The global entertainment and media (E&M) industry surged last year, far outpacing overall global economic growth, according to consultancy PwC’s Global Entertainment and Media Outlook 2022-2026. After a pandemic-related decline of 2.3% in 2020, E&M
The global entertainment and media (E&M) industry surged last year, far outpacing overall global economic growth, according to consultancy PwC’s Global Entertainment and Media Outlook 2022-2026.
After a pandemic-related decline of 2.3% in 2020, E&M revenues rose sharply by 10.4% in 2021, from $2.12 trillion to $2.34 trillion ($2.24 billion). euros). As the industry becomes more digital, more mobile and more youth-focused, virtual reality (VR) and gaming are powerful growth drivers, while digital advertising permeates the entire industry.
This year’s discoveries Outlookthe 23rd annual analysis and forecast of consumer and advertiser E&M spending in 52 countries and territories, includes:
- Global video game and esports revenue totaled $215.6 billion in 2021 and is expected to grow at a CAGR of 8.5% to reach $323.5 billion in 2026. Asia-Pacific generated the lion’s share of revenue in 2021 with $109.4 billion, nearly double that of North America, the second highest. Region. Gaming is now the third data-consuming E&M content category, behind video and communications.
- Virtual reality continues to be the fastest growing E&M segment, albeit from a relatively small base. Global virtual reality spending grew 36% year-on-year in 2021 to $2.6 billion, following strong growth of 39% in 2020. Growth between 2021 and 2026 is expected to reach a CAGR of 24%, driving the segment at $7.6 billion. Gaming content is the largest contributor to VR revenue, with $1.9 billion in 2021. This is expected to increase to $6.5 billion in 2026, or 85% of total VR revenue.
- The spread of advertising in the digital world has made it a dominant industry category. After declining nearly 7% in 2020, advertising grew by an impressive 22.6% in 2021 to $747.2 billion. Driven almost entirely by digital, advertising is expected to grow at a CAGR of 6.6% through 2026. Internet advertising revenue is expected to grow even faster, reaching a CAGR of 9.1%. By 2026, advertising is expected to be a $1 billion market and the largest source of O&M revenue, having surpassed consumer spending and internet access.
- After growing 35.4% in 2020, over-the-top (OTT) video jumped another 22.8% in 2021, bringing its revenue to $79.1 billion. The pace of OTT revenue growth will slow somewhat; it is expected to grow at a CAGR of 7.6% through 2026, bringing revenue to $114.1 billion.
- Traditional TV, beset by competition from OTT streaming services, is still generating considerable revenue, but its inexorable decline will continue, with global revenue expected to decline at a CAGR of -0.8% from $231 billion. in 2021 to $222.1 billion in 2026.
- Global cinema revenues rebound, reversing losses caused by the pandemic, and are expected to reach a new high of $46.4 billion in 2023. Box office revenues are expected to reach $49.4 billion in 2026 from 20, $8 billion in 2021, a CAGR of 18.9%. . China overtook the United States to become the world’s largest cinema market in 2020 and is expected to maintain this leadership until 2026.
- Live music revenue is expected to surpass pre-pandemic levels in 2024. Digital music streaming subscriptions are driving growth in the recorded music sector, where revenue is expected to grow from $36.1 billion in 2021 to $45.8 billion in
- Content growth is fueling massive data consumption – 2.6 million petabytes (PB) of data was consumed in 2021, and it is expected to grow at a CAGR of 26% to reach 8.1 million PB by 2026 Gaming will be the fastest growing consumer of data over the forecast period, with an expected CAGR of 29.6%. Mobile handsets will be the fastest growing device category between 2021 and 2026, growing at a CAGR of 28.8% and expected to drive mobile data consumption from 1.1 million PB to 3.8 million from PB.
“The industry press tends to focus on companies that have dominated the E&M industry,” suggests Werner Ballhaus, Global Entertainment & Media Industry Leader, PwC Germany. “But it’s the choices billions of consumers make about where to invest their time, attention and money that is fueling industry transformation and driving trends. We are seeing the emergence of a global E&M consumer base for years to come that is younger, more digital, and more interested in streaming and gaming than the current consumer population. It shapes the future of the industry.
Regionally, North America has by far the highest O&M expenditure per capita, at $2,229, nearly double Western Europe’s $1,158. In contrast, Asia-Pacific, which was the largest E&M region by revenue in 2021 at $844.7 billion, has per capita spending of $224. The Middle East and Africa has the lowest O&M expenditure per capita of any region in the world, at $82.
The top ten growth markets according to CAGR, meanwhile, focus on Latin America, the Middle East, Africa and Asia, with OTT video and games providing the majority of revenue growth, and esports and cinema also experiencing rapid growth. Turkey (estimated CAGR of 14.2%), Argentina (10.4%), India (9.1%) and Nigeria (8.8%) ranked highest for growth prospects O&M consumer spending over the five-year forecast period.
In the not-too-distant future, the Metaverse could become a startlingly realistic world where individuals access immersive virtual experiences, via a VR headset or other connecting device. Because the metaverse is an evolution that can profoundly change how businesses and consumers interact with products, services, and each other, its potential financial and economic value goes far beyond virtual reality. Eventually, much of the revenue associated with video games, musical performances, advertising, and even e-commerce could migrate to the metaverse.
What is the E&M opportunity in the metaverse? The fast-growing virtual reality market is a starting point to consider. It’s currently one of the smallest segments tracked, but the 36% rise in global spending over the past year is a hint of its long-term potential. The global installed base of standalone and connected VR headsets is expected to grow from 21.6 million in 2021 to 65.9 million in 2026.
“With the impressive growth and potential of the E&M industry comes enormous volatility and what we describe as fault lines and fractures opening up between companies, within sectors and across geographical areas and generations,” advises Ballhaus. “For businesses, intense competition and continued disruption will remain the order of the day. Our data shows that the composition of income and expenditure is changing rapidly. As fault lines proliferate and widen, all E&M activities are at risk of disruption. The challenge and the goal should be to understand your consumer and find themselves on the right side of the disruption. »