No Match Found
Fault Lines and Fractures: Innovation and Growth in a New Competitive LandscapeFive-year projections of consumer and advertising spending data across 14 segments and 52 territories
Our 23rd annual Global Entertainment & Media Outlook offers an in-depth look at how different forces, fault lines and fractures will affect 14 E&M segments across 52 territories over the next five years. Explore our findings to uncover key perspectives and insights that will help shape your strategies for the future.
Hong Kong entertainment and media (E&M) revenue is projected to slightly increase 5% year on year from US$9.09bn to US$9.54bn in 2022, following a rebound from COVID-19 pandemic in 2021. Over the next five years, total E&M revenue increase in Hong Kong is expected to be at a compound annual growth rate (CAGR) of 3.5% to reach US$11bn in 2026, slower than the global rate of 4.6%.
The global Internet advertising market experienced dramatic growth in 2021 as online media continued to grow its share of total advertising revenue during a year when advertiser budgets corrected following the height of the COVID-19 pandemic in 2020. The pandemic has led to increased consumer interest in digital content and services, which has supported this rebound in advertiser spend. Total global Internet advertising revenue of US$468.4bn was generated in 2021, an increase of 31.6% compared with 2020.
The Internet advertising market in Hong Kong has grown rapidly in recent years, but between 2021 and 2026 year-on-year growth will slow from 29.2% to 4.8% as the market matures. Total revenue was US$1.4bn in 2021 and is expected to increase at a 7.5% CAGR to reach US$2.0bn by 2026.
Growth in the mobile sector will outstrip that of the wired sector, with an increase at an 8.9% CAGR compared to an increase at a 4.6% CAGR for wired. Total mobile Internet advertising revenue was US$921mn in 2021, and will rise to US$1.4bn by 2026. Meanwhile, total wired Internet advertising revenue will increase from US$477mn to US$596mn over the forecast period.
The market is shifting further towards mobile, which will account for 70.3% of revenue by 2026.
There will be growth across all segments of the market, apart from wired paid search, which will contract at a -1.0% CAGR to 2026. The fastest-growing category in both the wired and mobile sectors will be video display, which will see an increase at a 17.7% CAGR in the wired sector and at 14.5% CAGR in the mobile sector.
The involvements of tech giants globally in the Metaverse field is noteworthy. AR and VR based application such as gaming, glasses and headsets are the most common focus areas for the players around these activities in the metaverse domain.
In 2021, total NFT revenues amounted to US$27.8bn. Over the next five years, the core forecast puts total NFT revenue growth at a CAGR of 22.9%, based on the assumption that the momentum seen in the first five months of 2022 continues more or less evenly. In the best-case scenario, other NFT revenue will accelerate in the second half of 2022, reaching new all-time highs each year to 2026 and showing a CAGR of 45.7%. In the worst case, the NFT market bubble will stutter in the second half of 2022 and pop altogether in 2023, failing to recover and posting a CAGR of -19.8%. In this scenario, even the metaverse NFT market will be hit before ever having had a chance to gain traction.
2021 largely saw a continuation in the rise of over-the-top video (OTT), with a growth rate averaging 22.8% year-on-year across all regions, generating a total of US$79.1bn in revenue. This growth was driven by a combination of new subscriptions and price hikes. The sector, which saw a huge boost from the pandemic in 2020 with a 35.4% year-on-year increase, is showing signs of a gradual return to sustainable levels of growth over the forecast period.
Hong Kong’s OTT market continues to expand, with growth of 16.8% in 2021 producing revenue of US$296mn. Despite the market being fairly saturated, the tendency for households to “stack” OTT platforms to access all their preferred content is continuing to support growth. Revenue is expected to expand at a 6.3% CAGR over the forecast period to reach US$401mn in 2026. At this time, subscription video on demand (SVOD) platforms will dominate over 92% of OTT revenue in Hong Kong.
Competition in the local OTT market is intensified as multiple local broadcasters and streaming platforms entered the market.
Total global video games and esports revenue was US$215.6bn in 2021 and is expected to reach US$323.5bn in 2026, increasing at an 8.5% CAGR. This growth will be driven by the continuing penetration of smartphone-based social/casual gaming into emerging markets and rapidly increasing levels of investment in in-app advertising. Other drivers include the expanded uptake of new consoles in existing video games markets and further rises in free-to-play gaming across all sectors of the market.
Hong Kong saw small growth across all revenue types in 2021, with total video games revenue reaching US$1.4bn. An increase at a 6.3% CAGR is expected in the forecast period, with most of that growth coming from social/casual gaming, and specifically the new inclusion of in-app advertising revenue, which will grow rapidly to account for 44.4% of the social/casual sub-segment by 2026.
Console revenue is also healthy – Hong Kong’s gamers spent 14.1% more year-on-year on console games microtransactions in 2021, more than offsetting the continuing decline of physical units sold. PC games revenue will rise at a slightly higher rate, however, making the two data lines at similar levels by the end of the forecast period – with total PC games revenue at US$255mn and total console games revenue at US$278mn.
Post-pandemic, global cinema revenue will depend heavily on a strong product line of Hollywood superhero movies, sequels and big-budget animated features, as well as the relaxation of COVID-19 restrictions. The box office success of a blockbuster movie in late 2021 as the COVID-19 Omicron variant was at its height was revealing. It proved audiences were still willing to go out to cinemas in huge numbers for big-event movies.
The COVID-19 pandemic caused box office revenue in Hong Kong to contract to US$69mn in 2020, down from US$250mn in 2019. There was a partial recovery in sales in 2021 to US$157mn and revenue should exceed pre-pandemic levels by 2024. Box office revenue will rise to US$269mn in 2026.
Hong Kong saw an increase in COVID-19 cases at the beginning of 2022 and as such, cinemas were required to close for several months, while some cinemas were forced to close permanently. Increased COVID-19 restrictions also led to the Hong Kong International film festival being indefinitely postponed, after it was originally scheduled for the end of March.
Disruptions in public health, supply chains and geopolitics made 2021 a year of uncertainty. But amid all the skepticism, there is greater clarity about the overall trends of the market and the forces driving growth, and a better understanding of the fault lines and fractures that are altering the entertainment and media landscape.
Understanding where consumers and advertisers are spending their money in the entertainment and media industry can help inform many important business decisions.
PwC’s Global Entertainment & Media Outlook provides a single comparable source of consumer and advertiser spending data and analysis. Updated annually, the intuitive online tool allows you to easily browse, compare and contrast spending and growth rates.