Technological disruption and increased geographic and industry competition in the global entertainment and media industry has set advertising revenue rolling. Total revenues rose five percent in 2023 to USD 2.8 trillion.
PwC’s ‘Global Entertainment & Media Outlook 2024-28’, which covered 11 revenue segments across 53 countries and territories, found that revenues are set to touch $3.4 trillion in 2028. It will grow 3.9 percent compound annual growth rate. The report says advertising revenue will hit $1 trillion in 2026, account for about 55 percent of total E&M industry revenue growth over the next five years.
It stated that streaming services, traditionally dependent on subscription models, face increased competition and challenges in consumer use and uptake. They are looking for consolidation, live sports, a crackdown on password sharing, and ad-based models to drive growth.
The United States is the world’s largest consumer spending and advertising market. It represented more than one-third of global spending in 2023. Other large markets like China, India, Indonesia and Nigeria are growing quickly.
Werner Ballhaus, Global Entertainment & Media Leader at PwC Germany, said market players face risks and opportunities as the global entertainment & media industry continues to grow. “Shifts in consumer preferences, and uncertainty around the continued impact of digital transformation and new and emerging technology like Generative AI, are inspiring a wave of business model reinvention,” he said. “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.”
Ballhaus added that 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.
PwC report spotlighted internet advertising as the largest and one of the fastest-growing components of the advertising industry – growing 10.1 percent in 2023, adding $52.5 billion in new revenues. This is projected to increase at 9.5 percent CAGR through 2028 and account for 77.1 percent of total ad spending.
Streaming service usage is also increasing but at a lower rate. Service providers are facing increased competition and challenges in getting consumers to pay more for digital goods and services. Global subscriptions to OTT video services, as per the report, will rise to 2.1 billion in 2028 from 1.6 billion in 2023. However, the global average revenue for OTT video subscriptions is not expected to grow much.
This is prompting streamers to reshape their business models and find new revenues beyond subscriptions.
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