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The 2024 Media & Entertainment Industry Outlook explores key trends shaping the future, including the impact of digitalization, growth hotspots, and the evolving influence of gaming. It highlights the rise of OTT streaming services, the transformative power of generative AI, and the shifting landscape of advertising. This comprehensive outlook provides valuable insights into the industry's recalibration, projected growth rates, and the dynamic interplay between creativity and technology from 2024 to 2027.
In a world filled with uncertainty, everyone seeks entertainment as a source of escape. Entertainment and media (E&M) companies, however, face their own set of uncertainties. After experiencing robust growth of 10.6% in 2021 and a notable surge following the pandemic, the industry's growth pace is expected to slow down in the coming years. According to PwC, the annual growth rate is projected to decline steadily, leveling out at 2.8% by 2027, marking a recalibration in the industry.
The slowdown in the E&M industry stems from various factors, including the waning of initial revenue surges witnessed during the early pandemic. For instance, the podcast industry saw an 80% decline in content creation between 2020 and 2022. The predominant challenge in 2024 and beyond lies in consumer spending, which is hampered by inflation, pandemic fatigue, and global uncertainties.
Consumer spending on media and entertainment is projected to grow at a modest 2.4% compound annual growth rate (CAGR) between 2024 and 2027, resulting in a market size of $903.2 billion. As e-commerce and digital platform engagement rise, companies worldwide will intensify spending to connect with consumers during decision-making moments.
Despite slowdowns, advertising is set to become the clear leader. By 2025, advertising is projected to surpass consumer spending as the largest category in E&M, driven by robust 8.1% growth in internet ad spending in 2022. Advertising revenue is forecasted to rise from $763.7 billion to $952.6 billion globally over the period 2022–2027. This positions advertising to become the first E&M category to reach $1 trillion in annual revenue.
We will also witness a surge in digital content providers, intensifying competition in the already content-rich landscape. As a result, despite an increase in the time spent accessing entertainment and media content, consumer spending per capita in digital entertainment and media industries is expected to decrease, dropping from 0.53% of average personal income in 2023 to 0.45% by 2027.
As we navigate the aftermath of the COVID-19 era, the coming years promise to reveal the impact of post-pandemic consumer habits, with a notable hunger for offline experiences still present. One enduring trend stands out in the media industry — the ever-growing influence of gaming.
Over-the-top (OTT) streaming, a pivotal catalyst for industry growth, is experiencing rapid expansion in emerging markets, particularly in Indonesia. This surge is attributed to factors such as a historically underserved rural population, the proliferation of mobile broadband, and robust demand for local and sports content. In 2022, Indonesia boasted the highest consumption rate of OTT video in Southeast Asia, with approximately one in three Indonesians engaging with streaming services, resulting in remarkable 40% annual growth in hours watched.
Indonesia's streaming landscape is a battleground for global giants like Netflix, Amazon Prime, Disney+, Hotstar, and HBO Go, which face competition from a vibrant community of local and regional players such as WeTV, GoPlay, Mola TV, and Vidio. The nation's long-term growth outlook is fueled by infrastructure development, including the construction of a subsea cable to provide high-speed broadband access throughout the archipelago.
Indonesia, alongside China and India, stands out in Asia for its combination of existing market size and scale, coupled with anticipated rapid growth in consumer spending and advertising. While the US remains the largest E&M market, Indonesia is making significant strides, ranking as the 15th largest with $13 billion in annual revenue, rivaling countries like Brazil, Mexico, and Spain. The Indonesian market is poised for robust growth, with an expected 7.7% CAGR in overall revenue through 2027.
The entertainment and media industry, at the intersection of human creativity and technological prowess, has continually evolved with transformative technologies. The metaverse, once the talk of the town, is now evolving into a dynamic digital platform for gaming, entertainment, work, and commerce.
Today's narrative and potential for substantial growth revolve around the convergence of established and emerging technologies, with a spotlight on generative AI, particularly powered by advanced deep-learning models and neural networks. OpenAI's ChatGPT, launched in November 2022, became a game-changer, rapidly amassing 100 million users globally within two months. This new wave of generative AI, also embraced by tech giants like Google, Meta, Nvidia, and Baidu, holds immense promise for the entertainment and media industry.
Generative AI enhances productivity by automating tasks, streamlining content creation workflows, and opening doors to innovative content generation, from scripts and voiceovers to entire gaming worlds at a fraction of the traditional cost and timeline. However, as the use and sophistication of generative AI grow, the industry must confront challenges related to business models, privacy, intellectual property, security, environmental impact, and ethical considerations.
Within the realm of entertainment marketing trends, the evolution of streaming services stands out. Recent years have witnessed a remarkable surge in both the quantity and variety of streaming platforms. Projections suggest that streaming represents a fundamental shift in how we engage with entertainment, with anticipated annual streaming revenue surpassing $139 billion globally by 2027.
