AI-Powered Advertising to Fuel Global Entertainment and Media Growth, PwC Reports

July 24, 2025 - The global entertainment and media industry is on the cusp of a transformative era, with artificial intelligence (AI) in advertising projected to drive revenues to an impressive $3.5 trillion by 2029, according to PwC’s Global Entertainment & Media Outlook 2025-29, released on Thursday. The industry is expected to grow at a compound annual growth rate (CAGR) of 3.7% over the next five years, fueled by a combination of cutting-edge digital innovations and resilient non-digital sectors, such as live events and experiential entertainment. This growth comes at a time when economic pressures are reshaping consumer behavior, making advertising a pivotal force in sustaining the industry’s momentum.

Economic uncertainty, driven by persistent inflation and shifting global trade policies, has led consumers worldwide to tighten their budgets, particularly for non-essential spending like streaming subscriptions, movie theater visits, and digital content purchases. As discretionary spending declines, entertainment and media companies are increasingly turning to advertising to bridge the revenue gap. AI-powered advertising, in particular, is emerging as a game-changer, enabling hyper-personalized campaigns that resonate with audiences and maximize engagement. By leveraging AI to analyze consumer preferences and deliver tailored content, companies are unlocking new opportunities to capture market share in a highly competitive landscape.

In 2024, digital advertising formats accounted for 72% of the industry’s total ad revenue, a figure that PwC projects will climb to 80% by 2029. This shift is driven by the adoption of advanced technologies, including AI and data-driven personalization, which are revolutionizing how brands connect with consumers. Connected TV (CTV), a rapidly growing segment, is expected to see advertising revenue soar to $51 billion by 2029, propelled by the surge in digital engagement across streaming platforms. The rise of CTV reflects a broader trend toward digital consumption, with consumers spending more time on platforms that integrate seamlessly with their daily lives, from smart TVs to mobile devices.

Beyond advertising, the video game industry is poised to be a significant contributor to the sector’s growth, with revenues forecasted to reach $300 billion by 2029. The gaming sector’s robust performance is driven by innovations in immersive technologies, such as virtual reality and cloud gaming, as well as the growing popularity of esports and in-game monetization models. These developments underscore the industry’s ability to adapt to changing consumer preferences while capitalizing on technological advancements.

“The entertainment and media industry is navigating a complex landscape shaped by macroeconomic pressures,” said Bart Spiegel, PwC U.S. global entertainment and media leader. “Advertising, particularly when powered by AI, is playing a critical role in subsidizing access to content for consumers facing financial constraints. This allows companies to maintain growth while delivering value to their audiences.” Spiegel emphasized that the industry has long been a pioneer in technological innovation, from the advent of streaming to the integration of AI-driven analytics. However, he cautioned that staying ahead requires agility and a commitment to meeting consumer demands for creative, relevant, and personalized content.

As the industry evolves, companies must balance innovation with adaptability to thrive in an ecosystem that rewards creativity and consumer-centric strategies. The rise of AI-powered advertising, coupled with growth in non-digital sectors like live events, positions the entertainment and media industry for a dynamic future. By embracing these trends, companies can not only weather economic challenges but also redefine how they engage with audiences worldwide.

Reporting by Harshita Mary Varghese in Bengaluru; Edited by Shilpi Majumdar

Source: PwC Global Entertainment & Media Outlook 2025-29

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