The global media and entertainment industry is poised for significant transformation by 2025, driven by technological innovation and evolving consumer habits, according to a new industry outlook from PwC. The report highlights a landscape undergoing fundamental shifts, where traditional models are being challenged and new strategies are emerging to capture audience attention and revenue.
Advertising Takes Center Stage in Revenue Expansion
A key finding from PwC’s analysis reveals the growing strategic importance of advertising. Projections indicate that advertising is anticipated to contribute a substantial 55% of the total revenue expansion within the media and entertainment sector over the next five years. This forecast underscores advertising’s critical role, moving beyond a supplementary income stream to become a core element of companies’ growth strategies.
Digital advertising is identified as a primary engine within this trend, with particular emphasis on growth areas such as connected TV and retail platforms. The report points to the increasing traction of innovative ad formats designed to engage audiences more directly. These include shoppable TV ads, which allow viewers to purchase products featured in content; non-video display ads, indicating diversification beyond traditional video formats; and the continued rise of influencer campaigns, leveraging social media personalities to reach targeted demographics.
Navigating a Saturated Streaming Market
While streaming has dominated the industry narrative for years, the PwC outlook notes that the market has reached a point of saturation. This maturity is evidenced by slowing subscription growth rates, prompting streaming platforms to actively seek alternative revenue streams beyond their core subscription models. A notable strategic response is the introduction of ad-supported “hybrid tiers.” These models aim to attract price-sensitive consumers while creating new advertising inventory, effectively blending subscription and advertising revenues to sustain growth and profitability in a competitive environment.
Executives Grapple with Business Model Viability
The rapid pace of change is creating uncertainty at the highest levels of the industry. A survey conducted by PwC as part of its outlook indicates that a significant majority of executives hold concerns about the long-term viability of their current operational frameworks. Specifically, 57% of executives surveyed believe that their existing business models may not remain sustainable over the next decade. This statistic highlights the urgent need for strategic re-evaluation and innovation across the sector to adapt to evolving market dynamics, technological advancements, and changing consumer expectations.
Future Growth and Strategic Focus Areas
Despite the challenges and necessary pivots, the overall trajectory for the media and entertainment industry remains positive. PwC’s industry outlook forecasts robust growth, projecting total industry revenue to exceed $3.4 trillion by 2028. This substantial figure reflects the vast scale and economic impact of the sector, even as its internal mechanics undergo transformation.
Looking specifically at significant trends for 2025, the report identifies several key areas of focus. Beyond the dominance of advertising and the evolution of streaming, companies are increasingly concentrating on serving niche audiences and capturing micro-moments of consumer engagement. This signals a move towards more personalized and contextually relevant content and advertising experiences. Furthermore, the emphasis on broader business model innovation indicates a sector actively experimenting with new ways to create, distribute, and monetize content, adapting to a complex digital landscape and shifting consumer preferences.
Conclusion: Pivots Propel the Industry Forward
The media and entertainment industry in 2025 and beyond is characterized by dynamic change. PwC’s outlook underscores a period of significant big pivots, driven fundamentally by the resurgence and strategic centrality of advertising, the necessary evolution of streaming models, and a collective executive recognition of the need for innovation. As new technologies continue to emerge and consumer behaviors evolve, the industry’s ability to successfully navigate these trends, focus on targeted engagement, and embrace new business models will be crucial in propelling it towards the projected $3.4 trillion revenue mark by 2028.
