NEW YORK—Building on strong growth in 2021, when global media and entertainment revenues increased by 10.4% to $2.3 trillion, PwC is predicting further growth in many areas between 2022 and 2026, with OTT revenue growing 7.6% a year to $114.1 billion by 2026 while traditional TV continues to decline, dropping 0.8% a year to $222.1 billion.
The new PwC data showed that OTT video surged another 22.8% in 2021, pushing global revenues to $79.1 billion last year. After that, however, the pace of OTT revenue growth will moderate somewhat; it is expected to grow at a 7.6% CAGR through 2026, pushing revenues to $114.1 billion.
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 $231 billion in 2021 to $222.1 billion in 2026, PwC is predicting.
These are findings are from PwC’s "Global Entertainment & Media Outlook 2022-2026", the 23rd annual analysis and forecast of M&E spending by consumers and advertisers across 52 countries and territories.
The report also predicts that the growth of content on digital platforms is fueling massive data consumption, with 2.6 million petabytes (PB) of data consumed in 2021. That consumption is expected to rise at a 26% CAGR to reach 8.1 million PB by 2026.
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 1.1 million PB to 3.8 million PB.
The report also predicts that global video games and esports revenue totaled $215.6 billion in 2021 and is forecast to grow at a 8.5% CAGR to $323.5 billion in 2026. Asia Pacific generated the lion’s share of revenues in 2021 with $109.4 billion, almost double North America, the second highest region. Gaming is now the third-largest data-consuming E&M content category, behind video and communications.
VR continues to be the fastest-growing M&E segment, albeit from a relatively small base.
Global VR spend rose by 36% y-o-y in 2021 to $2.6 billion, following on the hot 39% growth in 2020. Growth between 2021 and 2026 is expected at 24% CAGR, bringing the segment to $7.6 billion. Gaming content is the primary contributor to VR revenue, taking in $1.9 billion in 2021. This should increase to $6.5 billion 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 $747.2 billion.
Driven almost entirely by digital, advertising is set to grow at a 6.6% CAGR through 2026. Internet advertising revenue is seen growing even faster, expanding at 9.1% CAGR. In 2026, advertising is projected to be a $1 trillion market and the largest M&E revenue stream, having surpassed consumer spending and internet access.
PwC also found that global cinema revenue is bouncing back, reversing its pandemic-driven losses, and is expected to reach a new high of $46.4 billion in 2023. Box office revenue is projected to reach $49.4 billion in 2026 from $20.8 billion in 2021, an 18.9% CAGR. China surpassed the U.S. to become the world’s biggest cinema market in 2020, and is expected to retain this leadership through 2026.
Digital music- streaming subscriptions are driving growth in the recorded music sector where revenues are forecast to rise from $36.1 billion in 2021 to $45.8 billion in 2026
At a regional level, North America commands by far the highest E&M spend per capita, at $2,229, nearly double Western Europe’s $1,158.
By contrast, Asia Pacific, which was the largest M&E region by revenue in 2021 at $844.7 billion, has per capita spend of $224. The Middle East and Africa have the lowest per capita M&E spend of any region globally, at $82.
The top ten growth markets by CAGR, meanwhile, are focused in Latin America, Middle East, Africa and Asia, with OTT video and gaming providing the majority of revenue growth, and esports and cinema seeing fast growth as well. Turkey (estimated 14.2% CAGR), Argentina (10.4%), India (9.1%) and Nigeria (8.8%) are top-ranked for E&M consumer spend growth prospects over the five year forecast period.
