Global Media and Entertainment advertising It is projected to exceed $1 trillion in 2026 and, by 2028, double the 2020 level. Growth will be driven by an explosion in Internet advertising, which looks set to generate 77% of total advertising spending in five years and around 30% of transmission revenue, according to the giant consulting firm PwC in its annual outlook for the next five years.
Advertising spending outpaced consumer spending globally last year.
Total entertainment and media revenue rose 5% to $2.8 trillion in 2023 and is expected to reach $3.4 trillion in 2028, the firm said, led by advertising.
Streamers, the future of the industry, are increasingly turning to advertising to drive sales, along with consolidation and bundles, live sports and restrictive measures against password sharing. At this point in the US, all the major platforms that didn’t have an ad-supported tier, like Disney+, Netflix and Amazon Prime Videodo it now. In an increasing number of markets around the world, many smaller or regional players are following suit, according to the report.
The ads are meant to offset a plateau in subscription revenue as companies find it harder to get people to pay for digital products.
“As the number and variety of streaming services proliferate, a form of market saturation has begun to set in,” says PwC. It forecasts that global subscriptions to OTT video services will rise from $1.6 billion in 2028 to $2.1 billion in 2028, but average global subscription revenue will rise less proportionally, from $65.2 million in 2023 to $67.7 million in 2028.
By 2028, advertising will account for around 28% of global streaming revenue, up from 20% in 2023.
Online connected television (CTV) ads shown during video programming will see a huge surge, 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 allows consumers to purchase products directly from ads, an opportunity underscored by retailer Walmart’s purchase of smart TV maker Vizio earlier this year.
That’s really key, said Bart Spiegel, a PwC partner and head of US Media and Global Entertainment & Media Deals, emphasizing that the ability to monetize data is becoming much more sophisticated. “You’ll be able to do a better job, especially with programmatic advertising and advertising that’s curated specifically for your audience,” he told Deadline. “There’s a continued opportunity for advertisers to spend more and increase their ability to engage consumers.”
Amid a surge in advertising, PwC warned, companies will need to understand how global privacy regulations affect growth. I didn’t specify, but that’s one reason why Alphabet, Google’s parent company, is in advanced talks to buy cloud security company Wiz for about $23 billion, its largest acquisition to date.
The report does not break out individual countries, but notes that the US accounts for more than a third of global spending in 2023, and remains the world’s largest market for entertainment and advertising and consumer spending by a wide margin. “But with scale comes maturity and therefore relatively slower growth,” it says, projecting a compound annual growth rate of 4.3% through 2028 in the US, below 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 has been a lot of movement there. China is steadily closing its gap with the US, but government regulation complicates outside investment.
FURTHER