US Edition: Global Entertainment & Media Outlook 2023

Resetting expectations, refocusing inward and recharging growth

For the entertainment and media industries, 2022 marked an important inflection point. PwC’s 24th annual Global Entertainment & Media Outlook offers an in-depth, five-year forecast of evolving forces that will likely shape an industry on track to be a $2.9 trillion market by 2027. Here’s a snapshot of what we found.

The next E&M era

US E&M sector revenue is expected to increase over the next five years, and we’ll see particularly strong growth in certain key segments. Change, however, remains the one constant for E&M companies. While participants in these markets have always had to be nimble and resilient to changes, the stakes are definitely rising.

As we look ahead, evolving consumer behavior, a shifting regulatory environment, and disruptions posed by new technologies will create new tensions and open up new possibilities: studios and streaming players, for example, are shifting their viewpoint on revenue; the ad campaign experience will continue to innovate; the video game industry is expected to bounce back with new tech; AI will continue to unfold vast possibilities, and new challenges.

Whatever pathways open up, the imperative will be to lean into innovative thinking. The entertainment and media industry has always been, at root, a creative endeavor. And in the coming years, armed with powerful technology, leaders will have to be more creative about how they create, distribute and monetise products and services.

Segment highlights

The US remains the focal market of the global streaming wars with revenue of US$49.4bn in 2022. By the end of the forecast period in 2027 the US will reach US$75.5bn – more than threefold growth in a decade – dwarfing the next-biggest market, China, at US$25.9bn. However, the US OTT market overall has seen a seismic shift, as years of breakneck subscriber growth supercharged by the COVID-19 pandemic has slowed. The forecast period highlights the increasing saturation of the US market and the future commercial challenges that pose for pure-play OTT and traditional cable and TV companies in the sector. As a result, there will be a new era with a focus on return on investment and profitable business models.

Though growth will slow over the next five years, the US will continue to retain its position as the largest global advertising market, reaching US$271.7bn by 2027. Internet advertising is expected to evolve over the next ten years into a broader category of Web 3.0 and “metaverse advertising,” which will encompass online 3D advertising, VR advertising and perhaps other IOT advertising channels and spaces, along with new ad formats such as branded NFTs. Generative AI technology also has the potential to disrupt the Internet advertising sector overall, evolving the consumer paths of discovery, and impacting commerce and engagement with content. Brands, agencies, ad tech firms and publishers who are able to capitalize on these growing trends will see improved margins and increased market share.

The composition of the video games market in the US typifies that of a modern Western nation, with a rapidly growing social and casual gaming sector and a robust traditional gaming sector that exhibits slower overall growth as it transitions away from physical media to digital sales and microtransactions. The largest generator of social and casual revenue in the US is in-app games advertising, having surpassed app-based social and casual gaming in 2022.

Although technology’s biggest players remain committed to the metaverse, they are showing more restraint in terms of their strategy, investment priorities and how they position the metaverse as a commercial proposition. Many are now reassessing their direction, with expensive hardware projects under scrutiny and significant cutbacks affecting metaverse operations. Despite these short-term challenges, however, the metaverse industry is gaining development traction, and for businesses, the implications of an immersive, persistent and decentralized digital world could be enormous.

Total music, radio and podcast revenue in the US was worth US$49.4bn in 2022, an increase of 17.2% on the previous year’s US$42.1bn. Revenue is forecast to rise at a 2.5% CAGR to total US$55.8bn in 2027. The growth vehicle to watch in this segment, however, is the hidden power of spoken word audio. The US is home to the largest podcast advertising market globally, with the number of monthly listeners rising by 7.1% in 2022 to reach 157mn. Over the next five years, the listener base will increase at a 3.3% CAGR to reach 185mn in 2027.

Discover the Outlook data tool

Understanding where consumers and advertisers are spending money in the E&M industry can help inform important business decisions.

PwC’s Global Entertainment & Media Outlook provides a single comparable source of consumer and advertiser spending data and analysis. Updated annually, the intuitive online tool allows you to easily browse, compare and contrast spending and growth rates.

Take a tour of the Outlook data tool

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