The Global Entertainment & Media Perspectives: Industry Review 2024
04 December 2023
In 2022, global entertainment and media revenue grew by 5.4% to reach US$2.32 trillion. In 2023, Meta coined it ‘the year of efficiency,’ as major players reduced their workforce, resulting in over 168,000 job cuts in the tech sector during the first four months. Netflix cracked down on password sharing, and content spending by leading streamers, including Netflix, Apple TV+, Amazon Prime, Paramount+, Disney+, and Max, is projected to rise from US$23.2 billion in 2022 to US$26.5 billion in 2023, a 14% increase. Warner Bros. Discovery canceled films like Batgirl and closed CNN+ shortly after its launch, highlighting the industry’s rapid changes. We can conclude that sluggish consumer spending is compelling companies to reevaluate their expectations and look for internal growth opportunities.
General insight into the market
In the realm of individual segment market sizes as a percentage of the worldwide revenue in the Entertainment and Media industry, OTT video is set to experience substantial growth, increasing from 2.2% in 2019 to 3.5% globally by 2024. The APAC region, in particular, is poised for an even more remarkable ascent, with OTT video expanding from 2.4% in 2019 to 5.2% in 2024. Additionally, the video games and esports sector will steadily rise, climbing from 6.1% in 2019 to 7.3% by 2024 globally. Meanwhile, VR forecasts show modest growth, from 0.1% in 2019 to 0.2% in 2024, indicating its gradual expansion over these five years.
Within the landscape of segment-based growth, OTT maintains its commanding position, with Internet advertising following in its footsteps. According to the data of PwC Global Entertainment & Media Outlook (2020-2024), the projected growth rates for various segments are as follows: OTT video at 13.4%, OOH at 3.3%, video game and esports at 6.5%, Internet advertising at 4.7%, and VR expected to experience a remarkable surge of 24.9% over the same period.
Let’s also keep a keen eye on the burgeoning consumer entertainment markets in the dynamic APAC region, where the Compound Annual Growth Rate (CAGR) from 2019 to 2024 showcases impressive figures: India at 8.8%, the Philippines at 5.8%, and Pakistan at 5.4%.
Predictions of Entertainment & Media Trends for 2024
The advertising industry is rapidly evolving, with digital advertising taking the lead, while challenges arise due to the decline of cookies and third-party data. Podcasts thrive as an advertising channel, and 5G and generative AI influence the tech and entertainment landscape. Advertisers’ adaptability is critical to success in the changing landscape.
Transformation in the Global Advertising Industry
The advertising industry is experiencing a significant surge in prominence. Notably, it is poised to become the first category to approach the monumental milestone of US$1 trillion. In the United States, the largest traditional TV market anticipates a pivotal moment in 2023 when projected advertising spending will exceed the revenue generated from cable and other subscription services. Meanwhile, in Australia and the UK, this transformation has already occurred.
Over the next five years, revenue from ad-supported video on demand is set to nearly double, marking a substantial growth trajectory. The streaming industry has transitioned from a model that initially promised ad-free viewing for its subscribers to one that heavily relies on advertising as a fundamental source of revenue. Remarkably, consumers are becoming increasingly amenable to the presence of advertising within streaming products.
Indonesia, along with its Asian neighbors China and India, presents a compelling synergy of substantial market size and the promise of swift growth in consumer spending and advertising. In China, the second-largest market in Entertainment and Media, the outlook is impressive, with total revenue set to escalate from US$226 billion to US$305 billion during 2020 – 2024, reflecting a robust 6.1% CAGR. This growth trajectory surpasses that of the United States, more than doubling it. A 9.1% CAGR in internet advertising revenue will propel China’s ascent.
With its impressive revenue of US$13 billion, Indonesia has secured its rank as the 15th largest market globally, a position that rivals nations like Brazil, Mexico, and Spain. It is worth anticipating that Indonesia’s overall revenue will continue to follow an upward trajectory, with an expected CAGR growth rate of 7.7% through 2027.
In 2019, the digital advertising market surpassed traditional advertising revenue, marking a significant milestone. Furthermore, the onset of the COVID-19 pandemic acted as a catalyst, propelling the adoption of OTT platforms to new heights. Notably, the global Subscription Video-on-demand (SVOD) revenue triumphed over box office spending in 2020, marking a pivotal shift in how audiences consume content.
Gaming Rise and the Streaming Revolution
In the upcoming years, the games category aims to ascend and take the third-largest consumer of data position by 2024, as the PwC Global Entertainment & Media Outlook: 2020-2024 projects. This thriving sector captivates audiences across all age groups, particularly emphasizing the youth demographic. Games are emerging as a powerful medium for creative expression, increased consumer spending, and a thriving avenue for advertising. Anticipating remarkable growth, experts expect the total gaming revenue to surge from US$227 billion in 2023 to an impressive US$312 billion by 2027, reflecting a CAGR of 7.9%. With mounting confidence in the gaming industry, advertising revenue is on the verge of doubling between 2022 and 2027, reaching the significant milestone of US$100 billion in 2025.
When we delve into Connected TV, a noteworthy transition occurred in the summer of 2022. Streaming overtook cable media consumption in the United States, claiming a 34.8% share compared to cable’s 34.4%. However, it’s intriguing that connected TV (CTV) represented only a 12% share of political ad spending in 2022, while cable held a more significant share at 20%.
