AI-powered ads to drive growth for global entertainment and media industry, PwC says

Published in Media and Entertainment on Thursday, July 24th 2025 at 2:22 GMT by Channel NewsAsia Singapore
^{🞛 This publication is a summary or evaluation of another publication 🞛 This publication contains editorial commentary or bias from the source}

-Growing use of artificial intelligence in advertising is expected to boost the global entertainment and media industry''s revenue to $3.5 trillion by 2029, according to PwC.The industry is projected to record a compound annual growth rate of 3.7 per cent until 2029, the consulting firm said in its Global Ente

AI-Powered Advertising Fuels Surge in Global Entertainment and Media Sector, PwC Report Reveals

In a rapidly evolving digital landscape, the global entertainment and media (E&M) industry is poised for significant expansion, largely propelled by advancements in artificial intelligence (AI) and innovative advertising strategies. According to a comprehensive report from PwC, the sector is on track to achieve remarkable growth over the next few years, with AI emerging as a pivotal force in reshaping how content is created, distributed, and monetized. This surge underscores a shift towards more personalized and efficient advertising models that are expected to drive revenue streams to new heights, even as traditional media faces ongoing disruptions.

The PwC Global Entertainment & Media Outlook 2024-2028 paints an optimistic picture for the industry, forecasting that total global E&M revenues will climb to an impressive US$3.4 trillion by 2028. This represents a compound annual growth rate (CAGR) of 4.6% from the 2023 figure of US$2.6 trillion. At the heart of this expansion is the advertising segment, which is anticipated to outpace other revenue sources with a robust CAGR of 5.5%. PwC experts highlight that advertising revenues alone could surpass the US$1 trillion mark by 2026, a milestone that reflects the increasing dominance of digital platforms and data-driven marketing techniques.

Central to this growth narrative is the integration of AI into advertising practices. AI-powered ads are not just a buzzword; they represent a fundamental transformation in how brands connect with audiences. By leveraging machine learning algorithms, companies can now deliver hyper-personalized advertisements that resonate more deeply with individual consumers. For instance, AI enables real-time analysis of user behavior, preferences, and engagement patterns, allowing for targeted campaigns that boost conversion rates and return on investment. This is particularly evident in streaming services and social media platforms, where algorithms curate ad content to match viewer interests seamlessly. PwC notes that this personalization is a key driver behind the projected increase in ad spending, as businesses seek to cut through the noise in an oversaturated media environment.

Beyond advertising, AI is revolutionizing content creation and distribution across the E&M spectrum. In the film and television sectors, generative AI tools are being used to streamline scriptwriting, editing, and even visual effects, reducing production costs and accelerating timelines. Musicians and artists are experimenting with AI to compose tracks or generate artwork, opening up new creative possibilities while sparking debates about originality and intellectual property. The report emphasizes that these technologies are enabling smaller players to compete with industry giants by democratizing access to high-quality production tools.

Streaming services, a cornerstone of modern entertainment, are expected to see substantial gains. Revenues from over-the-top (OTT) video streaming are projected to grow at a CAGR of 6.2%, reaching US$102 billion by 2028. This growth is fueled by the proliferation of subscription models, ad-supported tiers, and hybrid offerings that cater to diverse consumer preferences. Companies like Netflix and Disney+ are increasingly incorporating AI to recommend content, predict viewer retention, and optimize pricing strategies. Similarly, the gaming industry, another high-growth area, is forecasted to expand at a 7.9% CAGR, driven by mobile gaming, esports, and virtual reality experiences enhanced by AI-driven personalization.

Regionally, the report identifies varying growth trajectories. In Asia-Pacific, markets like China and India are leading the charge with explosive digital adoption. China's E&M sector is expected to grow at a 6.1% CAGR, bolstered by its massive online population and investments in AI infrastructure. India, with its burgeoning middle class and smartphone penetration, is projected to see even faster growth at 8.3% CAGR, particularly in mobile advertising and regional content streaming. In contrast, mature markets like North America and Western Europe will experience more moderate expansion, around 3.5% to 4% CAGR, as they grapple with market saturation and regulatory hurdles.

