US).
Across and beyond such segmented and geographic hotspots, opportunities for growth in E&M are being created by the convergence of new and existing technologies. As the metaverse’s hype cycle tails off, it’s regaining strength as a richer, more immersive environment for gaming, entertainment, work and commerce. But the metaverse has already been supplanted in the headlines by generative AI, with OpenAI’s ChatGPT rocketing to 100 million users in just two months. (It took Twitter more than five years to reach that milestone.) Generative AI’s applications in E&M range from automating routine tasks to dramatically accelerating content production to personalising and targeting ads more efficiently at scale.
As new technology uptake and experimentation continue, rising interest rates and the renewed focus on capital discipline have contributed to a dip in E&M mergers and acquisitions. Efficiency and scale are now the main motivations for deals. The US$43 billion Warner Bros.–Discovery merger, completed in April 2022, has been followed by efforts to restructure, reposition and refocus. In February 2023, the Competition Commission of India conditionally approved the US$10 billion merger between Zee Entertainment and Sony Pictures Entertainment. And there’s one megadeal still pending: Microsoft’s proposed US$68.7 billion acquisition of Activision Blizzard. At the time of writing, competition regulators in the EU have cleared the transaction, while their counterparts in the UK and the US are still blocking it, at least for now.
Regulation is a recurring theme: the combination of tightening data privacy rules in many jurisdictions and the imminent death of the tracking cookie by 2024 have intensified the search for ways to offer consumers personalised and targeted advertising and content while allowing them to remain anonymous. Much of this activity has focused on setting up clean rooms: secure data-storage and processing environments where users’ personally identifiable information is effectively anonymised. Meanwhile, the EU’s General Data Protection Regulation (GDPR) continues to influence data privacy regimes worldwide, with the US readying its own version, the American Data Privacy and Protection Act. Efforts to regulate—and self-regulate—will only take on greater importance as the E&M industry grows ever more reliant on digital products and services.
More tipping points loom, like global 5G penetration surpassing that of 4G in 2025. Meanwhile, themes such as regulation, personalisation, AI and virtual reality will remain central to E&M experiences. But whatever pathways to growth open up, it will be imperative for E&M players to identify a clear purpose and then innovate to deliver on it—which is really how things have always played out in this most creative of industries.
Total global B2B information revenue has now fully rebounded from the covid-19 pandemic, setting a new record of US$161.6bn in 2023.
In recent years, capital expenditure grew sharply as the industry invested in the build-out of 5G. But the growth rate in both fixed broadband and mobile broadband investment will decline every year through 2027. Although higher inflation and capital costs are instilling great caution, growth in telecom capex will be driven by operators in the US, Europe and Japan rolling out 5G, expanding their fixed fibre infrastructure, migrating systems to the cloud and exploring open-source network solutions.
Global cinema revenue (including advertising) was worth US$28.3bn in 2022, down from US$43bn in 2019, before the pandemic. But revenue is set to rise at a 13% CAGR over the next five years to reach US$52.1bn in 2027, and will surpass pre-pandemic levels in 2025.
A handful of Hollywood blockbuster movies are driving global box office revenue, underlining the public’s continued enthusiasm for entertainment on the big screen. But several major territories are seeing local films outperform US franchise films, including India, where local market share has stayed well over 80%.
Box office revenues are growing faster than cinema advertising, at a 13.8% CAGR, from US$25.3bn in 2022 to an estimated US$48.4bn in 2027.
The levels of data consumption will continue to grow each year as new technologies, such as 5G and wi-fi 6, are released. These new technologies will allow for data-heavy use cases, higher-quality digital content and increased access to the internet. Global data consumption reached 3.4 million petabytes (PB) in 2022, an increase of 30.5% from 2021, and will nearly triple to 97 million PB in 2027. This fast growth will create a dilemma for telecom companies because they will need to improve their networks to keep pace while still turning a profit.
Global internet access is on track to be a revenue market of nearly US$1.0 trillion by the end of the five-year forecast period, as telecom and pay-TV companies reap the benefits of soaring data consumption off the back of billions of dollars of investment in next-generation infrastructure. The data consumption boom is being fuelled by the inexorable growth in bandwidth-heavy activities, led by video streaming. The rollout of 5G and full-fibre broadband will reach an inflection point in the next decade as consumer penetration levels make them the standard technology for accessing internet services globally.
After rapid revenue growth of 30.8% in 2021, the global internet advertising market experienced a pronounced slowdown in 2022 to 8.1%, resulting in a total market value of US$484bn.
Rising consumer demand for new devices—from smart watches and cars to internet-enabled appliances and hospitals—is making the internet of things (IOT) a reality. The installed base of IOT-enabled products will surge, from 16 billion devices worldwide in 2022 to 25 billion in 2027, representing an 8.8% CAGR.
The live music sector, having fully recovered from the pandemic, will see revenue exceed pre- pandemic levels in 2023 and will grow in every year of the forecast period. Digital music streaming subscriptions remain popular, with global revenue rising from US$21.4bn in 2022 to US$27.6bn in 2027.
Global consumer books revenue is set to grow by a 1.2% CAGR between 2022 and 2027, rising to US$70.4bn. By contrast, newspaper revenue will decline overall at a -2.0% CAGR, to US$77.4bn, over the forecast period. Similarly, total consumer magazine revenue will fall at a -2.8% CAGR, to US$47.7bn, but digital advertising is set to overtake print advertising in 2025.
The out-of-home (OOH) advertising market has completely recovered from the pandemic, with revenues at an all-time high of US$36.6bn.
One of the chief beneficiaries of pandemic-era changes in consumer behavior, over-the-top video (OTT), is adjusting to a slower growth path. By 2027, annual revenue will be growing at a 4.6% rate.
Spectrum is a scarce and critical resource because the demand for spectrum for mobile communications exceeds the amount on offer. Regulators must decide which telecom operator would make use of this scarce resource most efficiently and provide the maximum socioeconomic benefits.
The global TV subscription market reached an inflection point in 2022, when, for the first time, it accounted for less than half of global traditional TV revenue. TV subscription revenue will be US$21bn less in 2027 than it was a decade earlier, driving traditional TV companies to seek growth from advertising.
Global video games and esports revenue stands out for its rapid growth: revenues are projected to rise from US$214.5bn in 2022 to US$314.6bn in 2027, representing at a 8.0% CAGR. Social and casual gaming continues to grow—from a 71.1% market share in 2022 to 78% in 2027.
Despite the economic challenges affecting the market for consumer devices, virtual reality (VR) continues to grow in popularity. Building on a strong 2020, thanks to the success of the Meta Quest 2 launch and heightened spending during the pandemic, 2022 delivered a 36.2% year- on-year increase in revenue from 2021.
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