In 2022, the global entertainment and media (E&M) industry saw revenue rise by 5.4% to $2.32 trillion, a significant slowdown from 2021’s 10.6% growth. This trend is expected to continue, with growth projected to decline to 2.8% by 2027 due to sluggish consumer spending driven by inflation and geopolitical instability. Companies are increasingly focusing on advertising, predicted to surpass consumer spending by 2025. The rise of generative AI is reshaping content creation and advertising strategies, while digital platforms dominate the market. Despite challenges, sectors like gaming, live events, and ad-supported streaming are poised for growth. Companies must adapt their business models amid changing consumer behaviors and regulatory landscapes, emphasizing efficiency and innovation in a competitive environment.
| name | description | change | 10-year | driving-force | relevancy |
|---|---|---|---|---|---|
| Declining Consumer Spending | Consumer spending on entertainment and media is projected to grow at a lower rate than before. | Shifting from high consumer spending growth to a slower rate due to inflation and pandemic effects. | Consumer spending may decrease as a share of overall spending, impacting industry revenues significantly. | Consumer fatigue from inflation and pandemic recovery is leading to a pullback in spending. | 5 |
| Rise of Digital Advertising | Digital advertising is expected to surpass consumer spending as the largest revenue category by 2025. | Transitioning from traditional consumer spending dominance to advertising-led revenue growth. | Advertising may dominate revenue streams and reshape how companies strategize their growth. | Shifts in consumer behavior towards digital platforms and increased competition for attention. | 5 |
| Generative AI Integration | Generative AI is rapidly being adopted as a key tool in content creation and advertising. | Moving from traditional content creation methods to AI-driven automated processes. | Content production could become significantly faster and cheaper, altering industry dynamics. | The need for efficiency and cost reduction in content creation amidst rising competition. | 5 |
| Emergence of Free Ad-Supported Streaming (FAST) | FAST services are gaining popularity as viewers accept advertising in streaming content. | Shift from subscription-based models to ad-supported streaming due to audience acceptance. | Ad-supported models may dominate the streaming industry, significantly altering revenue structures. | Consumer acceptance of ads in exchange for free content is reshaping monetization strategies. | 4 |
| Growth of Gaming as a Central Entertainment Medium | Gaming revenue is projected to see significant growth and influence across entertainment sectors. | From traditional media reliance to gaming becoming a pivotal source of creative content. | Gaming may become the leading revenue generator in entertainment, influencing various media formats. | Increased engagement and spending on gaming, especially among younger demographics. | 5 |
| Increased Competition in Digital Advertising | The share of digital advertising revenue is becoming more fragmented among various players. | Transitioning from a duopoly of major players to a more diverse range of competitors. | The landscape of digital advertising may diversify, impacting how brands approach marketing. | Emerging platforms and services are capturing market share previously held by giants. | 4 |
| Regulatory Changes Impacting Digital Businesses | New regulations on data privacy and AI are shaping the operational landscape for digital firms. | From a lenient regulatory environment to stricter controls on data usage and AI applications. | Regulatory compliance may drive innovation and operational changes within digital industries. | Growing concern over data privacy and security is prompting governments to act. | 5 |
| name | description | relevancy |
|---|---|---|
| Consumer Spending Decline | A significant drop in consumer spending due to inflation and economic pressures may negatively impact the entertainment and media industry’s growth. | 5 |
| Generative AI Challenges | The rapid emergence of generative AI poses risks to traditional artists, content creators, and the integrity of artistic work due to potential copyright issues. | 4 |
| Digital Advertising Saturation | Increased competition in digital advertising may lead to a market saturated with players, making it harder for companies to secure ad revenue. | 4 |
| Failure of Business Models | Many media and entertainment companies risk their existing business models becoming non-viable due to changing consumer behaviors and market dynamics. | 5 |
| Regulatory Pressures | Stricter regulations on AI usage, privacy, and advertising could hamper innovation and operational efficiency within the industry. | 4 |
| Geopolitical Instability | Geopolitical tensions and shifting regulatory environments may adversely affect market dynamics, particularly for global digital platforms. | 4 |