A distinctive trend in recent times is the ascent of niche streaming platforms, each designed to cater to specific interests, genres, or demographics. An exemplary case is Crunchyroll, a dedicated anime service that experienced significant growth during the pandemic, amassing over five million paying subscribers. Another notable instance is Disney+, which swiftly built a substantial subscriber base by leveraging its extensive back catalog and introducing new programming. These successes underscore rising demand for specialized content tailored to distinct tastes and preferences.
The gaming sector stands as a primary player in the entertainment industry globally, captivating audiences across all demographics, with a particular hold on youth. Games are evolving beyond mere entertainment, establishing themselves as a versatile medium for creativity, consumer spending, and advertising.
Total global gaming revenue is expected to grow from $227 billion in 2023 to a substantial $312 billion by 2027, marking a robust 7.9% CAGR. As confidence in the gaming sector grows, advertising revenue is set to nearly double between 2022 and 2027, reaching a noteworthy $100 billion milestone in 2025. This trajectory underscores gaming's escalating centrality to E&M experiences, evidenced by video games becoming primary source material for blockbuster films.
After a prolonged period of limitations on in-person experiences, live sectors are experiencing a resurgence and are poised to outperform the broader E&M industry. Taking into account all live event sub-sectors in the consumer space, a return to (and growth beyond) pre-pandemic E&M revenue levels is anticipated by 2024, with annual revenue reaching $68.7 billion—up from $66.6 billion in 2019. The growth trajectory for live experience revenue through 2027 is impressive, showcasing a 9.6% CAGR.
Cinema box office revenue is expected to reclaim pre-pandemic levels by 2025, reaching $43.0 billion, with a significant global climb in theater admissions each year. Esports has also witnessed a resurgence, with global ticket sales returning to pre-pandemic levels. This marks one of the fastest-growing sub-sectors in the E&M industry, with a projected five-year CAGR of 13.8%.
The immense viewership potential of live events, particularly in sports, contributes significantly to growth. The resurgence of live events signals a dynamic source of growth, shaping the future E&M industry landscape.
Social marketers are rapidly adopting AI, with organizations planning to double or even triple its use across various activities. However, a Hootsuite Social Media Consumer 2024 Survey indicates that audiences are not wholeheartedly embracing AI-generated content, with 62% of consumers expressing reluctance to engage with or trust content created by AI applications.
Generative AI, while a boon for busy professionals, comes with its challenges. Different generations exhibit varying levels of trust toward AI-generated content. In 2024, successful brands will redefine authenticity, focusing on the brand experience rather than exclusively human content creation.
Maintaining a presence on multiple social platforms has become a major challenge for brands, especially considering the constant evolution of each platform and the unique demands of diverse audiences. The average social media user logs into seven platforms each month, making it crucial for organizations to strategically choose platforms based on their return on investment (ROI).
In 2024, strategic organizations will focus on mastering a few key channels based on their ROI. Marketers are advised to conduct social media audits, evaluate platform ROI, and master proper cross-posting techniques to declutter their social platform mix.
Social media users prioritize entertainment, with the top reason for using social media being to unwind and be entertained. Despite this, brands often engage in self-promotion, creating a disconnect between what brands post and what users want to see. Over two-thirds of social media marketers report concern about the ROI of their social activities, primarily relying on engagement metrics.
In 2024, brands that prioritize entertaining content on social media will succeed in capturing audience attention and market share. The key is to provide content that offers enjoyment, inspiration, excitement, or learning.
Advertising is experiencing significant growth and is poised to become the first E&M category to approach a remarkable $1 trillion valuation. Free ad-supported streaming TV (FAST) services have emerged as key players in targeted advertising. Streaming giant Netflix, which abstained from advertising for its first 25 years, introduced an ad-supported tier in 2022 in specific regions. By May 2023, Netflix reported nearly five million subscribers for its ad-tier service.
The media and entertainment industry is in the midst of a recalibration, shifting from stellar 10.6% growth in 2021 to a stabilizing 2.8% by 2027. Despite this, digitization continues to propel the industry forward, shaping a dynamic future. Key trends such as the ascent of advertising, the influence of gaming, the surge in OTT consumption, and the transformative power of generative AI define an industry at the intersection of creativity and technology.
As we fast-forward to the future, Intellias stands ready as your dynamic technology partner, offering a comprehensive suite of services to navigate the evolving tech terrain. Whether you require OTT platform development, intelligent AdTech services, top-notch media solutions, or IoT-based innovations, we’re here to ensure you stay at the forefront of innovation. Contact Intellias now and fast-forward to your future in media and entertainment. Let’s shape tomorrow’s experiences today.
For questions or comments write to writers@bostonbrandmedia.com
Source: Intellias
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