International field workplace and world complete cinema income will surpass pre-COVID-19 pandemic ranges in 2026, however admissions gained’t accomplish that over the subsequent 5 years. International subscriptions to streaming providers will publish a 5.6 p.c compound annual progress charge (CAGR) between 2023 and 2028, outpacing a compound annual acquire in streaming income of simply 4 p.c. And promoting income will prime the $1 trillion milestone in 2026 and be the fastest-growing of the three core income classes over the subsequent 5 years.
These are simply among the predictions contained in consulting and accounting agency PwC’s annual “International Leisure & Media Outlook,” revealed late on July 15.
The annual forecast, which covers 13 sectors throughout 53 nations and territories, notes that complete income elevated 5 p.c in 2023 to $2.8 trillion, outpacing general financial progress “regardless of financial headwinds, technological disruption, and elevated geographic and trade competitors.”
The CAGR for the subsequent 5 years is projected to gradual to three.9 p.c although, including $597 billion to the worldwide income pie to spice up it to $3.4 trillion. Highlighting “widespread uncertainty,” PwC emphasised that the secret within the trade to seize a few of that income is enterprise mannequin reinvention, which has “advanced from a strategic possibility into an existential crucial,” the agency mentioned.
In relation to cinema income, the traits have been blended. “Aided by a lot of blockbuster releases in 2023, cinema noticed a 30.4 p.c year-on-year improve in spending on the field workplace,” PwC highlights.
However field workplace/theatrical income will prime pre-pandemic ranges in 2026, somewhat than 2025 as projected a yr in the past, in response to the agency’s up to date forecast. “That is primarily pushed by a bigger funds slate anticipated to drive extra field workplace gross sales and extra advert spend,” explains Bart Spiegel, world leisure and media offers chief at PwC, to The Hollywood Reporter.
The agency sees the 2019 field workplace income of $38.55 billion almost reached in 2025 with $37.68 billion earlier than hitting $40.23 billion in 2026.
International cinema income, helped by ticket value hikes and promoting progress, will proceed to develop, but in addition see a one-year delay. “In final yr’s report, we anticipated that pre-pandemic ranges could be reached by 2025. Nevertheless, this yr’s report predicts that the return will happen in 2026, indicating a extra pessimistic outlook,” shares Spiegel. “A few of this may be attributed to a stronger funds slate all year long 2026. It’s value noting that there was motion through the years, as some main studios made bulletins in the direction of the tip of 2023.”
PwC estimates that after $42.11 billion in world cinema income, 2025 will attain $41.34 billion earlier than an additional soar to almost $44.00 billion in 2026.
The image for cinema admissions is completely different. “Admissions should not anticipated to return to pre-pandemic ranges all through the forecast interval. By 2028, the final yr of our projections, admissions are projected to fall brief by 1.5 billion in comparison with pre-pandemic ranges,” explains Spiegel. Meaning round 6.45 billion admissions forecast for 2028, in contrast with 7.92 billion in 2019.
In North America, admissions are additionally not anticipated to succeed in pre-pandemic ranges through the forecast interval ending in 2028 when PwC forecasts 953 million admissions, which Spiegel calls “a major lower from 1.3 billion in 2019.” Components contributing to this decline embody “adjustments in shopper habits following the pandemic, the rising reputation of streaming platforms, the affect of rising inflation, and viewers fatigue with superhero films,” he says.
In streaming, PwC diagnoses slowing income momentum amid a maturing enterprise. “This lack in income progress is probably going as a result of shoppers have gotten overwhelmed by the variety of streaming service decisions,” it explains. “Firms are responding by providing decrease subscription charges in change for exhibiting advertisements.”
Streaming utilization and shopper uptake are rising, “albeit at a decrease charge than in recent times as service suppliers face elevated competitors and challenges in getting shoppers to pay extra for digital items and providers,” the agency’s report mentions. “International subscriptions to over-the-top (OTT) video providers will rise to 2.1 billion in 2028 from 1.6 billion in 2023 – representing a 5 p.c CAGR. International common income per [streaming] video subscription is barely anticipated to develop, rising from $65.21 in 2023 to $67.66 in 2028.”
That explains latest technique shifts at streaming providers. “This plateauing impact is pushing main streamers to reshape their enterprise fashions and discover new revenues past subscriptions, together with the introduction of ad-based variants (decreased subscription charges with ad-filled content material), cracking down on password-sharing, introduction of dwell sports activities, and trade consolidation,” says PwC. “In developed markets, this consolidation is taking the type of bundling subscription service suppliers.”
