The entertainment and media (E&M) industry is expected to continue its digital transformation and become a $2.8 trillion industry by 2027, according to PwC.

While the revenue growth rate is projected to decline over the next five years, mainly due to weakening consumer spending, digital revenue is set to account for nearly three-quarters (70.8%) of total industry revenue by 2027.

According to the report, global internet access will approach a $1 trillion market, with data consumption nearly tripling between 2022 and 2027. Regionally, the U.S. and China are expected to remain the largest E&M markets, with China projected to grow at a faster compounded annual growth rate (CAGR) of 4.3% compared to the US's 2.9% CAGR.

Advertising, one of the key growth sectors, is anticipated to approach $1 trillion in revenue by 2027. But, advertising dollars are becoming more dispersed as new market players, such as e-commerce sites, video games, and streaming platforms, compete with established social media and search platforms.

The report also highlighted the importance of sectoral hotspots, emerging technologies like generative AI, and high-growth regions like Asia for companies seeking growth opportunities. Gaming is identified as a major driver of industry growth, particularly in the Asia-Pacific, with total gaming revenue expected to rise significantly.

Live sectors, which experienced a downturn during the COVID-19 pandemic, are predicted to outperform the overall E&M industry. Revenues from live experiences, including cinema box office, e-sports, and live music events, are expected to grow at a faster rate.

Werner Ballhaus, Global Entertainment & Media Industry Leader at PwC Germany, emphasizes the need for companies to transform their service offerings, tap into emerging markets and technologies, and navigate evolving regulatory and geopolitical landscapes to engage consumers and drive growth.

Overall, the report outlook provides insights into the evolving digital landscape of the E&M industry and the strategies required for sustained success in an increasingly competitive and dynamic environment.