Advisory and consulting firm PwC this week released a report detailing that global entertainment and media (E&M) industry revenues edged towards US$3 trillion in 2024 and are forecast to hit US$3.5 trillion in 2029, driven by advertising, live events, and video games.

According to PwC’s Annual Global Entertainment and Media Outlook 2025 – 2029, the E&M industry is projected to grow at a compound annual growth rate (CAGR) of 3.7 per cent until 2029, a rate above the projected global economic growth average, but below pre-pandemic highs.

However, economic uncertainty and anaemic consumer spending growth, amid heightened domestic and international competition in the industry, is expected to weigh on E&M growth rates through the forecast period until 2029.

As growth for paid or subscription products slows amid heightened industry competition and constrained consumer spending, particularly in mature markets, advertising is forecast to represent a significant driver of revenue growth for the E&M industry at large.

Of the three major E&M categories analysed (connectivity, advertising, consumer), advertising is expected to grow fastest, three times as fast (6.1 per cent CAGR) as the consumer category (2 per cent).

In fact, the fastest growing E&M revenue metrics over the next five years are all advertising driven – including retail advertising (15 per cent), social and mobile on-stream video advertising (15 per cent), and connected TV in-stream internet advertising (14 per cent).

Digital formats, which account for 72 per cent of overall ad revenue in 2024, will rise to 80 per cent in 2029, with new technologies including AI and hyper-personalisation expected to drive this even further.

Moreover, high-growth areas include retail search advertising in e-shopping (rising from 32.7 per cent in 2020 to 45.5 per cent in 2029) and advertising in video games (rising from 32.8 per cent in 2024 to 38.5 per cent in 2029).

AI is impacting the E&M industry in many ways. One of the areas in which it is likely to influence revenue growth is in connected TV (any television that connects to the internet to stream video content).

In 2020, connected TV advertising revenue equated to just 5.9 per cent of total traditional broadcast TV advertising. In 2024, this figure had jumped to 22 per cent.

But with the rise of digital engagement and the prospect of AI-assisted hyper-personalisation, which may lead to greater end-user uptake, connected TV ad revenues will rise to US$51 billion in 2029, equal to 45 per cent of traditional broadcast TV advertising.

For now, connectivity remains the largest category, with spending reaching US$1.3 trillion in 2029, growing at a CAGR of 2.8 per cent and driven mainly by mobile internet service revenue.

However, advertising’s pronounced growth rates are set to see the gulf between connectivity and advertising spend rapidly narrow by 2029.

At the same time, consumers may spend more of their free time online, but they continue to spend more of their entertainment budget offline.

In 2024, non-digital formats accounted for 61 per cent of consumer revenue, a level of spend expected to broadly continue through the forecast period.

While global cinema box office spending is expected to rise from US$33bn in 2024 to US$41.5bn in 2029, consumers’ preferences are continuing to shift toward locally produced films.

Globally, the top five US studios’ market share has dropped from over 60 per cent before the pandemic to 51 per cent in 2024.

Meanwhile, the global video gaming industry continues to be an engine of E&M growth, with the global video games market exceeding the movie and music industry combined.

Total revenues were US$224bn in 2024, with the industry expected to grow to nearly US$300bn in 2029 at a CAGR of 5.7 per cent.