Forecast Analysis for Globally Operating Entertainment and Media Industries
Global Entertainment and Media Industry Set for Rapid Growth, Driven by AI and Advertising
The entertainment and media (E&M) industry is poised for significant growth over the next five years, according to PwC's Annual Global Entertainment & Media Outlook 2025-29. The industry is projected to reach $3.5 trillion in revenue by 2029, growing at a compound annual growth rate (CAGR) of 3.7%.
Among the key drivers of this growth is advertising, which is expected to be the strongest performer among E&M segments. AI-driven advertising is central to this growth, with digital ad formats forecast to account for 80% of total ad revenue by 2029.
Connected TV (CTV) ad revenues, influenced strongly by AI-assisted personalization, are expected to grow significantly, reaching $51 billion by 2029 and representing 45% of traditional TV advertising revenue. AI powering hyper-personalization tailors content and ads to individual consumer preferences, driving engagement and higher ad yields.
High growth areas in advertising include retail search advertising in e-shopping (forecasted to rise from 32.7% in 2020 to 45.5% in 2029) and advertising in video games (forecasted to rise from 32.8% in 2024 to 38.5% in 2029).
While the consumer sector (paid or subscription products) is expected to grow more slowly, non-digital formats still dominate consumer spending, making up 61% in 2024 and expected to remain a majority by 2029. Consumers' preferences are shifting toward locally produced films, with the top five US studios' market share dropping from over 60% before the pandemic to 51% in 2024.
Global cinema box office spending is projected to rise from $33 billion in 2024 to $41.5 billion in 2029. The global video gaming industry is expected to grow to nearly $300 billion in 2029 at a CAGR of 5.7%.
Economic uncertainty and anaemic consumer spending growth, along with heightened domestic and international competition in the industry, are expected to weigh on E&M growth rates through the forecast period until 2029.
Connectivity remains the largest category, with spending reaching $1.3 trillion in 2029, growing at a CAGR of 2.8%. Retail advertising, social and mobile on-stream video advertising, and connected TV in-stream internet advertising are forecasted to grow at rates of 15%, 15%, and 14% respectively from 2024 to 2029.
In summary, AI is transforming advertising delivery models, democratizing content production, and reducing market entry barriers in entertainment and media. The industry's growth is expected to be driven by AI-powered hyper-personalization, digital ad formats, and significant growth in areas such as CTV ad revenues and gaming advertising.
- The European Union (EU) might find profit opportunities in the tech sector, considering the rapid growth forecasted in the business sector, especially in AI-driven advertising and digital ad formats, which are expected to account for 80% of total ad revenue by 2029.
- As the global tech and finance industries continue to evolve, Cyprus, with its strategic location and supportive business environment, could attract greater investments in tech businesses, particularly those focusing on AI technologies and fintech, given the rapid growth expected in the entertainment and media industry.
- The growth in the tech-driven entertainment and media industry, primarily driven by AI, AI-powered hyper-personalization, and digital advertising, presents opportunities for innovative technologies to break through traditional business models in various segments, such as video games advertising.
- AI and technology have become essential aspects in the entertainment and media industry, especially in advertising, likely result in an increased portfolio diversification for finance investors, as they seek to capitalize on promising areas for growth, such as connected TV or retail search advertising in e-shopping.
