AI ads to drive entertainment media industry to $3.5T by 2029

Artificial intelligence-powered advertising is expected to drive the global entertainment and media industry to $3.5 trillion in revenue by 2029, according to a new PwC report. This growth comes at a critical time when economic uncertainty and inflation are forcing consumers to cut back on entertainment spending, making advertising revenue increasingly vital for industry survival.

The big picture: The entertainment and media industry is projected to achieve a 3.7% compound annual growth rate through 2029, with AI-driven advertising serving as the primary growth engine alongside non-digital categories like live events.

Why this matters: Economic pressures from inflation and shifting trade policies are prompting consumers to reduce spending on entertainment subscriptions, movie outings, and digital media, creating revenue challenges across the industry.
• Advertising is emerging as the key solution to offset declining consumer spending, essentially subsidizing entertainment costs for budget-conscious audiences.

Key digital transformation: Digital advertising formats will dominate the landscape, expanding from 72% of overall ad revenue in 2024 to 80% by 2029.
• AI and hyper-personalization technologies are expected to drive increased adoption among consumers by delivering more targeted, relevant advertisements.
• Connected TV advertising revenue alone is forecast to reach $51 billion in 2029, fueled by higher digital engagement rates.

Gaming drives additional growth: Video games revenue is projected to reach approximately $300 billion by 2029, providing another significant revenue stream for the broader entertainment ecosystem.

What they’re saying: “There’s certain general macroeconomic pressures on individuals, families and advertising starts to subsidize a lot of that,” said Bart Spiegel, global entertainment and media leader at PwC U.S.
• Spiegel emphasized that the industry “has always been at the forefront of technological innovation, but companies will need to remain nimble and proactive to embrace the future and satisfy consumers in an ecosystem that rewards creativity and tailored content.”