As we look ahead to 2024, it’s clear that the momentum toward streaming will continue, with audiences increasingly moving away from traditional TV. Notably, CTV presents a more intricate ecosystem than cable, with approximately 100 different vendors in the media landscape selling streaming inventory. As a result, media entertainment sector teams should embark on thorough vetting processes to understand the demographics associated with each vendor before making any definitive commitments.
Advertising Change on Social Media
Mobile video consumption and social media will propel the mobile display to surpass wired Internet advertising in 2022. Meta and Google are the old guards of digital media. Both platforms have radically changed how they approach political and social issue advertising since 2018, and even in 2023, we are still reeling with the impacts of limited targeting, advertising blackouts, and changing disclaimer rules.
There are several examples of emerging and changing platforms:
- TikTok is the US’s fourth-largest social media platform and will keep growing. TikTok prohibits political and issue-based advertising.
- After 2020, Hulu decided to ban political and issue ads. But after Disney’s takeover and a social media campaign from Democrats, Hulu reversed its decision and began allowing political ads again in late 2022.
- Spotify banned political and issue ads in 2020 only to allow them back in 2022, but with more limitations.
- One of the most significant changes Twitter’s new ownership instituted was lifting the ban on political advertising and making social-issue advertising much easier for groups.
Podcasts have exhibited remarkable resilience throughout the challenges posed by COVID-19, with continuous growth in monthly listenership and a steadfast climb in advertising revenue. By 2024, the global podcast advertising revenue is forecasted to surge to an impressive 3.5 billion USD, accompanied by an increase in monthly listeners, surpassing 1.6 billion users.
Notably, an increasing number of brands and businesses recognize the potential of podcasts as a vital channel for conveying their message, transcending their conventional advertising avenues such as Out-of-Home. In a broader context, experts anticipate the combined segment of music, radio, and podcasts to experience robust growth, with a 2.8% upswing in the global market between 2019 and 2024. Remarkably, this segment emerges as a top-4 contender, boasting one of the highest Compound Annual Growth Rates (CAGR) among others.
Furthermore, it’s worth underscoring that the music, radio, and podcasts segment is poised to yield substantial revenue, anticipated to reach 120 billion USD globally by 2024. This is a testament to market audio advertising content’s enduring influence and appeal.
AI’s Impact on Media and Entertainment
5G will become more accessible; by 2025, almost half, 45% of the world will be covered by it, connecting more than 1.7bn devices. The development of Internet technologies also gives impetus to the development of other areas of digital. The driving force behind the growth of technology, entertainment, and media is generative AI. It harnesses the power of neural networks, cutting-edge deep-learning models, and various other AI technologies to craft entirely new synthetic creations. These can range from whimsical limericks to captivating screenplays and informative memos. A new wave of generative AI has emerged, with OpenAI’s ChatGPT leading the charge. Launched in November 2022 and bolstered by Microsoft’s support, ChatGPT quickly became a global sensation, boasting 100 million users within two months.
This wave was soon joined by Google’s Bard, adding further momentum to the generative AI landscape. Meanwhile, tech giants like Meta, Nvidia, and Baidu are actively promoting the growth and expansion of the AI sector. The emergence of generative AI, spearheaded by innovators and industry leaders, is shaping the future of technology and entertainment, and it promises to bring about transformative creative possibilities.
Adapting to the Post-Cookie Era
We find ourselves on a steady journey toward the eventual demise of cookies and, consequently, third-party data. This shift became evident with the release of iOS 14 in 2020, as advertisers lost the once-precise tracking and optimization capabilities for conversions. As Google plans to phase out cross-site tracking towards the end of 2024, the landscape will pose even more significant challenges in identifying and targeting specific audiences. In the face of these transformative changes, how advertisers adapt will be a pivotal gauge of their success in 2024 and beyond.
While tracking has become increasingly challenging, the crux of success lies in engaging individuals at the crucial moment of decision rather than merely at the point of purchase. In this evolving environment, a race is underway to discover innovative means of delivering personalized and precisely targeted advertising, messaging, and content to consumers while preserving their anonymity.
A significant portion of these efforts revolves around establishing “clean rooms.” These secure data storage and processing environments serve as a haven where users’ personally identifiable information undergoes adequate anonymization. These clean rooms are pivotal in balancing personalization with privacy, ushering in a new era of responsible and respectful consumer engagement.
Summary of Findings
In previous years, the industry grew but also faced challenges like job cuts and content spending shifts. Key trends include the rise of digital advertising, the flourishing podcast industry, and the impact of 5G and generative AI. The advertising industry is transforming, particularly in regions like the United States, Australia, and the UK.
Significant markets are emerging in China and Indonesia, and the gaming sector is on the cusp of substantial growth. Connected TV surpasses traditional cable consumption, and the shift towards streaming will continue. Advertisers are adapting to changes in social media platforms’ advertising policies.
Podcasts are thriving, and AI, especially generative AI, is shaping the industry’s future. The post-cookie era is challenging advertisers to find new ways to engage consumers while preserving their privacy. Overall, the industry is marked by growth, innovation, and adaptability, making it crucial for companies to navigate these dynamic trends successfully.
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