Global entertainment and media had a strong year outpacing global economic growth. Revenues were USD 2.3 trillion last year, virtual reality grew 36% and esport will become a USD 324 billion business, consultancy PwC says in an outlook for 2022 – 20226. The company predicts that in the not-too-distant future the metaverse could become a stunningly realistic world where individuals access immersive virtual experiences, through a VR headset or other connecting device.

“Because the metaverse is an evolution that may profoundly change how businesses and consumers interact with products, services and each other, its potential financial and economic value goes far beyond VR. In time, much of the revenues associated with video games, music performances, advertising and even e-commerce could migrate into the metaverse.”

diverse

“Following a pandemic-related 2.3% decline in 2020, E&M revenue rose a strong 10.4% in 2021, from USD 2.12 trillion to USD 2.34 trillion.  With the industry becoming more digital, more mobile and more youth-oriented, virtual reality (VR) and gaming are powerful growth drivers, while digital advertising permeates all of the industry.”

“We are seeing the emergence of a global E&M consumer base for the coming years that is younger, more digital and more into streaming and gaming than the current consumer population. This is shaping the future of the industry”, says Werner Ballhaus, Global Entertainment & Media Industry Leader, PwC Germany.

Findings:

• Global video games and esports revenue totaled USD 6 billion in 2021 and is forecast to grow at a 8.5% CAGR to USD 323.5 billion in 2026. Asia Pacific generated the lion’s share of revenues in 2021 with USD 109.4 billion, almost double North America, the second highest region. Gaming is now the third-largest data-consuming  E&M content category, behind video and communications.
• VR continues to be the fastest-growing E&M segment, albeit from a relatively small base. Global VR spend rose by 36% y-o-y in 2021 to USD 6 billion, following on the hot 39% growth in 2020. Growth between 2021 and 2026 is expected at 24% CAGR, bringing the segment to USD 7.6 billion. Gaming content is the primary contributor to VR revenue, taking  in USD1.9 billion in 2021. This should increase to USD 6.5 billion in 2026, 85% of total VR revenue.
• Advertising’s spread throughout the digital world has made it a dominant industry category.  After a decline of nearly 7% in 2020, advertising grew 22.6% in 2021 to USD 2 billion.  Driven almost entirely by digital, advertising is set to grow at a 6.6% CAGR through 2026.  Internet advertising revenue is seen growing even faster, expanding at 9.1% CAGR.  In 2026, advertising is projected to be a USD 1 trillion market and the largest E&M revenue stream, having surpassed consumer spending and internet access.
• After growing by 35.4% in 2020, Over-the-top (OTT) video surged another 22.8% in 2021, pushing revenues to USD 1 billion. The pace of OTT revenue growth will moderate somewhat; it is expected to grow at a 7.6% CAGR through 2026, pushing revenues to USD 114.1 billion.
• Traditional TV, beset by competition from OTT streaming services, still generates considerable revenues, but its inexorable decline will continue, with global revenues projected to shrink at a -0.8% CAGR from USD 231 billion in 2021 to USD 1 billion in 2026.
• Global cinema revenue is bouncing back, reversing its pandemic-driven losses, and is expected to reach a new high of USD 4 billion in 2023.  Box office revenue is projected to reach USD 49.4 billion in 2026 from USD 20.8 billion in 2021, an 18.9% CAGR. China surpassed the US to become the world’s biggest cinema market in 2020, and is expected to retain this leadership through 2026.
• Live music revenue is projected to exceed pre-pandemic levels in 2024. Digital music- streaming subscriptions are driving growth in the recorded music sector where revenues are forecast to rise from USD 1 billion in 2021 to USD 45.8 billion in 2026.
• The growth of content is fuelling massive data consumption – 2.6 million petabytes (PB) of data were consumed in 2021, and it is expected to rise at a 26% CAGR to reach 8.1 million PB by 2026. Gaming will be the fastest-growing data consumer over the forecast period, with a 29.6% CAGR expected. Mobile handsets will be the fastest-growing device category between 2021 and 2026, increasing at a 28.8% CAGR and expected to push mobile data consumption up from 1.1 million PB to 3.8 million PB.