Despite economic headwinds, technological disruption, and increased geographic and industry competition, the global entertainment and media (E&M) industry continued to grow in 2023. Total revenues rose by 5% to US$2.8 trillion, outpacing overall economic growth cited by the IMF, according to PwC's Global Entertainment & Media Outlook 2024-28, published today.

Covering 11 revenue segments across 53 countries and territories, the outlook projects global E&M revenues to reach $3.4 trillion by 2028, growing at a 3.9% compound annual growth rate (CAGR).

Advertising revenue is expected to hit $1 trillion in 2026 and will account for more than half (55%) of the total E&M industry revenue growth over the next five years.

The report also highlights challenges faced by streaming services, which are now looking to consolidation, live sports events, cracking down on password sharing, and ad-based models to drive growth.

The US remains the world's largest market for consumer spending and advertising, with a 4.3% CAGR projected to 2028. However, faster growth is expected in other large markets such as China (7.1%) and India (8.3%), as well as less mature markets like Indonesia (8.5%) and Nigeria (10.1%).

Werner Ballhaus, Global Entertainment & Media Leader at PwC Germany, commented:

"As the global entertainment and media industry continues to grow, market players face both risks and opportunities. Shifts in consumer preferences and uncertainty around the impact of digital transformation and emerging technologies like Generative AI are inspiring a wave of business model reinvention. Companies will need to reimagine how they create, deliver, and capture value, leveraging the growth of advertising and the opportunities presented by AI. As consumers increasingly consume content online, diversifying product offerings and connecting with consumers on the platforms where they spend more time will be crucial."

Global advertising revenue is projected to grow at a 6.7% CAGR through 2028, outpacing other E&M segments such as connectivity (2.9%) and consumer (2.2%). Total advertising revenue is expected to hit $1 trillion in 2026, doubling the revenues of 2020.

Internet advertising, the largest and fastest-growing component of the advertising industry, grew 10.1% in 2023, adding $52.5 billion in new revenues. It is projected to rise at a 9.5% CAGR through 2028, accounting for 77.1% of total ad spending by then.

Streaming services are seeking new models to drive growth as consumer uptake rises at a slower rate than in recent years. Global subscriptions to over-the-top (OTT) video services are projected to rise to 2.1 billion by 2028, up from 1.6 billion in 2023. However, global average revenue per OTT video subscription is expected to grow only slightly, from $65.21 in 2023 to $67.66 in 2028.

This plateauing effect is pushing leading streamers to reshape their business models, introducing ad-based variants, cracking down on password sharing, incorporating live sports, and pursuing industry consolidation. By 2028, advertising will account for about 28% of OTT global streaming revenues, up from 20% in 2023.

The gaming industry stands out as a fast-growing sector, with total revenue reaching $227.6 billion in 2023, up 4.6%. Revenue is on track to top $300 billion by 2027, almost double its level in 2019. The Asia-Pacific region remains the largest market for gaming, representing 48.1% of the global total, rising to 54.4%—or $181.8 billion—by 2028.

In-person, tech-enabled experiences such as live music and cinema remain key growth industries. Movie box office and music ticket sales represented 38.6% of the net increase in consumer spending worldwide in 2023. Driven by large events like musician world tours, live music revenues rose 26%, accounting for more than half of the overall music market.

Cinema saw a 30.4% year-on-year increase in box office spending, aided by several blockbuster releases. Global cinema revenues are poised to surpass pre-pandemic levels by 2026.

Wilson Chow, Global Technology, Media and Telecommunications (TMT) Industry Leader at PwC China, concluded:

"The global entertainment and media industry has always thrived on technological disruption. To capitalize on growth opportunities, the industry must leverage new technologies such as Generative AI, reshape business and creative models, and innovate in advertising. While current applications of Gen AI in E&M focus on speed and efficiency, future applications will need to drive greater value creation through experimentation, iteration, and scaling of new solutions and processes."