Gaming key for growth in entertainment and media
Global entertainment and media revenues will grow every year through 2027 – creating a USD 2.8 trillion industry but the rate of growth will decline every year. Advertising revenue will approach USD 1 trillion in 2027 and become the largest in entertainment and media sector, even as consumer spending loses steam and competitive landscape shifts, consultancy PwC says in a forecast.
Digital will account for nearly three quarters of the secor’s revenue by 2027, up from 55.2% in 2018. Gaming sector remains a key driver of industry growth – particularly in Asia-Pacific – with global gaming revenues to hit USD 312 billion by 2027
Live events are predicted to return to pre-pandemic highs in 2024 and outperform the sector at-large.
Global internet access will approach a USD 1 trillion market as annual data consumption triples between 2022 and 2027.
“For the global entertainment & media industry, 2022 marked an important inflection point. Total industry revenue rose 5.4% in 2022 to USD 2.32 trillion – a sharp deceleration from the 10.6% growth rate in 2021 when economies and industries were recovering from the onset of the COVID-19 pandemic”, the forecast says.
“Macroeconomic pressures, geopolitical instability and inflationary challenges hit consumers hard in 2022, pushing companies to reset expectations, refocus inward and seek new ways to drive growth in 2023 and beyond.”
“Consumer spending on E&M products and services is expected to grow at just a 2.4% compounded annual growth rate (CAGR) between 2022 and 2027. The declining growth rates were among the factors that have put an end to a long-term boom in deal activity in the E&M market globally, both for mergers and acquisitions (M&A) and venture capital.
The forecast, covering 13 sectors and 53 countries and territories, finds that while the rate of revenue growth is expected to decline in each of the next five years through 2027 – in part due to weakening consumer spending – E&M will grow to become a US$2.8 trillion industry by 2027.
Regionally, the US will continue to remain the largest global E&M market (growing from USD 819 billion in 2022 to USD 943 billion in 2027), followed by China (growing from USD 388 billion to USD 480 billion).
China is forecast to grow at a 4.3% compounded annual growth rate (CAGR), compared with a 2.9% CAGR for the US.
“Amid a broad-based resetting of expectations and flagging consumer strength, companies are seeking growth in sectoral hotspots (especially advertising and gaming), emerging technologies such as generative AI, and regions with outsized growth prospects like Asia.”
Advertising remains a key growth sector and is expected to approach USD 1 trillion in 2027. At USD 952.6 billion in 2027, it will be the largest of the three broad sectors PwC tracks: consumer, advertising, internet access.
“While advertising dollars are growing, they’re getting spread more thinly as more market players – including e-commerce sites, video games and streaming platforms – take market share from large social media and search platform incumbents.”
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