India is projected to be the world’s fastest-growing OTT video-streaming market between 2024-28 with total revenue hitting $4.3 billion in 2028, a new research by consulting firm PwC stated yesterday, adding global advertising revenue will hit $1 trillion in 2026 as streaming services look to consolidation and live sports to drive growth.

The report, interestingly, also pointed out that though the merger of Disney Star with Reliance-led Viacom18 is the big ticket merger, the Indian OTT market is ripe for consolidation now.

PwC Global Entertainment & Media Outlook 2024-28 report, released yesterday, observed, “After several challenging years, in February 2024, Disney’s Star India struck a US$ 8.5 billion merger with Viacom18, a unit of the conglomerate Reliance Industries, which owns the larger Jio OTT platform.

“India’s fragmented OTT market — which will be the world’s fastest growing in the next five years, with total revenue hitting US$4.3 billion in 2028 — is ripe for consolidation, with around 101 million paid subscribers and 58 OTT platforms, about half of which are regional players operating in local languages.”

Among the larger markets showing rapid growth, the clear stand-outs are Indonesia and India, followed by China, at a 7.1 percent CAGR. By 2028, China’s advertising and consumer spending revenues ($362.5 billion) will be less than half of those in the US ($808.4 billion). Each of these territories has its own distinctive market dynamics.

And China’s continued strong growth means it’s steadily closing the gap on the US in terms of market size, although tight government regulation can make investing there more complex than in other territories.

Among other international trends and forecasts, the PwC report said the global entertainment & media (E&M) industry revenues rose 5 percent to $2.8 trillion in 2023 and projected to hit $3.4 trillion in 2028.

Advertising revenues are projected to top $1 trillion in 2026, with revenues in 2028 to represent double the revenues of 2020.

Streaming service usage and uptake continues to rise, but market players look to consolidation, live sports, password-sharing crackdowns and ad-based revenue to drive growth as industry competition intensifies.

Gaming remains among the fastest growing E&M sectors globally, largely driven by Asia-Pacific where revenues are expected to top $300 billion in 2028. In-person events such as global cinema projected to return to pre-pandemic levels as live-music buoyed by global tours.

Global E&M industry looks to generative AI to drive new revenue streams and transform business models

“Despite economic headwinds, technological disruption and increased geographic and industry competition, the global entertainment & media industry has continued to grow in 2023, with total revenues rising 5 percent in 2023 to $2.8 trillion – outpacing overall economic growth cited by the IMF,” the report said.

The outlook, which covers 11 revenue segments across 53 countries and territories, finds that global E&M revenues are projected to hit $3.4 trillion in 2028, growing at a 3.9 percent compound annual growth rate (CAGR).

The outlook also found, according to a media statement put out by PwC, streaming services, traditionally dependent on subscription models, face increased competition and challenges in consumer use and uptake, and are looking to consolidation, live sports (including mega-events like the Summer Olympics), a crack-down on password sharing, and ad-based models to drive growth.

Looking across the globe, the US remains the world’s largest consumer spending and advertising market (4.3 percent CAGR to 2028), representing more than one-third of global spending in 2023. However, other large markets including China (7.1 percent) and India (8.3 percent), and less mature markets such as Indonesia (8.5 percent) and Nigeria (10.1 percent), are growing more quickly.

Werner Ballhaus, Global Entertainment & Media Leader, PwC Germany, said: “As the global entertainment & media industry continues to grow, market players face both risks and opportunities. Shifts in consumer preferences, and uncertainty around the continued impact of digital transformation and new and emerging technology such as Generative AI, are inspiring a wave of business model reinvention.

If market players are to gain their share of the growing revenue pools we identify, they will have to reimagine how their company creates, delivers, and captures value, leveraging the growth of advertising while also harnessing the powerful opportunity presented by AI. As consumers increasingly consume content online, companies will also need to diversify their product-offerings and continue to connect with consumers on the platforms where they spend more of their time.”

Global subscriptions to over-the-top (OTT) video services will rise to 2.1 billion in 2028 from 1.6 billion in 2023, representing a 5 percent CAGR. Global average revenue per OTT video subscription is barely expected to grow, rising from $65.21 in 2023 to $67.66 in 2028.

This plateauing effect is pushing leading streamers to reshape their business models and find new revenues beyond subscriptions, including the introduction of ad-based variants (reduced subscription fees with ad-filled content.

By 2028, advertising will account for about 28 percent of OTT global streaming revenues, up from 20 percent in 2023.

Global gaming, which includes e-sports (competitive gaming with professional tournaments and live spectators), continued its streak as one of the fastest-growing large sectors in the E&M universe, with total revenue hitting $227.6 billion in 2023, up 4.6 percent.

The report pointed out that revenues were on track to top $300 billion in 2027, almost double its level in 2019. Asia-Pacific remains the largest regional market for gaming, representing 48.1 percent of the segment’s global total, rising to 54.4 percent – or $181.8 billion – in 2028.