Music Global Entertainment & Media Market to Hit $3.5 Trillion by 2029 Fueled by AI-Powered Advertising
The global entertainment and media (E&M) industry is on track to reach $3 trillion in revenue by 2024 and is expected to grow to $3.5 trillion by 2029. This growth, at a compound annual growth rate (CAGR) of 3.7%, is driven largely by surging advertising spend across multiple platforms. While this growth rate exceeds the average global economic growth, it still falls short of pre-pandemic levels. Factors like economic uncertainty and slow consumer spending growth, combined with increased competition, are expected to moderate industry expansion through 2029.
Advertising emerges as the key engine for revenue growth, powered by AI innovations. As paid subscriptions and direct consumer spending slow, especially in mature markets, advertising is set to become the primary driver of revenue growth in the E&M sector.
Advertising Growth Outpaces Other Categories
Among the three main categories—connectivity, advertising, and consumer—advertising is projected to grow the fastest with a 6.1% CAGR, triple the 2% growth expected in consumer revenues. Key advertising formats leading this surge include retail advertising, social and mobile on-stream video ads, and connected TV in-stream internet advertising, each growing around 14-15% annually.
Digital advertising already accounts for 72% of total ad revenue in 2024 and is projected to climb to 80% by 2029. Technologies like AI and hyper-personalization are expected to push this share even higher. Retail search advertising in e-commerce and advertising in video games are also notable growth areas, with significant increases forecasted over the next five years.
Connected TV advertising is a standout example of AI's impact. It grew from representing just 5.9% of traditional broadcast TV ad revenue in 2020 to 22% in 2024. By 2029, connected TV ad revenues are expected to reach $51 billion, making up 45% of traditional broadcast TV advertising revenue. Despite connectivity remaining the largest category—mainly driven by mobile internet services—advertising spend is closing the gap rapidly.
Non-Digital Consumer Spending Remains Strong
While consumers spend more time online, a majority of entertainment budgets still flow toward offline experiences. Non-digital formats accounted for 61% of consumer revenue in 2024, a trend expected to continue. Cinema box office revenue, for example, is expected to rise from $33 billion in 2024 to $41.5 billion in 2029, with a growing preference for locally produced films. The market share of the top five US studios declined from over 60% pre-pandemic to 51% in 2024, indicating a shift in consumer tastes.
Video Gaming Remains a Bright Spot
The video gaming industry continues to outpace other entertainment sectors, with revenues of $224 billion in 2024 and projected growth to nearly $300 billion by 2029 at a 5.7% CAGR. This growth cements gaming as a major contributor to the overall E&M industry expansion.
Developing Markets Lead Growth
Excluding connectivity revenues, the US remains the largest E&M market but is expected to grow at 3.8% CAGR, below the global average of 4.2%. China, the second-largest market, is forecast to grow at 6.1%, driven by an 8.9% CAGR in internet advertising.
Markets like India and Indonesia are growing the fastest, with CAGRs above 7.5%. India’s internet advertising segment is especially dynamic, growing at a 15.9% CAGR due to rising internet penetration, 5G connectivity, and the popularity of social media and short-form videos.
Marketing Takeaways
- Advertising, especially AI-driven and digital formats, will be the main source of growth in the E&M industry.
- Connected TV and retail search advertising offer promising avenues for marketers to explore new revenue streams.
- Despite digital growth, offline consumer spending on entertainment remains significant—local content and live experiences are key areas.
- Emerging markets present high-growth opportunities, especially in internet advertising fueled by expanding digital infrastructure.
- Video gaming continues to outperform other sectors, making it a critical focus for entertainment marketing strategies.
Staying ahead means embracing AI technologies to deliver personalized, cost-effective content and advertising experiences. For marketing professionals looking to deepen their AI expertise and boost campaign performance, exploring specialized AI courses can be a valuable step. Check out Complete AI Training’s latest AI courses to enhance your skills in this evolving landscape.
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