For the entertainment and media industries, 2022 marked an important inflection point. PwC’s 24th annual “Global Entertainment & Media Outlook” report offers an in-depth, five-year forecast of evolving forces that will likely shape an industry on track to be a US$2.9 trillion market by 2027.
● STREAMING
According to the report, the United States remains the focal market of the global streaming wars with revenue of US$49.4 billion in 2022. By the end of the forecast period in 2027, the country will reach US$75.5 billion – more than threefold growth in a decade – dwarfing the next-biggest market, China, at US$25.9 billion.
However, the US OTT market overall has seen a seismic shift, as years of breakneck subscriber growth supercharged by the pandemic has slowed, the report noted. The forecast period highlights the increasing saturation of the US market and the future commercial challenges that pose for pure-play OTT and traditional cable and TV companies in the sector. As a result, there will be a new era with a focus on return on investment and profitable business models, PwC assured.
● INTERNET ADVERTISING
Though growth will slow over the next five years, the United States will also continue to retain its position as the largest global advertising market, reaching US$271.7 billion by 2027. Internet advertising is expected to evolve over the next ten years into a broader category of Web 3.0 and “metaverse advertising,” which will encompass online 3D advertising, VR advertising and perhaps other IOT advertising channels and spaces, along with new ad formats such as branded NFTs.
Generative AI technology also has the potential to disrupt the Internet advertising sector overall, evolving the consumer paths of discovery, and impacting commerce and engagement with content. Brands, agencies, ad tech firms and publishers who are able to capitalize on these growing trends will see improved margins and increased market share, according to PwC.
● GAMING
The composition of the video games market in the United States typifies that of a modern Western nation, with a rapidly growing social and casual gaming sector and a robust traditional gaming sector that exhibits slower overall growth as it transitions away from physical media to digital sales and microtransactions, the report noted. The largest generator of social and casual revenue in the United States is in-app games advertising, having surpassed app-based social and casual gaming in 2022.
● METAVERSE
PwC also highlighted that, although technology’s biggest players remain committed to the metaverse, they are showing more restraint in terms of their strategy, investment priorities and how they position the metaverse as a commercial proposition. Many are now reassessing their direction, with expensive hardware projects under scrutiny and significant cutbacks affecting metaverse operations. Despite these short-term challenges, however, the metaverse industry is gaining development traction, and for businesses, the implications of an immersive, persistent and decentralized digital world could be enormous, the report concluded.
Related News
