SPDR S&P 500 ETF (ETF:SPY) – Global Entertainment Industry To Generate $2.6 Trillion In Revenues By 2025: Report

The global entertainment and media industry is on track to grow by 6.5{478333fef289f17d569c76970834c08f92d608302faf6c452490324ee355f13f} in 2021 and 6.7{478333fef289f17d569c76970834c08f92d608302faf6c452490324ee355f13f} in 2022, according to the newly-published Global Entertainment & Media Outlook 2021-2025 from PwC, which credited strong demand for digital content and advertising as fueling this new vibrancy.

The Pandemic’s Chaos: The report noted the uptick in growth follows a disastrous pandemic-ravaged 2020 that saw in-person entertainment come to a halt — particularly in movie theater box office revenues, which crashed by 71{478333fef289f17d569c76970834c08f92d608302faf6c452490324ee355f13f}.

Global entertainment and media industry revenue dropped by 3.8{478333fef289f17d569c76970834c08f92d608302faf6c452490324ee355f13f} from $2.1 trillion in 2019 to $2 trillion in 2020, the largest year-over-year decline since PwC began tracking this data 22 years ago.

A Brighter Future: Looking ahead, however, PwC is forecasting this sector will enjoy a 5{478333fef289f17d569c76970834c08f92d608302faf6c452490324ee355f13f} compound annual growth rate (CAGR) that will raise industry revenues to $2.6 trillion in 2025.

Within this sector, PwC is forecasting the biggest growth trajectory to be in video streaming, with a projected CAGR growth of 10.6{478333fef289f17d569c76970834c08f92d608302faf6c452490324ee355f13f} to 2025, making it an $81.3 billion industry. Video game and esports revenues are expected to enjoy a 5.7{478333fef289f17d569c76970834c08f92d608302faf6c452490324ee355f13f} CAGR and become a nearly $200 billion business within four years.

Virtual reality was identified as the sector’s fastest-growing segment, although it is taking from a smaller base than the other industries – PwC projects it will sustain a CAGR of more than 30{478333fef289f17d569c76970834c08f92d608302faf6c452490324ee355f13f} over the next five years to reach $6.9 billion in business in 2025.

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Among the industries that were severely impacted by the pandemic, music experienced a 74.4{478333fef289f17d569c76970834c08f92d608302faf6c452490324ee355f13f} plummet in live performance revenues in 2020, but its total revenues are expected to grow at a 12.8{478333fef289f17d569c76970834c08f92d608302faf6c452490324ee355f13f} CAGR over the next five years to $29.3 billion by 2025, thanks primarily to digital streaming with the return to live performances adding to the revenue stream as concert venues reopen and major performing artists return to touring.

Two industries within the sector are expected to struggle in the next few years: PwC is forecasting that cinema revenues will not be back to their pre-pandemic levels until at least 2024. And while traditional television and home video is the largest consumer segment at $219 billion, its CAGR is expected to shrink by 1.2{478333fef289f17d569c76970834c08f92d608302faf6c452490324ee355f13f} over the next five years.

It Pays To Advertise: PwC, which generated also found internet advertising spending was up by 9{478333fef289f17d569c76970834c08f92d608302faf6c452490324ee355f13f} last year to $336 billion, overtaking non-internet advertising spending for the first time. Internet advertising is projected to experience a 7.7{478333fef289f17d569c76970834c08f92d608302faf6c452490324ee355f13f} CAGR over the next five years.

“No country’s combined consumer and advertising revenue will rise at less than a 3{478333fef289f17d569c76970834c08f92d608302faf6c452490324ee355f13f} five-year CAGR to 2025, with Japan the lowest at 3.1{478333fef289f17d569c76970834c08f92d608302faf6c452490324ee355f13f},” said the report. “By contrast, in the 2019 version of this analysis, 26 countries dipped below a 3.0{478333fef289f17d569c76970834c08f92d608302faf6c452490324ee355f13f} five-year CAGR, including almost all of Western Europe.

“India, where consumer and advertising revenue fell just 0.2{478333fef289f17d569c76970834c08f92d608302faf6c452490324ee355f13f} in 2020, has the highest growth forecast to 2025, at a 10.4{478333fef289f17d569c76970834c08f92d608302faf6c452490324ee355f13f} CAGR,” the report added, noting that “Saudi Arabia, whose market has been strengthened greatly by the lifting of a 35-year ban on cinemas in 2018, and Nigeria, where booming video games and TV subscription revenue will push the five-year CAGR to more than 10{478333fef289f17d569c76970834c08f92d608302faf6c452490324ee355f13f}.”

© 2021 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.

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