The entertainment and media industries experienced a slowdown in growth in 2022, with total global revenue rising 5.4% compared to the previous year. This deceleration can be attributed to the lingering effects of the Covid-19 pandemic and sluggish consumer spending. Companies in the industry are now focusing on finding new opportunities for growth, particularly in geographical and sectoral hotspots, and exploring the use of generative AI as a tool for productivity. Advertising is expected to become the largest category in the industry, surpassing consumer spending, and internet access will also play a significant role. As the industry becomes more digital, production and distribution costs are decreasing, but competition among providers is increasing. Despite the challenges, the industry is expected to continue growing in the coming years, with live events, gaming, and emerging technologies like AI driving innovation and revenue.
| Signal | Change | 10y horizon | Driving force |
|---|---|---|---|
| Slowing growth in entertainment and media revenue | Decline in revenue growth rate | Revenue growth rate continues to decline | Sluggish consumer spending |
| Shift from consumer spending to advertising revenue | Change in revenue composition | Advertising revenue surpasses consumer spending | Growth of e-commerce and digital platforms |
| Decrease in consumer spending per capita on E&M | Decrease in consumer spending on E&M | Consumer spending on E&M decreases | Inflation, pandemic effects, geopolitical instability |
| Rise of generative AI in the creative process | Adoption of generative AI for productivity | Increased use of generative AI in creative process | Desire to recharge growth, explore new technologies |
| Increasing competition and fragmentation in digital advertising | Growth of digital advertising market | Greater competition in digital advertising market | Expansion of e-commerce and digital platforms |
| Declining costs of production and distribution | Decrease in production and distribution costs | Lower production and distribution costs | Shift to digital and competition among providers |
| Increased focus on efficiency and profitability | Shift towards efficiency and profitability | Companies focus on efficiency and profitability | Resetting expectations and focus on profitability |
| Growth of live sectors in the entertainment industry | Growth of live sectors and outperformance | Live sectors outperform industry as a whole | Return to in-person experiences |
| Rise of gaming as a powerhouse in the industry | Growth and monetization of the gaming sector | Gaming revenue and advertising revenue increase | Rising popularity and creativity in gaming |
| Convergence of existing and emerging technologies | Integration of AI and generative AI in the industry | Increased use of AI and generative AI in industry | Desire to improve productivity and create new content |
| Increased focus on data privacy and regulation | Strengthening of data privacy regulations | Efforts to protect data privacy and regulate AI | Concerns over data privacy and ethics |
| Shift in deal activity and consolidation | Shift towards efficiency and scale | Deals focus on efficiency and gaining scale | Need to build efficiency and scale |
| Uncertainty and tensions driven by new technologies | Challenges and opportunities from new technologies | Need for innovative thinking and creative solutions | Evolving consumer behavior and regulatory environment |