Bright Future on the Horizon for Entertainment, Media

While the COVID-19 pandemic brought uncertainty to public health, supply chains, and geopolitics, it also brought greater clarity to the entertainment and media (E&M) market. However, these overall growth patterns mask underlying volatility, given that the pandemic accelerated changes in consumer behavior and digital adoption that might not be sustainable.

"With the impressive growth and potential of the E&M industry comes tremendous volatility and what we describe as fault lines and fractures opening up between companies, within sectors, and across geographies and generations (…) Our data shows the mix of revenues and spending is changing rapidly. The challenge and goal must be to understand your consumer and end up on the right side of disruption," said Werner Ballhaus, Global Entertainment & Media Industry Leader, PwC Germany.

Consumer interest in E&M was strengthened by COVID-19 lockdowns, which led to increases in the consumption of digital content and services such as exercise programs, streaming entertainment and online shopping. The sector, however, faces a volatile future as it remains uncertain whether the boost experienced during the pandemic is sustainable.

The fastest-growing country by consumer revenue is Turkey, with a forecasted 14.2 percent CAGR from 2021 to 2026 that will be driven by strong consumption of video games, music and cinema. At the opposite end of the spectrum, Japan's aging and declining population will grow at just a 1.4 percent CAGR through 2026.

Mexico stands in seventh place with a forecasted 7.1 percent CAGR between 2021 and 2026. "Mexico has Latin America's largest and most competitive over-the-top services sector. Differentiating to captivate is the biggest challenge in this sector,” reads the report. PwC’s analysis explains that over-the-top services will have sustained growth over the next five years, with projections indicating that in 2022 this sector will generate revenues of US$1.257 billion and reach a volume of US$1.899 billion in 2026.

According to the report, global video games and e-sports revenue totaled US$215.6 billion in 2021 and will grow at an 8.5 percent CAGR to US$323.5 billion in 2026. After a decline of nearly 7 percent in 2020, advertising grew an impressive 22.6 percent in 2021 to US$747.2 billion. Traditional TV, beset by competition from OTT streaming services, still generates considerable revenues. Still, its inexorable decline will continue, with global revenues projected a 0.8 percent contraction in CAGR from US$231 billion in 2021 to US$222.1 billion in 2026. Cinema revenue is bouncing back, reversing its pandemic-driven losses. It is expected to reach a US$46.4 billion high in 2023. Box office revenue is projected to reach US$49.4 billion in 2026 from US$ 20.8 billion in 2021, an 18.9 percent CAGR, according to PwC.