The media and entertainment industry is on track to reach a valuation of over $1 trillion by 2024, according to Omdia’s senior research director, María Rua Aguete. This exciting news was shared during the Future Trends Report panel at Miami’s Content Americas event, which runs until January 25.
The Trillion-Dollar Media and Entertainment Ecosystem
Aguete highlights that the industry’s growth is driven by various segments. Online video, cinema, music, and games are the key contributors to this expansion, with estimated values of $345 billion, $41 billion, $44 billion, and $255 billion respectively. These segments demonstrate the sector’s resilience and adaptability in the face of changing market conditions.
Advertising’s Dominant Role and the Rise of Online Video
Advertising continues to underpin the media and entertainment economy, with online video advertising expected to become the leading revenue source by 2028. This shift reflects the changing consumption patterns where digital platforms are favored over traditional media channels. The projected growth rates of online video subscriptions (+14.5%) and online video advertising (+18.0%) highlight the strategic importance of ad-supported models.
The Emergence of Free Ad-Supported Streaming TV (FAST)
The Free Ad-Supported Streaming TV (FAST) market is experiencing rapid growth, with significant increases in revenues projected from 2024 to 2028. The United States is expected to dominate this space, commanding a substantial portion of the estimated $13 billion FAST market by 2028. Western Europe and Latin America are also poised for considerable growth, demonstrating the increasing consumer appetite for free, quality content and media companies’ strategic shift towards ad-supported streaming services.
Consumer Behavior and Service Stacking
With the proliferation of streaming services, consumer behavior is showing signs of saturation, leading to a plateau in paid video service stacking. Research suggests that most consumers prefer no more than three paid services. This shift is due to market maturation and consumers’ increasing scrutiny of the value offered by multiple subscriptions. The rise of free services as part of the service stacking equation indicates a broader trend of diversification in content consumption patterns. Paid and free content offerings play an important role in capturing and retaining audience attention.
The Global Perspective: Latin America’s Digital Surge
Latin America is projected to reach a market value of $53 billion by 2028, showcasing the robust growth of digital media. Online video subscriptions and TVOD (Transactional Video on Demand) are expected to grow at 18.2% and online video advertising at 20.5%. This exemplifies Latin America’s increasing role in the global media ecosystem’s evolution. Gaming also performs strongly in the region, with a predicted 25.4% increase in advertising, further solidifying its importance.
Streamers’ Gaming Play
The gaming sector has experienced significant growth and is expected to surpass $250 billion in revenue this year. Advertising within the gaming industry is expanding rapidly, with predictions that it will rival Linear TV by 2027, reaching a total revenue of $131 billion. The potential for adapting gaming IPs (intellectual properties) for other entertainment mediums is immense. Recent successes with adaptations like “The Last of Us,” “Arcane,” and “The Witcher” have raised expectations and opened doors for more adaptations such as “Bioshock,” “Fallout,” “Mass Effect,” and “Tom Clancy’s Splinter Cell.”
Omdia’s analysis offers valuable insights into the ongoing transformation of the media and entertainment industry. With the convergence of advertising, digital content, and evolving consumer preferences, the sector highlights the importance of innovation, adaptability, and a keen understanding of the past and future trends.
For more information, read the original article on F5mag.com.
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