Introduction
The entertainment and media (E&M) industry continues to show robust growth despite facing economic headwinds, technological disruptions, and increasing competition across various sectors and regions. In 2023, the industry’s total revenue increased by approximately 7%, reaching around US$2.65 trillion, and it is projected to rise to nearly US$3.2 trillion by 2028. This report delves into the significant findings, emphasizing the rapid growth in global advertising revenue, the evolving dynamics in the streaming services sector, and the sustained expansion in gaming and live events.
Generative AI Transforming the E&M Industry
Generative AI is emerging as a transformative force within the E&M industry, driving new revenue streams and reshaping business models. As companies navigate the complexities of digital transformation and technological disruption, the adoption of AI technologies offers opportunities for efficiency and value creation. Applications of generative AI are primarily focused on enhancing speed and operational efficiency, but future advancements are expected to emphasize creative and business model innovations, leveraging AI to experiment, iterate, and scale new solutions.
Global Advertising Revenue Projections
Advertising revenue within the E&M industry is anticipated to surpass US$1 trillion by 2026, demonstrating a compound annual growth rate (CAGR) of approximately 4.7% through 2028. This segment is expected to account for about 53% of the total revenue growth in the E&M industry over the next five years. By 2028, the advertising revenue is expected to be almost double that of 2020, indicating a substantial increase in spending driven by various innovative advertising strategies and the proliferation of digital platforms.
Internet advertising stands out as the largest and one of the fastest-growing components of the advertising industry. It experienced a 12.1% growth in 2023, adding roughly US$48 billion in new revenues, and is projected to maintain a 7.5% CAGR through 2028. By that year, internet advertising will constitute approximately 75.1% of the total advertising expenditure, showcasing the significant shift towards digital and online advertising avenues.
Streaming Services: Navigating New Growth Models
The streaming services sector continues to experience rising usage and consumer uptake, although at a moderated pace compared to previous years. The number of global subscriptions to over-the-top (OTT) video services is expected to increase from 1.55 billion in 2023 to 2.0 billion in 2028, reflecting a 3% CAGR. Despite this growth in subscriptions, the average revenue per OTT video subscription is projected to see only a marginal increase, from US$64 in 2023 to US$68 in 2028, indicating a plateauing effect in consumer willingness to pay more for digital content.
In response to these challenges, leading streaming services are reshaping their business models to explore new revenue streams beyond traditional subscriptions. This includes the introduction of ad-based variants, reduced subscription fees with ad-supported content, a crackdown on password sharing, and an emphasis on live sports and other exclusive events to attract viewers. Industry consolidation is also playing a crucial role, particularly in developed markets, where bundling subscription service providers has become a common strategy. By 2028, advertising is projected to account for about 30% of global OTT streaming revenues, up from 18% in 2023.
Gaming Industry and Live Events: Continued Growth and Rebound
The gaming sector remains one of the fastest-growing segments within the E&M industry. Global gaming revenue reached around US$215 billion in 2023, a 2.6% increase from the previous year, and is expected to exceed US$290 billion by 2027. The Asia-Pacific region dominates the gaming market, contributing 46.1% of the global total, and is projected to increase its share to 52.4% by 2028, amounting to approximately US$170 billion.
In-person events, such as global cinema and live music, are witnessing a significant rebound. Cinema revenues saw a 28.4% year-on-year increase in 2023, buoyed by a series of blockbuster releases, and are poised to surpass pre-pandemic levels by 2026. Live music also experienced a substantial surge, with revenues rising by 24% in 2023, driven by large-scale tours and concerts, and accounting for over half of the overall music market.
Conclusion
The global E&M industry is on a trajectory of sustained growth, with significant contributions from advertising revenue, streaming services, gaming, and live events. As market players adapt to changing consumer preferences and technological advancements, the strategic implementation of generative AI and the exploration of new business models will be pivotal in capturing and maximizing the expanding revenue pools. Companies that successfully navigate these dynamics will be well-positioned to thrive in the evolving landscape of the global entertainment and media sector.
