Entertainment, media revenue growth to slow down anew: PwC

The compound annual growth rate will be slower than the global rate.

In the next four years, the entertainment and media (E&M) revenue increase in Hong Kong is projected to be at a compound annual growth rate (CAGR) of 3.5% to $86.3b (US$11b), which is slower than the global rate of 4.6%, PwC’s Global Entertainment & Media Outlook showed.

PWC also said the market’s E&M revenue is expected to increase 5% year-on-year from $71.3b (US$9.09b) to $74.8B (US$9.54b) in 2022 on the back of the market’s revival from the pandemic in 2021.

But for PwC experts, Hong Kong’s E&M industry’s revenue growth will slow down again following the fifth wave of the pandemic.

“Whilst development trajectories vary by market segment, cinema and trade shows will be slower in picking up due to COVID-19 social distancing measures,” Cecilia Yau, PwC Mainland China and Hong Kong Media Leader, said.

The internet advertising segment is moving to mobile due to the speeding up of 5G application and usage. With this, digital advertising will account for more than 60% of the market in the next four years.

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In 2021, the total revenue of internet advertising in Hong Kong was almost $11b (US$1.4b), which is seen to grow at a CAGR of 7.5% to reach $15.7b (US$2.01b) in 2026.

The cinema market rebounded to $1.2b (157m) in 2021 because of loosened social distancing measures in February last year. 

“It is expected to surpass the pre-pandemic level by 2024, and continue to grow at a 11.3%  CAGR to reach $2.1b (US$269m) by 2026,” said PwC.

Meanwhile, the video games industry accounted for 15.2% of the total E&M revenue in 2021, making it the third-largest segment. 

Hong Kong’s video games market reached $10.83b (US$1.38b) in 2021, and is projected to increase at a CAGR of 6.3% and will be valued at $14.6b (US$1.87b) by 2026.

The PwC is also seeing Hong Kong’s efforts to enter the metaverse such as the artefact non-fungible tokens based on historical news archives created to monetise iconic media assets and preserve history on the blockchain. 

It also cited that media, entertainment, and real estate firms are entering virtual communities on blockchains and offering gamified experiences in the metaverse. 

$1 = US$0.13