| Content Quality Issues | Generative AI’s outputs may lack accuracy or quality, potentially impacting consumer trust and engagement with E&M content. | 3 |
| Job Losses and Industry Restructuring | Widespread layoffs in the tech and entertainment sectors could lead to loss of talent and innovation stagnation within the industry. | 4 |
| Digital Market Imbalance | The growth in e-commerce may outpace consumer spending, creating challenges for traditional media and entertainment sectors. | 3 |
| Sustainability Concerns from Digital Growth | Increased digitalization may lead to environmental concerns regarding energy consumption and e-waste from technology advancements. | 3 |
| name | description | relevancy |
|---|---|---|
| Shift to Advertising Revenue | With consumer spending declining, advertising is becoming the dominant revenue source for E&M, expected to exceed $1 trillion soon. | 5 |
| Generative AI Adoption | Companies are increasingly leveraging generative AI to enhance productivity and creativity in content production. | 5 |
| Rise of Free Ad-Supported Streaming | Ad-supported streaming services are gaining traction as consumers accept ads in exchange for free content. | 4 |
| Increased Competition in Digital Advertising | More players are entering the digital advertising space, spreading ad dollars more thinly among various platforms. | 4 |
| Focus on Profitability | Companies are shifting focus from aggressive growth strategies to profitability and capital discipline. | 5 |
| Live Events Comeback | Live events, including concerts and esports, are experiencing significant revenue growth post-pandemic. | 4 |
| Anonymized Data Techniques | Businesses are exploring new methods to personalize advertising without compromising user privacy amid stricter regulations. | 4 |
| Emerging Markets Streaming Growth | OTT streaming is rapidly expanding in emerging markets, driven by mobile broadband and local content demand. | 4 |
| Gaming as a Central E&M Medium | The gaming sector is becoming increasingly influential in the E&M industry, with significant revenue and content crossover. | 5 |
| Regulatory Responses to AI | Governments are beginning to implement regulations around AI usage, data privacy, and content rights. | 4 |
| name | description | relevancy |
|---|---|---|
| Generative AI | Use of neural networks to produce novel synthetic outputs, enhancing productivity in content creation. | 5 |
| Free Ad-Supported Streaming TV (FAST) Services | Digital networks of curated channels for targeted advertising, gaining popularity among younger audiences. | 4 |
| Over-the-Top (OTT) Streaming | Streaming services expanding in emerging markets, leveraging mobile broadband and local content demand. | 4 |
| Anonymized Data Techniques | Methods like data masking and pseudonymisation to personalise advertising while ensuring user privacy. | 3 |
| 5G Technology | Next-gen mobile technology to enhance connectivity, expected to surpass 4G penetration in 2025. | 4 |
| Virtual Reality (VR) Developments | Advancements in VR technology that may boost growth in immersive experiences and events. | 4 |
| name | description | relevancy |
|---|---|---|
| Declining Consumer Spending | Consumer spending on entertainment and media is projected to grow at a slower rate due to inflation and economic uncertainties. | 5 |
| Generative AI Integration | The rise and integration of generative AI in content creation and digital advertising poses significant challenges and opportunities for businesses. | 5 |
| Shift in Advertising Revenue | Advertising revenue is set to surpass consumer spending, indicating a major shift in revenue generation strategies within the entertainment and media sector. | 4 |
| Regulatory Challenges for AI | Growing regulations and privacy concerns surrounding AI technologies will impact how companies operate and utilize data. | 5 |
| Emergence of FAST Services | Free, ad-supported streaming TV services are gaining traction, indicating a shift in consumer preferences and revenue models. | 4 |
| Restructuring and Mergers | Companies are focusing on restructuring and mergers to achieve efficiency and scale in a competitive market environment. | 4 |
| Impact of Geopolitical Instability | Geopolitical tensions are influencing consumer behavior and regulatory measures, particularly concerning platforms like TikTok. | 4 |
| Growth of Gaming Sector | The gaming sector continues to expand, becoming a significant contributor to overall entertainment revenue and content creation. | 5 |
| Need for Data Privacy Solutions | With changing data privacy regulations, companies must innovate to personalize advertising while ensuring consumer anonymity. | 5 |
| Digital Market Expansion in Emerging Regions | Emerging markets like Indonesia show significant growth potential for OTT services and digital platforms. | 4 |