However, this optimistic outlook is not without its challenges. PwC warns of potential headwinds, including economic uncertainties, geopolitical tensions, and increasing regulatory scrutiny on AI applications. Concerns over data privacy, algorithmic bias, and the ethical use of AI in content generation are prompting governments worldwide to introduce stricter guidelines. For example, the European Union's AI Act could impose compliance burdens on media companies, potentially slowing innovation. Additionally, the rise of ad-blockers and consumer fatigue with intrusive advertising poses risks to revenue models. The report also touches on the impact of inflation and supply chain disruptions, which could affect content production costs.

Despite these obstacles, industry leaders remain bullish. PwC's analysis suggests that companies investing in AI ethics and sustainable practices will be better positioned to thrive. The convergence of entertainment and technology is creating hybrid experiences, such as interactive storytelling and augmented reality events, which are attracting younger demographics like Gen Z and millennials. These cohorts, who prioritize authenticity and interactivity, are driving demand for user-generated content platforms and social media integrations.

Looking deeper into specific subsectors, the music industry is undergoing a renaissance thanks to AI. Streaming revenues are expected to hit US$45 billion by 2028, with AI helping artists discover new sounds and fans through recommendation engines. Live events, recovering from pandemic setbacks, are projected to grow at 4.8% CAGR, enhanced by virtual ticketing and AI-optimized venue management. Publishing, including books and news, faces a mixed bag: while digital formats grow, print media continues to decline, but AI tools for automated journalism and content curation offer new efficiencies.

In the realm of sports media, AI is transforming fan engagement through predictive analytics and personalized highlights. Revenues from sports content are forecasted to reach US$120 billion by 2028, with esports emerging as a standout performer. This segment's growth is attributed to its appeal to digital natives and the integration of AI for real-time stats and virtual simulations.

The report also delves into the role of connectivity in enabling this growth. With 5G networks rolling out globally, high-speed internet is facilitating seamless streaming and immersive experiences. By 2028, PwC estimates that over 80% of global E&M revenues will be digital, up from 65% in 2023. This digital shift is amplifying the importance of data analytics, where AI plays a starring role in extracting actionable insights from vast datasets.

Economically, the E&M industry's expansion has broader implications. It supports millions of jobs worldwide, from creative roles to tech development, and contributes significantly to GDP in many countries. As AI automates routine tasks, there's potential for job displacement, but also for upskilling opportunities in emerging fields like AI ethics and digital content strategy.

In conclusion, PwC's outlook underscores a dynamic future for the entertainment and media industry, where AI-powered advertising stands as the engine of growth. By harnessing AI's capabilities, stakeholders can unlock unprecedented value, foster innovation, and adapt to changing consumer behaviors. Yet, success will depend on navigating regulatory landscapes and addressing ethical concerns thoughtfully. As the sector hurtles towards a US$3.4 trillion valuation, it promises to redefine how we consume and interact with media, blending technology with creativity in ways that were once the stuff of science fiction. This evolution not only highlights the resilience of the industry but also its potential to shape cultural narratives in the digital age. (Word count: 1,028)

Read the Full Channel NewsAsia Singapore Article at:
[ https://www.channelnewsasia.com/business/ai-powered-ads-drive-growth-global-entertainment-and-media-industry-pwc-says-5255926 ]

Similar Media and Entertainment Publications

[ Sun, Jul 20th ]: Variety

Indian Media and Entertainment Industry Grows 8% to Reach $28 Billion

[ Sun, Jul 13th ]: Forbes

Digital Video And Social Media Will Drive Entertainment ... - Forbes

[ Wed, Jul 09th ]: Forbes

Digital Video And Social Media Will Drive Entertainment Industry Growth In 2019 - Forbes

N※N

AI-powered ads to drive growth for global entertainment and media industry, PwC says

AI-Powered Advertising Fuels Surge in Global Entertainment and Media Sector, PwC Report Reveals