World media and entertainment content top 25

ThedamageCOVIDdid tothe entertainment and media industries is evident in the unprecedented 5.5% spending drop in 2020 measured by PwCs Global Entertainment & Media Outlook reportreleased Monday.

And yet the future remains bright for the sector, whichPwC projects will reach$915 billion by 2025,a 3.9% compound annual growth rateincreasefrom2021.

Hows that possible if so many parts of showbiz were so adversely impacted? Take a deeper look at the revenue streams, which are a divergent mix but worth focusing on to get a clearer sense of exactly what is and isnt fueling the recovery.

Rapid growth in segments such as video games and OTT video will offset the stagnant growth in linear TV, according to PwC. OTT video revenue will jump 61% from $58 billion in 2020 to $94 billion in 2025, according to the company's findings.

Another quicklygrowing media segment is video games and esports. PwC estimated that the video game and esports segmentrevenuecould rise another 32% over the samefive-year period.

Although virtual reality [VR] is still a small part of the overall pie, its hard to ignore the growth expected over the next several years. VR revenue jumped from just $401 million in 2016 to $1.85 billion in 2020. PwC predicts VR revenue will soar another 275% by 2025.

Thats not to say that linear TV or newspapers are going away anytime soon, but the growth in those segments should remain stagnant, at least over the next five years.

Linear TV revenues are expected to decline 6% from 2020 to 2025, while newspapers will see about a 3% decrease in revenues, PwC estimated. COVID hammered the movie theater business, which saw revenues plunge from $36 billion in 2016 to just $12 billion in 2020. With life slowly returning to normal, movie theater revenues are projected to recover a bit, to $43 billion by 2025.

As the digital media consumption trends continue, advertisers and marketers are following the money. Online advertising on a global scale is rising at a rapid clip. Since 2016, Internet ads grew a whopping 80%, to $336 billion in 2020, and that number is expected to reach $488 billion by 2025, according to PwC.

Video games and esports advertising revenue will rise 28% from 2020 to 2025, while ad revenue for music, radio and podcasts could surge 44% during the same time period.

TV advertising growth is expected to stay relatively muted; however, it will likely continue to sustain current levels through 2025.Even as traditional media such as television stagnate, overall ad revenues are expected to rise from $582 billion in 2020 to $798 billion in 2025, the report said.

Recovery is underway as the world begins to emerge from the COVID crisis, but not all entertainment and media segments will see the same level of rebound. The media companies that effectively adapt to rapidly evolving consumer tastes will be the ones that benefit most in the future.