The global entertainment and media (E&M) industry has regained its momentum, with revenues outpacing the economy as a whole, according to latest Global Entertainment & Media Outlook 2021-2025 from PwC. The $2+ trillion industry is on track to grow 6.5 percent in 2021 and 6.7 percent in 2022, fueled by strong demand for digital content and advertising. The renewed growth follows a challenging 2020, when in-person entertainment plummeted, including a 71 percent decline in movie theater box office revenues. The 22nd annual study analyzed E&M spending by consumers and advertisers across 53 territories.
Werner Ballhaus, Global Entertainment & Media Industry Leader Partner, PwC Germany, said, “The pandemic slowed the entertainment and media industry last year, but it also accelerated and amplified power shifts that were already transforming the industry. Whether it’s box office revenues shifting to streaming platforms, content moving to mobile devices, or the increasingly complex relationships among content creators, producers and distributors, the dynamics and power within the industry continue to shift. Our Outlook shows that the hunger for content, continued advances in technology and new business models and ways of creating value will drive the industry’s growth for the next five years and beyond.”
Other findings of the Outlook include:
- The 3.8 percent decline in global E&M revenue, from $2.1 trillion in 2019 to $2.0 trillion in 2020, was the biggest year-on-year drop in the Outlook’s 22 years. But there were bright spots in a number of E&M segments created by shifting consumer demand.
- From 2021 to 2025, we project global E&M revenue to grow at a healthy compound annual growth rate (CAGR) of 5.0 percent, taking industry revenues to US$2.6trn in 2025.
- Traditional TV/home video remains the largest E&M consumer segment ($219 billion) but will continue to shrink (-1.2 percent CAGR) over the next five years.
- Video streaming boomed in 2020 and its growth trajectory will continue. Streaming video-on-demand (SVOD) is projected to grow at a CAGR of 10.6 percent to 2025, making it an $81.3 billion industry. Meanwhile, cinema revenues are projected to rebound in 2021 as lockdowns ease but will not recover to pre-pandemic levels until at least 2024.
- Video game and e-sports revenues continue their rapid ascent, reaching $147.7 billion in 2020, with a 5.7 percent CAGR projected to expand the segment to become an almost $200 billion business ($194.4 billion) by 2025.
- Virtual reality (VR) is the fastest-growing E&M segment, albeit from a small base. Its revenues surged by 31.7 percent in 2020 to $1.8 billion and are projected to sustain a CAGR of 30 percent+ over the next five years to reach $6.9 billion business in 2025.
- Music is poised for robust growth following a massive 74.4 percent slump in live music revenues in 2020. We expect total music revenues to grow at a 12.8 percent CAGR over the next five years, fueled by digital streaming, which will expand to become a $29.3 billion business by 2025, along with a return to live performances.
- Spending on internet advertising rose by 9 percent to $336 billion in 2020, overtaking non-internet ad spending for the first time, and is projected for strong growth of 7.7 percent CAGR over the next five years.
- Internet access accounted for 34 percent of E&M spending in 2020 and will increase at a 4.9 percent CAGR, from 2020’s $694 billion to $880 billion in 2025. Mobile internet access will drive market growth, with revenues rising at a 6.1 percent CAGR from $449 billion in 2020 to $605 billion in 2025, underpinned by the spread of 5G, advances in handset technology, and premium content bundles.