PwC’s global entertainment and media outlook has suggested that the sector is heading for strong growth in the coming four years. According to the report, industry revenues could pass $3 trillion by 2028.
Over the last four years, the global media and entertainment industry has faced countless headwinds. The Covid-19 pandemic saw footfall for events and collective media experiences like cinema screenings fall through the floor. Spiralling inflation rates ate away at consumer spending power, with many cutting back on ‘discretionary spending’ such as entertainment as a result. And escalating tensions between several of the world’s largest economies mean that opening up new markets has become increasingly difficult.
In spite of the legacy of those issues still hampering the global economy in 2024, PwC has asserted that entertainment and media revenues are about to enjoy a healthy period of growth. According to the study, revenues rose 5% in 2023 to hit $2.8 trillion – in part driven by rising advertising income.
Looking ahead, PwC expects that to accelerate further in the coming period. Advertising accounts for 55% of total industry growth over the coming five years, according to the researchers – and will become a more important part of companies’ business models, even for those that had previously avoided ad revenues. For example, streaming companies which initially flouted in-content advertising such as Netflix and Amazon Prime have introduced mechanisms where a certain number of ads may play, depending on the amount users pay.
For strategic reasons, the researchers contend that “all participants in the industry need to become more proficient at selling ads”. Most importantly, this will mean demonstrating value that their advertising spaces create to prospective buyers. This can also be an opportunity, as players in the sector can monetise that data to fuel more sophisticated advertising models with their partners.
To that end, a ‘connected TV’ experience may be an important opportunity for media players, too. The researchers in particular note “addressable, measurable ads delivered on TV screens” which are set to become a “vital contributor to the revenues of direct-to-consumer online video providers”. Online connected TV (CTV) ads, which are served during video programming, are projected to double the revenue for the coming years, from $20.5 billion in 2023 to $41.2 billion in 2028.
But what will ultimately underline the success of such an operating model is ‘putting bums in seats’. Nobody wants to advertise on a platform with no discernible engagement from consumers – and many modern streaming services still remain resistant to giving detailed insight into the behaviour of their users. That includes how many of them there actually are.
A more discernible realm of the media and entertainment industry’s current success has been the events segment, and cinemas. According to PwC, ‘real life’ media events accounted for one-third of all consumer revenue growth in 2023 – with live music ticket sales bringing in an extra $6.6 billion, and $7.5 billion. Aided by a number of blockbuster releases in 2023 – such as the ‘Barbenheimer’ phenomenon – cinema saw a 30.4% year-on-year increase in spending at the box office. This led PwC to bullishly claim global cinema revenues are poised to surpass their pre-pandemic, 2019 levels in 2026.
If PwC expects cinemas to be a key part of a resurgent media and entertainment sector, however, many other experts seem to expect the opposite. In 2024, there has been no such surprise hit to rack up huge revenues at the box office, and across the US – the world’s largest market for cinemas – venues are closing doors across the country. In this context, Gower Street Analytics has predicted the global box office is heading for a 3% decline, and a major setback following three years of post-pandemic recovery. If that is anything to go by, the entertainment and media sector cannot by any means count on the meteoric growth supposedly heading its way.