After falling 2.3% in 2020, total global entertainment and media (E&M) revenue rose a strong 10.4% in 2021, resuming its trend of outpacing global growth. In 2022, the US$2.5 trillion global industry is expected to grow 7.3%, and it should notch a 4.6% CAGR through 2026, PwC revealed in its latest “Global Entertainment & Media Outlook Perspectives” report.
Furthermore, according to the study, after surging in 2020, over-the-top (OTT) video grew an additional 22.8% in 2021, pushing revenue to US$79.1 billion. The pace of OTT revenue growth will moderate, as it is expected to grow at a 7.6% CAGR through 2026, when revenue will be US$114.1 billion.
Meanwhile, video games revenue, which rose 32% between 2019 and 2021, will rise at an 8.4% CAGR through 2026, creating a US$321 billion industry. Traditional TV, beset by competition from OTT streaming services, will see global revenue shrink at a -0.8% CAGR, from US$231 billion in 2021 to US$222.1 billion in 2026. Lastly, cinemas, which are slowly reviving from the Covid shutdowns, will not regain their 2019 revenue total of US$45.2 billion until 2023.
According to PwC, the two big themes newly evident in the forecast are the increasing digitization of E&M and the rising dominance of advertising. Advertising, which fell nearly 7% in 2020, grew a stunning 22.6% in 2021 — and represented 32.2% of total industry revenues. It is set to grow at a 6.6% CAGR through 2026 on the way to becoming a US$1 trillion market. The growth is fed largely by digital. Non-digital advertising, which is barely rising, is expected to decline after 2025. Over the five-year forecast period, global internet advertising revenue will expand at an impressive 9.1% CAGR to reach US$723.6 billion in 2026, at which point 74% of revenue will be mobile.
At a regional level, North America commands by far the highest E&M spend per capita, at US$2.229, nearly double Western Europe’s US$1.158. By contrast, Asia-Pacific, which was the largest E&M region by revenue in 2021, has per capita spend of only US$224. The Middle East and Africa have the lowest per capita E&M spend of any region globally, at US$82.