Entertainment and media is set to boom according to a new report
The frequently negative events in the world provide a springboard for the entertainment and media (E&M) sector – telling us what’s happening and then offering respite.
And it seems that E&M is set to surge in the next few years, teeing up opportunity for investors to benefit from gains in everything from advertising, live events, cinemas, video games, and more.
A new report from PwC says that the sector will surge from almost US$3 trillion in 2024 to $3.5 trillion by 2029, growing at a steady 3.7% CAGR, a rate above the projected global economic growth average, but below pre-pandemic highs.
Among the key growth drivers is an explosion in digital advertising with PwC estimating that ad revenues will grow at about 6.1% CAGR, tripling the growth of consumer spending. As with so much today, AI will assist in this growth according to Bart Spiegel, global E&M leader, PwC US.
"As the E&M industry continues to be impacted by broader economic uncertainty and constrained consumer spending, advertising is emerging as the leading powerhouse of the global entertainment and media industry's revenues – a transformation expected to continue as AI transforms delivery models, democratises content production, serves highly curated content experiences, and reduces barriers to entry,” he says.
While subscription models had been a growth area, the report says that this is now slowing and advertising is rising, such as ad-supported tiers for Netflix and ‘FAST’ channels that are free to watch and supported by advertising.
But for investors who are not persuaded by the ad industry, there should also be opportunities in live music, events and cinema.
Although consumers are spending more of their free time online, the majority of their entertainment dollars still go toward offline experiences. In 2024, non-digital formats made up 61% of consumer entertainment spending—a trend expected to remain steady over the coming years.
At the same time, global cinema box office revenue is projected to grow from $33 billion in 2024 to $41.5 billion by 2029. However, audiences are increasingly favoring locally produced films. The dominance of the top five US studios has declined, with their global market share falling from over 60% pre-pandemic to just 51% in 2024.
Meanwhile, video games are showing solid growth with the global video games market exceeding the movie and music industry combined. Total revenues were $224 billion in 2024, with the industry expected to grow to nearly $300 billion in 2029 at a CAGR of 5.7%.
