The global media industry, spurred by advertising and digital, is expected to hit $2.8 trillion in 2027, according to entertainment and media (E&M) industry forecasts by PwC.
And advertising revenue is predicted to approach $1 trillion in 2027, becoming become the largest sector, even as consumer spending loses steam and the competitive landscape shifts
While advertising dollars are growing, they’re getting spread more thinly as more market players – including e-commerce sites, video games and streaming platforms – take market share from large social media and search platform incumbents, says PwC.
The entertainment and media industry has seen impressive growth over the past two years following a surge in demand for digital products during COVID-19.
“However, macroeconomic challenges, increased industry competition, and a reduction in production costs – particularly in digital services and experiences – have reduced revenues and consumers’ willingness-to-pay,” says Werner Ballhaus, Global Entertainment & Media Industry Leader, PwC Germany.
“If companies in the EM industry are to successfully engage consumers and drive growth, they need to transform their service-offerings and tap into new and emerging markets and technologies, such as Asia and generative AI.”
Macroeconomic pressures, geopolitical instability and inflationary challenges hit consumers hard in 2022, pushing companies to reset expectations, refocus inward and seek new ways to drive growth in 2023 and beyond.
Consumer spending on E&M products and services is expected to grow at just a 2.4% compounded annual growth rate between 2022 and 2027.
Sliding growth was among the factors that have put an end to a long-term boom in deal activity in the E&M market globally, both for mergers and acquisitions and venture capital.
Ballhaus says increased reliance on mobile and digital technologies, heightened industry competition, an evolving regulatory environment, and disruptions posed by new and emerging technologies will create new tensions and possibilities in the years ahead for the sector.
“If companies are to retain market share and drive growth, industry leaders will have to be more creative about how they create, distribute and monetise products and services, while remaining cognisant of an evolving global regulatory and geopolitical environment increasingly conscious of data privacy.”
Have something to say on this? Share your views in the comments section below. Or if you have a news story or tip-off, drop us a line at adnews@yaffa.com.au
Sign up to the AdNews newsletter, like us on Facebook or follow us on Twitter for breaking stories and campaigns throughout the day.