A recent study conducted by PwC’s Global Entertainment & Media Outlook reveals the staggering growth in OTT video.
After growing by 35.4 per cent in 2020, OTT video surged another 22.8 per cent in 2021, increasing revenues to US$79.1 billion.
This comes after a 2.3 per cent pandemic-related decline in 2020, global entertainment & media (E&M) revenue rose
10.4 per cent in 2021, from US$2.12 trillion to US$2.34 trillion, according to the findings from PwC’s Global Entertainment & Media Outlook 2022-2026, the 23rd annual analysis and forecast of E&M spending by advertisers and consumers across 52 countries and territories.
Furthermore, global video games and esports revenue rose to US$215.6 billion in 2021 and is forecast to increase at a 8.5 per cent CAGR to US$323.5bn in 2026.
The data revealed that Asia Pacific generated the largest share of revenues in 2021 with US$109.4 billion, double North America, the second-highest region.
Gaming is now the third-largest data-consuming E&M content category after video and communications.
Virtual Reality (VR) continues to be the fastest-growing E&M segment, even though it has a small base. Global VR spending rose by 36 per cent year-on-year in 2021 to US$2.6 billion, following the 39 per cent growth in 2020.
Growth between 2021 and 2026 is expected at 24 per cent CAGR, bringing the segment to US$7.6 billion. Gaming content primarily contributes to VR revenue, taking in US$1.9 billion in 2021. This could increase to US$6.5 billion in 2026, 85 per cent of total VR revenue.
The data revealed that global advertising spreading throughout the digital world has made it a dominant industry category. Following a decline of nearly 7 per cent in 2020, advertising increased an impressive 22.6 per cent in 2021 to US$747.2 billion.
Driven entirely by digital, advertising is set to increase at a 6.6 per cent CAGR through 2026. Advertising in 2026 is projected to be a US$1 trillion market and the most significant E&M revenue stream, surpassing consumer spending and internet access.
Following a 35.4 per cent growth in 2020, Over-the-top (OTT) video rose another 22.8 per cent in 2021, increasing revenues to US$79.1 billion. However, the pace of OTT revenue growth will moderate somewhat; it is expected to grow at a 7.6 per cent CAGR in 2026, increasing revenues to US$114.1 billion.
Traditional TV, beset by competition from OTT streaming services, still generates significant revenues. Still, its inevitable decline will continue, with global revenues projected to decrease at a -0.8 per cent CAGR from US$231 billion in 2021 to US$222.1 billion in 2026.
Following the pandemic, global cinema revenue is bouncing back and is expected to reach a new high of US$46.4 billion in 2023.
Box office revenue is projected to reach US$49.4 billion in 2026 from US$20.8 billion in 2021, an 18.9 per cent CAGR.
The Middle East and Africa have the lowest CAGR E&M spend of any region globally, at US$82 billion. Meanwhile, the top ten growth markets by CAGR are focused in Latin America, the Middle East, Africa and Asia, with OTT video and gaming providing the largest revenue growth and esports and cinema seeing fast growth.