Global entertainment and media advertising is projected to top $1 trillion in 2026 and, by 2028, will double where it was in 2020. Growth will be fueled by an explosion in Internet advertising, which looks set to generate 77% of total ad spend in five years, and about 30% of streaming revenue, according to giant consultancy PwC in its annual five-year outlook.
Ad spend topped consumer spending globally last year.
Total entertainment and media industry revenue rose 5% to $2.8 billion in 2023 and should hit $3.4 trillion in 2028, the firm said, led by ads.
Streamers, the industry’s future, are increasingly tapping advertising to drive sales, along with consolidation and bundling, live sports and password-sharing crackdowns. At this point in the U.S., all the big platforms that didn’t have an ad tier, like Disney+, Netflix and Amazon Prime Video, do now. In an expanding number of markets worldwide, many smaller or regional players are following suit, the report said.
Ads are meant to offset a plateau in subscription revenue as companies have a harder time getting people to pay for digital products.
“As the number and range of streaming services proliferate, a form of market saturation has begun to kick in,” PwC says. It sees global subscriptions to over-the-top video services rising to 2.1 billion in 2028 from 1.6 billion in 2028, but global average revenue per subscription rising less, proportionally, to $67.7 million in 2028 from $65.2 million in 2023.
By 2028, advertising will account for about 28% of global streaming revenues, up from 20% in 2023.
Online connected TV (CTV) ads served during video programming will see a major jump with sales doubling from $20.5 billion in 2023 to $41.2 billion in 2028.
Retail media players are increasingly experimenting with ‘shoppable TV’ advertising, which makes it possible for consumers to buy products direct from ads — an opportunity underlined by retailer Walmart’s purchase of smart TV manufacturer Vizio early this year.
In the midst of an ad surge, PwC cautioned, companies will have to understand how global privacy regulations impact growth. I didn’t specify but that’s one reason Google parent Alphabet finds itself in advanced talks to buy cloud security company Wiz for around $23 billion, its biggest acquisition ever.
The report doesn’t break out individual countries but noted that the U.S. represents more than one-third of global spending in 2023, remaining the world’s biggest entertainment and market for the combined advertising and consumer spending markets by a wide margin. “But scale brings with it maturity and hence relatively slower growth,” it said, projecting a 4.3% compound annual growth rate through 2028 Stateside — behind the global rate of 4.6%.
The fastest growing markets globally are Indonesia and India, followed by China. India will be the world’s fastest-growing OTT video-streaming market over the forecast period and there’s bene a lot of movement there. China is steadily closing its gap with U.S. but government regulation complicates outside investment.
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