The global entertainment & media (E&M) industry surged in 2021, outpacing overall global economic growth, with revenue up 10.4% to US$2.34 trillion, following a pandemic-related 2.3% decline in 2020.
The industry is becoming more digital, more mobile and more youth-oriented, virtual reality (VR) and gaming are powerful growth drivers.
Findings from PwC’s Global Entertainment & Media Outlook 2022-2026, the 23rd annual analysis and forecast spending by consumers and advertisers across 52 countries and territories:
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Global video games and esports revenue totaled US$215.6 billion in 2021 and is forecast to grow at a 8.5% CAGR to US$323.5bn in 2026. Asia Pacific generated the lion’s share of revenues in 2021 with US$109.4bn, almost double North America, the second highest region. Gaming is now the third-largest data-consuming E&M content category, behind video and communications.
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Virtual reality continues to be the fastest-growing segment, albeit from a relatively small base. Global VR spend rose by 36% y-o-y in 2021 to US$2.6 billion, following 39% growth in 2020. Growth between 2021 and 2026 is expected at 24% CAGR, bringing the segment to US$7.6 billion. Gaming content is the primary contributor to VR revenue, taking in US$1.9 billion in 2021. This should increase to US$6.5 billion in 2026, 85% of total VR revenue.
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Advertising’s spread throughout the digital world has made it a dominant industry category. After a decline of nearly 7% in 2020, advertising grew an impressive 22.6% in 2021 to US$747.2 billion. Driven almost entirely by digital, advertising is set to grow at a 6.6% CAGR through 2026. Internet advertising revenue is seen growing faster, expanding at 9.1% CAGR. In 2026, advertising is projected to be a $1 trillion market and the largest E&M revenue stream, having surpassed consumer spending and internet access.
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After growing by 35.4% in 2020, Over-the-top (OTT) video surged another 22.8% in 2021, pushing revenues to US$79.1 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 US$114.1bn.
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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 US$231 billion in 2021 to US$222.1 billion in 2026.
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Global cinema revenue is bouncing back, reversing its pandemic-driven losses, and is expected to reach a new high of US$46.4 billion in 2023. Box office revenue is projected to reach US$49.4bn in 2026 from US$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.
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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 US$36.1 billion in 2021 to US$45.8 billion in 2026
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The growth of content is fueling massive data consumption – 2.6mn petabytes (PB) of data were consumed in 2021, and it is expected to rise at a 26% CAGR to reach 8.1mn 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 1.1mn PB to 3.8mn PB.
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