The media and entertainment sector is on the cusp of a significant achievement, poised to reach a valuation surpassing $1 trillion in 2024, according to María Rua Aguete, Omdia’s senior research director. This remarkable growth is anticipated across diverse segments such as online video, cinema, music, and games, each contributing substantially to the industry’s overall expansion. The intricate dynamics within these segments highlight a sophisticated interplay of consumer preferences, technological advancements, and evolving business models, showcasing the industry’s resilience and adaptability in response to changing market conditions.
Key Insights from the Projection
Dominance of Advertising
The media and entertainment landscape continues to be underpinned by advertising, with online video advertising projected to become the primary revenue source by 2028. This shift underscores evolving consumption patterns favoring digital platforms over traditional media channels. The projected growth rates for online video subscriptions, TVOD, and online video advertising mirror the industry’s strategic pivot towards digital content and the growing significance of ad-supported models.
Emergence of Free Ad-Supported Streaming TV (FAST)
The Free Ad-Supported Streaming TV (FAST) market is experiencing rapid expansion, with revenue expected to witness a substantial increase from 2024 to 2028. The U.S. is anticipated to lead this growth, commanding a significant share of the $13 billion FAST market by 2028, while Western Europe and Latin America also show promise. This trend underscores the escalating demand for high-quality, free content and the strategic shift by media companies towards ad-supported streaming services as crucial revenue streams and audience engagement tools.
Consumer Behavior and Service Stacking
With the proliferation of streaming services, consumer behavior indicates signs of saturation, with paid video service stacking reaching a plateau. This shift is attributed to market maturation and increased consumer scrutiny of the value proposition offered by multiple subscriptions. The ascent of free services within the service stacking paradigm signifies a broader trend towards diversification in content consumption patterns, reflecting the dynamic interplay between paid and free content offerings to capture and retain audience attention.
Global Landscape
The Latin American market, anticipated to reach $53 billion by 2028, exemplifies the robust expansion of digital media. This narrative of growth is complemented by the strong performance of gaming, with advertising in this segment poised for a 25.4% increase, emphasizing the region’s heightened role in the global evolution of the media ecosystem.
Implications of the Projection
The projected growth of the media and entertainment industry holds far-reaching implications for various stakeholders, including content creators, advertisers, and consumers. The industry’s increasing emphasis on digital content, ad-supported models, and shifting consumer behavior underscores the ongoing transformation and innovation within the sector. As the industry evolves, a nuanced understanding of advertising, digital content, and consumer preferences becomes essential for navigating the dynamic landscape and capitalizing on emerging opportunities.
In conclusion, the anticipated surpassing of a $1 trillion valuation by the media and entertainment industry in 2024 reflects its robustness, adaptability, and the continual convergence of advertising, digital content, and consumer preferences. This expected milestone underscores the industry’s resilience and its strategic shift towards digital content and ad-supported models, signaling a new narrative characterized by innovation and a keen awareness of evolving market dynamics.