Wire-cutting will proceed to affect the trade over the approaching years, in response to the International Outlook report. “We anticipate ongoing declines within the linear ecosystem as extra customers transition to digital choices,” shares Spiegel. “Whereas some main legacy media corporations now supply digital choices, all of them nonetheless face challenges in decreasing churn, managing the rising prices of content material (particularly sports activities rights), and delivering a compelling worth proposition to their subscribers.”
All this additionally signifies that promoting is changing into a much bigger a part of the streaming income combine. The end result: “In 4 years, promoting will make up virtually 28 p.c of all the cash that streaming providers make – a serious improve from the 20 p.c it made in 2023.”
Talking of promoting: International advert income is anticipated to develop at a 6.7 p.c CAGR via 2028, forward of the opposite two broad sector segments. Connectivity will publish a CAGR of two.9 p.c, whereas shopper spending will solely attain a 2.2 p.c CAGR.
Whole promoting income will hit $1 trillion in 2026, “whereas 2028 income will hit double the income of 2020,” the accounting agency predicts and highlights: “Promoting is projected to account for 55 p.c of the full leisure and media trade’s progress over the approaching 5 years.” Web promoting is the biggest and “one of many fastest-growing parts” of the advert pie. Notes the PwC report: “It grew 10.1 p.c in 2023, including $52.5 billion in new revenues, and is projected to rise at a 9.5 p.c CAGR via 2028 when it’ll account for 77.1 p.c of complete advert spending.”
What’s behind the rising significance of advert income? “Advertisers are actually keen to take a position extra in reaching shoppers via completely different platforms, together with telephones, video games, and e-commerce websites,” Spiegel tells THR. “The rising significance of promoting within the leisure and media trade might be attributed to elements reminiscent of the power to monetize information, the nearer relationship between product discovery and buy, and the affect of world privateness rules.”
Questioned in regards to the affect of upper shopper costs on the media trade, the professional notes: “Shopper spending has been affected by inflation, prompting media corporations to reply by providing extra ad-friendly or ad-supported choices at a cheaper price level.”
In the meantime, gaming, together with the e-sports enterprise, has continued being what PwC describes as “one of many fastest-growing massive sectors within the leisure and media universe, with complete income hitting $227.6 billion in 2023, up 4.6 p.c.” Gaming income is on monitor to prime $300 billion in 2027, virtually double its stage in 2019, the agency highlights.
All these Taylor Swift followers, outdated and new, streaming to stadiums have additionally been a key progress engine. Notes PwC: “Pushed by massive occasions, reminiscent of musician world excursions, dwell music revenues rose 26 p.c and accounted for greater than half of the general music market.”
In fact, AI additionally will get consideration within the newest PwC report. Summarizes the corporate: “The worldwide leisure and media trade seems to generative AI to drive new income streams and remodel
enterprise fashions.”
In any case: “Shifts in shopper preferences, and uncertainty across the continued affect of digital transformation and new and rising know-how, reminiscent of generative AI, are inspiring a wave of enterprise mannequin reinvention. If market gamers are to realize their share of the rising income swimming pools we establish, they must reimagine how their firm creates, delivers, and captures worth, leveraging the expansion of promoting whereas additionally harnessing the highly effective alternative offered by AI.”
There are, in fact, additionally dangers and discussions available. “Having exploded onto the scene previously couple of years, generative AI brings main implications — together with each alternatives and challenges,” PwC notes in its International Outlook report. “The U.S. minimize of PwC’s most up-to-date CEO Survey reveals that just about half of U.S. CEOs see GenAI boosting earnings this yr, with 61 p.c anticipating it to enhance the standard of their services and products.”
The labor talks of the previous yr made AI a spotlight subject although. “The necessity to management the usage of AI instruments and AI-generated content material — and to keep away from undercutting creators’ rights and funds — have been key elements within the 2023 Hollywood writers’ strike, and within the subsequent deal struck with the Writers Guild of America,” notes the PwC report. “Going ahead, the velocity at which high-quality content material might be produced will proceed to extend because the associated prices decline. The open query stays exactly how GenAI will translate into increased revenues and assist corporations speed up their pursuit of income swimming pools.”
One high-potential space is within the promoting area, in response to the International Outlook. “GenAI is more and more being built-in into content material creation and promoting instruments,” it notes. “Right here its utility has tended to focus initially on extracting small items of knowledge and producing summaries in subsectors, reminiscent of sports activities media,” it highlights earlier than outlining extra alternative forward: “If GenAI might be harnessed to supply new experiences and create new income streams, the expansion potential is even better.”