Global entertainment & media revenues surge to $2.3 trillion; virtual reality sees 36% growth as gaming and esports are on pace to become a $324 billion business: PwC

The global entertainment & media (E&M) industry surged ahead last year, strongly outpacing overall global economic growth.  Following a pandemic-related 2.3% decline in 2020, E&M revenue rose a strong 10.4% in 2021, from US$2.12trn to US$2.34trn.  With the industry becoming more digital, more mobile and more youth-oriented, virtual reality (VR) and gaming are powerful growth drivers, while digital advertising permeates all of the industry. These are findings from PwC’s Global Entertainment & Media Outlook 2022-2026, the 23rd annual analysis and forecast of E&M spending by consumers and advertisers across 52 countries and territories.

Findings in this year’s Outlook include:

• Global video games and esports revenue totaled US$215.6bn in 2021 and is forecast to grow at a 8.5% CAGR to US$323.5bn in 2026. Gaming is now the third-largest data-consuming E&M content category, behind video and communications.

• VR continues to be the fastest-growing E&M segment, albeit from a relatively small base.    Gaming content is the primary contributor to VR revenue, taking in US$1.9bn in 2021. This should increase to US$6.5bn in 2026, 85% of total VR revenue.

• Advertising’s spread throughout the digital world has made it a dominant industry category.  After a decline of nearly 7% in 2020, advertising grew an impressive 22.6% in 2021 to US$747.2bn. Internet advertising revenue is seen growing even faster, expanding at 9.1% CAGR.  In 2026, advertising is projected to be a $1tn market and the largest E&M revenue stream, having surpassed consumer spending and internet access.

•  After growing by 35.4% in 2020, Over-the-top (OTT) video surged another 22.8% in 2021, pushing revenues to US$79.1bn. 

• Traditional TV, beset by competition from OTT streaming services, still generates considerable revenues, but its inexorable decline will continue, with global revenues projected to shrink at a -0.8% CAGR from US$231bn in 2021 to US$222.1bn in 2026. 

• Global cinema revenue is bouncing back, reversing its pandemic-driven losses, and is expected to reach a new high of US$46.4bn in 2023. China surpassed the US to become the world’s biggest cinema market in 2020, and is expected to retain this leadership through 2026.

• Live music revenue is projected to exceed pre-pandemic levels in 2024. Digital music- streaming subscriptions are driving growth in the recorded music sector where revenues are forecast to rise from US$36.1bn in 2021 to US$45.8bn in 2026

• The growth of content is fueling massive data consumption – 2.6mn petabytes (PB) of data were consumed in 2021. Gaming will be the fastest-growing data consumer over the forecast period, with a 29.6% CAGR expected. Mobile handsets will be the fastest-growing device category between 2021 and 2026, increasing at a 28.8% CAGR and expected to push mobile data consumption up from 1.1mn PB to 3.8mn PB.

The metaverse awaits

In the not-too-distant future the metaverse could become a stunningly realistic world where individuals access immersive virtual experiences, through a VR headset or other connecting device. Because the metaverse is an evolution that may profoundly change how businesses and consumers interact with products, services and each other, its potential financial and economic value goes far beyond VR. In time, much of the revenues associated with video games, music performances, advertising and even e-commerce could migrate into the metaverse.

About the Global Entertainment & Media Outlook 2022-2026

The PwC Global Entertainment & Media Outlook, with the accompanying publication, “Fault Lines and Fractures: Innovation and Growth in a New Competitive Landscape,” provides in-depth analysis of global E&M consumer and advertising spending.  The Outlook includes five-year historical and five-year forecast data and commentary for 16 industry segments across 52 territories.  Segments include advertising (TV, internet, out-of-home); books; business-to-business; cinema; data consumption; internet access; music, radio and podcasts; newspapers and consumer magazines; OTT video; TV and home video; as well as Metaverse and NFT included for the first time this year.

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