In a forecast presented by Omdia’s senior research director, María Rua Aguete, the media and entertainment industry is poised to surpass a remarkable $1 trillion valuation in 2024. The insights were shared during the Future Trends Report panel at Miami’s Content Americas event, extending until January 25.
Diverse Segments Propelling Growth
The trillion-dollar milestone is attributed to various segments contributing significantly to the industry's expansion. Online video ($345 billion), cinema ($41 billion), music ($44 billion), and games ($255 billion) play key roles. The complex interplay of consumer preferences, technological advancements, and evolving business models underscores the industry's robustness and adaptability to changing market conditions.
Advertising's Dominance and the Rise of Online Video
Advertising remains a cornerstone of the media and entertainment economy, with online video advertising projected to become the leading revenue source by 2028. This shift mirrors changing consumption patterns favoring digital platforms over traditional media channels. Projected growth rates, including online video subscriptions and TVOD at +14.5% and online video advertising at +18.0%, emphasize the strategic importance of ad-supported models.
FAST Market Growth and Strategic Pivots
The Free Ad-Supported Streaming TV (FAST) market is experiencing rapid expansion, with projections indicating substantial revenue growth from 2024 to 2028. The U.S. is anticipated to dominate this space, capturing a significant portion of the $13 billion FAST market by 2028. Western Europe and Latin America are also poised for considerable growth, reflecting the increasing consumer appetite for free, quality content and media companies' strategic pivot towards ad-supported streaming services.
Evolving Consumer Behavior and Service Stacking
Amidst the proliferation of streaming services, consumer behavior shows signs of saturation, with paid video service stacking plateauing. The shift is attributed to market maturation and increased consumer scrutiny of the value proposition from multiple subscriptions. The rise of free services in the service stacking equation signifies a broader trend towards diversification in content consumption patterns, highlighting the dynamic interplay between paid and free content offerings.
Latin America's Digital Surge
The Latin American market, projected to reach $53 billion by 2028, exemplifies broader trends reshaping the global media landscape. With online video subscriptions and TVOD growing at 18.2% and online video advertising at 20.5%, Latin America represents the robust expansion of digital media. Gaming also plays a significant role, with advertising in this segment set for a 25.4% increase, reinforcing the region's increased role in the global media ecosystem.
Gaming's Growth Trajectory
The gaming sector, surpassing $250 billion in revenue this year, is on a trajectory to rival Linear TV by 2027, reaching $131 billion in total revenue. The advertising model within gaming is rapidly expanding, with recent successful adaptations like “The Last of Us,” “Arcane,” and “The Witcher.” Anticipated adaptations include notable gaming titles such as “Bioshock,” “Fallout,” “Mass Effect,” and “Tom Clancy’s Splinter Cell.”
In conclusion, Omdia’s insightful analysis provides a lens through which to understand the ongoing transformation of the media and entertainment industry. The convergence of advertising, digital content, and evolving consumer preferences shapes a narrative emphasizing innovation, adaptability, and a keen awareness of the past and future.