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Hong Kong outlook highlights
Hong Kong entertainment and media (E&M) revenue is expected to see a slight increase of 5.55% year-on-year to US$9.76bn in 2023. Projections show E&M growth in Hong Kong will be steady, with a compound annual growth rate (CAGR) of 3.47% between 2022 and 2027, with revenue expected to reach US$11bn in 2027.
Segment highlights
Hong Kong box office fell in 2022 as a result of cinemas being closed for four months at the start of the year as a precaution against COVID-19. Nonetheless, total cinema revenue is forecast to rise at a 13.3% CAGR over the forecast period to US$273mn by 2027 – up from the US$146mn achieved in 2022.
Revenue has been driven primarily by two familiar US blockbusters: Top Gun: Maverick and Avatar: The Way of Water . An encouraging sign, though, has been the robust performance of local films. Sci-fi drama Warriors of Future grossed a record-breaking US$10mn in Hong Kong in 2022 while local films had a healthy market share of 29.5%. Another positive sign has been government commitment to funding local production through new schemes set up by the Hong Kong Film Development Council to promote co-production with other Asian partners.
Hong Kong business-to-business (B2B) 2022-2027 CAGR reaches 7.16%, which outperforms Global’s 2.93%, as driven by trade shows. Hong Kong’s B2B market growth slowed markedly in 2022 due to continued disruption of trade shows. The annual growth in 2022 was only 10.7% due to the reintroduction of COVID-19 restrictions at the start of the year following a wave of Omicron infections.
As the measures of quarantine for incomers lifted since September 2022, a fast-paced growth is expected in coming year. Hong Kong trade shows’ revenue will grow at 12.55% CAGR, to reach US$548mn in 2027 from US$303mn, mainly driven by the growth in 2023.
Total revenue in the Internet advertising market in Hong Kong was US$1.6bn in 2022 and will grow, at a 6.4% CAGR, to US$2.1bn by 2027. Growth will slow over the forecast period, reflecting a mature market. Fixed broadband penetration reached 117% in 2022, and mobile Internet penetration hit 90%, the joint highest in the Asia Pacific region alongside Japan.
The Hong Kong market is dominated by the mobile sector, which accounted for 67.4% of revenue in 2022. Growth will also be faster in the mobile sector, where a 7.5% CAGR is expected to push revenue from US$1.0bn to US$1.5bn. In the wired sector, meanwhile, a 4.1% CAGR will see revenue increase from US$507mn to US$621mn.
In line with global trends, the fastest-growing category in both the wired and mobile sectors is video display, which will see a 15.5% CAGR in the wired sector and a 12.3% CAGR in the mobile sector. Besides, social media is popular in Hong Kong and an important part of the digital advertising market.
Hong Kong’s OTT market expanded 24.1% in 2022 to reach total revenue of US$305mn. There remains room for further expansion despite the competitive nature of the market. Revenue will increase at a 8.8% CAGR to reach US$465mn in 2027.
Subscription streaming platforms dominate the OTT market in Hong Kong, taking over 90% of revenue in 2022. This is set to grow further with new launches and households taking multiple services, accounting for 93% of revenue in 2027.
Total video games revenue in Hong Kong was US$1.4bn in 2022, and is forecast to exceed US$1.8bn by 2027, increasing at a five-year 5.1% CAGR. While the growth rate in 2022 is significantly slower than in recent years, Hong Kong’s video games market is nonetheless expected to expand steadily to the end of the forecast period.
Social and casual gaming is the largest sector of Hong Kong’s video games market, reaching US$957mn in 2022. Social and casual gaming will also witness the fastest growth, approaching US$1.3bn in 2027 at a 5.8% CAGR. In-app games advertising revenue performed particularly strongly in 2022, exhibiting year-on-year growth of 19.1%. But this is expected to fall to 6.7% in 2023, growing at a steadier rate from 2024 onwards.
Total traditional gaming revenue was US$451mn in 2022, and is expected to grow to US$535mn in 2027 at a 3.5% CAGR. Although forecasted growth in this sector is hindered slightly by declining physical sales of console games, a healthy market for online/microtransaction console sales compensates for this. The slightly smaller PC games sector is also expected to grow consistently through the forecast period, with an increase at a 5.0% CAGR.
2023 Global Outlook perspectives report
For the E&M industries, 2022 marked an important inflection point. Total global E&M revenue rose 5.4% in 2022, to US$2.32 trillion. That represents a sharp deceleration from the 10.6% growth rate in 2021, when economies and industries globally were starting to rebound from the upheaval caused by the COVID-19 pandemic. And in each of the next five years, the rate of growth will decline sequentially, so that by 2027 revenue will grow just 2.8% from 2026. That’s slower than the 3.1% rate of overall economic growth that the International Monetary Fund (IMF) projects for that year.
Introducing the Global Telecoms Outlook
What does the future look like for the global telecommunications industry? How are trends in B2B and B2C changing demand, and what can telecoms companies do to respond? Why is the industry’s integrated business model at a crossroads?
Answers to all this and more will be in our inaugural Global Telecoms Outlook, launching September 2023. Sign up to be the first to receive the Perspectives report when it’s released.
Introducing the Global Telecoms Outlook
What does the future look like for the global telecommunications industry? How are trends in B2B and B2C changing demand, and what can telecoms companies do to respond? Why is the industry’s integrated business model at a crossroads?
Answers to all this and more will be in our inaugural Global Telecoms Outlook, launching September 2023. Sign up to be the first to receive the Perspectives report when it’s released.
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