The global entertainment and media (E&M) industry is on a $3.5 trillion trajectory by 2029—but advertising, not subscriptions or ticket sales, is steering the ship. According to PwC’s Global Entertainment & Media Outlook 2025–2029, released today, ad spend will grow at a 6.1% compound annual growth rate (CAGR) over the next five years—three times faster than E&M consumer spending, which is forecast at a tepid 2%.
The message is clear: AI-powered advertising is becoming the industry’s new engine, driving hyper-personalized content and unlocking monetization channels once considered futuristic.
Advertising Rewrites the Revenue Script
As consumer wallets tighten and paid subscriptions plateau, brands are pouring budgets into advertising, especially on platforms that can deliver precision targeting. The top growth drivers?
- Retail advertising (15% CAGR)
- Social/mobile on-stream video ads (15%)
- Connected TV (CTV) advertising (14%)
CTV, in particular, is having a moment. Back in 2020, connected TV ads accounted for just 5.9% of traditional TV ad revenue. This year, it’s 22%. By 2029? PwC projects CTV ad revenues will hit $51 billion, closing in on 45% of what traditional broadcast TV pulls in—thanks in part to AI-assisted personalization that boosts viewer engagement and ad relevance.
Notably, digital ad formats dominate now and will only grow stronger, rising from 72% of total ad revenue in 2024 to 80% by 2029.
AI + Adtech = Growth Multiplier
AI isn’t just sprinkling efficiency on ad campaigns—it’s revolutionizing them. From real-time campaign optimization to automated content production and deep audience segmentation, AI is turning once-broad marketing into a science of one.
The surge in retail media networks—ads within online shopping platforms—is a key example. Retail search ad share is forecast to climb from 32.7% in 2020 to 45.5% in 2029. Meanwhile, in-game advertising is expected to rise from 32.8% to 38.5% over the same period.
This AI-enabled transformation lowers the cost of entry for brands and boosts returns by aligning ads with actual user behavior, not just generic demographics.
Offline Entertainment Still Pulls Real Dollars
Surprisingly, while digital dominates headlines, non-digital formats still dominate wallets. In 2024, offline categories like live music, cinema, and events accounted for 61% of E&M consumer revenue—a trend expected to continue.
Global cinema revenue is set to grow from $33 billion in 2024 to $41.5 billion by 2029, driven largely by demand for locally produced films. The dominance of the big five U.S. studios is slipping—they now hold just 51% of global box office share, down from over 60% pre-pandemic.
Gaming Outpaces Music and Movies—Combined
The global video games market, long the quiet titan of entertainment, is projected to grow from $224 billion in 2024 to nearly $300 billion in 2029, outpacing the combined revenues of both the movie and music industries.
With strong mobile adoption, monetization through ads, microtransactions, and the rise of immersive social gaming, video games remain a pillar of digital entertainment expansion.
Developing Markets Are Setting the Pace
While the U.S. remains the revenue heavyweight, its 3.8% CAGR lags behind the global average of 4.2%. Instead, emerging economies are doing the heavy lifting.
- China will grow at a 6.1% CAGR, largely from surging internet ad revenue (8.9%).
- India leads the pack with ad revenues growing at 15.9% CAGR, driven by 5G expansion, mobile-first engagement, and a social media boom.
- Indonesia and other Southeast Asian markets also clock in above 7.5%, showing that E&M’s future is being written in emerging regions.
Context, Not Just Content
In a media landscape overflowing with content, contextual delivery is the new differentiator. Audiences don’t just want more—they want personal, frictionless, and relevant. That means media companies must evolve from content creators to ecosystem builders, integrating data, AI, and adtech to stay ahead.
“Advertising is emerging as the global powerhouse of E&M revenue,” says Bart Spiegel, PwC’s Global Entertainment and Media Leader. But to win long-term, companies will need to “stay nimble, proactive, and focused on creativity and tailored content.”
In other words: the future belongs to those who can think like advertisers, act like technologists, and entertain like storytellers.
