AI-powered ads to boost global entertainment revenues to $3.5trn by 2029, says PwC

The growing use of AI-based advertising is set to boost global revenues in the entertainment and media (E&M) sector to $3.5 trillion by 2029, according to consulting giant PwC.

According to the firm’s Global Entertainment & Media Outlook 2025-29, published on Thursday, projected ad spend is set to grow three times faster than E&M consumer spending, with AI set to transform advertising models and promote hyper-personalisation.

The report says that advertising will be a major driver of revenue growth for the E&M industry as growth in paid or subscription products slows due to higher competition in the sector.

The fastest-growing E&M revenue figures over the next five years are all related to advertising, including retail advertising (15 per cent), streaming video advertising on social media and mobile devices (15 per cent) and in-stream Internet advertising on connected TV (14 per cent).

Digital formats, which account for 72 per cent of total advertising revenue in 2024, are forecasted to rise to 80 per cent in 2029, with new technologies, including AI and hyper-personalisation, expected to drive further growth.

Fast-growing areas include retail search advertising in e-shopping and advertising in video games.

Non-digital categories, such as live music, cinema and events, also continue to drive consumer sector revenues, accounting for 61 per cent of sector spending in 2024, with global cinema revenues expected to increase from $33 billion in 2024 to $42 billion in 2029, while global video game revenues are expected to grow from $224 billion in 2024 to $300 billion in 2029.

Bart Spiegel, global leader in entertainment and media at PwC US, pointed out that the emergence of advertising as the main source of income for the global industry represents a transformation that is likely to continue with the evolution of AI and the democratisation of content production.

“The E&M 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,” he added.

Wilson Chow, global technology, media and telecommunications (TMT) leader at PwC China said that if entertainment and media businesses are to capture new audiences and generate growth, they “must be thinking about the connected ecosystems in which they operate, leveraging the power of advertising and AI”.

He added that this combination is allowing for far more cost-effective and personalised content creation and engagement models.