For the entertainment industry, agility is key to growth

Today's audiences spend an ever-increasing amount time on digital platforms, especially mobile, and expect personalized, on-demand experiences. Traditional formats continue to lose ground, while newer models such as ad-supported streaming and in-game advertising gain momentum. At the same time, global competition and economic pressures are prompting companies in the entertainment industry, and larger media industry, to rethink how they attract and retain audiences.

This shift is more than a change in formats. It reorders the industry's growth engines. Some media businesses are already reshaping how they create value through advertising and streaming, while they are exploring AI's potential and new gaming models. PwC's Global Entertainment & Media Outlook 2025-2029 identifies agility as the defining trait of success. The U.S. is still in the lead. However, its future position depends on how effectively companies adapt to new business models and consumer expectations.

Connectivity is the backbone of the media & entertainment industry

Connectivity remains the backbone of the industry, providing the infrastructure for everything from streaming to gaming. According to PwC, U.S. spending in this category will reach $1.3 trillion by 2029, with mobile internet services leading the way. Some companies are leveraging this foundation to reach broader audiences and enhance engagement. As advertising accelerates, the balance between connectivity and ad spending is reshaping how value is measured across the sector.

Advertising emerges as the revenue growth engine

With connectivity as the foundation, advertising has become the primary driver of industry revenues. Internet advertising in the U.S. will increase steadily over the next five years, fueled by connected TV, retail media, and mobile video. With connectivity as a base, advertising continues to drive much of the sector's revenue growth.

Some U.S. companies are expanding into connected TV, retail media, and mobile video, and globally, advertising revenue is on track to surpass consumer spending. In the U.S., digital formats already capture the majority of ad dollars, and companies that are leaning into these channels are seeing the benefits of monetizing engagement over subscriptions.

Streaming shifts to hybrid models

Streaming remains central to media consumption, and many companies are already leveraging hybrid models that combine subscriptions and ad-supported services. While subscriptions are essential, much of the growth now comes from ad-supported services.

By the end of the decade, ad-supported video-on-demand will account for more than a quarter of total streaming revenue. Leaders like Netflix and Amazon are embracing hybrid models that combine subscriptions with advertising, which reflects consumers' appetite for more affordable options. This balance between cost and value is driving the next phase of streaming growth.

Gaming is becoming an entertainment industry powerhouse

Gaming is one of the fastest-growing segments of the entertainment industry, but some companies are still experimenting with monetization strategies, especially in mobile free-to-play formats. Global gaming revenues should rise sharply, outpacing both movies and music.

A growing share of gaming revenue is expected to come from advertising, particularly in mobile free-to-play games where consumers are embracing ad-supported experiences. Companies that blend gaming with social media and e-commerce are exploring entirely new pathways for monetization and audience engagement.

Cinema and live events remain resilient

Even with the rise of digital platforms, live experiences continue to hold significance for audiences - and the bottom line. Cinema, concerts, and other events still capture a majority share of U.S. consumer spending, underscoring the enduring appeal of shared experiences.

Box office revenues are predicted to climb in the coming years, bolstered by demand for locally produced films. Studios that diversify storytelling and innovate distribution models are positioning themselves to remain competitive even as global competition increases.

AI drives reinvention in the entertainment industry

Some companies are investing heavily in generative AI to enhance content creation, personalization, ad targeting, and production efficiency. In advertising, AI helps deliver more precise campaigns; in streaming, it improves recommendations and pricing strategies; and in gaming, it enables dynamic, adaptive experiences. These early adopters are uncovering new revenue streams and operational efficiencies.

PwC's outlook makes one point clear: agility is the key to success. Many media companies are already combining hybrid models with AI-driven innovation and emphasizing a sharp focus on consumer needs. Their long-term growth will come from rethinking revenue strategies, building stronger connections with audiences, and moving quickly when new opportunities emerge.