While the media and entertainment industry was one of the first sectors of business to navigate digital disruption, its transformation is far from over.
That’s the key finding of PwC’s annual “2018 Media & Entertainment Outlook,” which projects that industry revenues will reach $792.3 billion by 2022, up from 666.9 billion in 2017.
“The distinctions between print and digital, video games and sports, wireless and fixed Internet access, pay-TV and OTT, and social and traditional media are blurring,” said Mark McCaffrey, PwC’s U.S. technology, media, and telecommunications leader. “So to succeed in the future, companies must re-envision every aspect of what they do and how they do it. That means having, or having access to, the right technology and premium content, delivered in a cost-effective manner to an audience that is engaged with the brand.”
Below, we take a look at five industry trends highlighted in the PwC report, all of which are expected to continue shaping the M&E landscape.
Fastest-Growing Revenue Segments
During the five-year period from 2017 to 2022, virtual reality (VR), over-the-top (OTT) video, and internet advertising will be among the fastest-growing revenue generators for M&E companies in the U.S., PwC predicts.
The VR market is quickly transforming into an entertainment and productivity platform. In fact, outlets such as USA Today, Washington Post, and The New York Times are on board the VR journalism trend. The U.S. is currently the world’s leading VR market, with revenue of $1.5 billion in 2017, a 250%-plus increase year over year. By 2022, that total is expected to reach $7.2 billion.
OTT video revenue for media and entertainment (think: HBO Go, Hulu, Netflix) in the U.S. reached $20.1 billion in 2017, up 15.2% YoY. PwC predicts that growth rates will begin to slow as the market matures, but revenue in this area is expected to reach $30.6 billion in 2022.
Additionally, the U.S. continues to lead the global Internet advertising market, with total revenue of $88 billion in 2017. The report predicts that the market will continue to experience growth over the forecast period, expanding at a 7.7% CAGR between 2017 and 2022 to reach $127.4 billion.