…PwC: Ads, esports, metaverse, AIGC, VR, games, films to ride supportive policies
Total revenue of China’s #entertainment and media industries is expected to reach around $480 billion by 2027, with a compound annual growth rate of more than 6 percent till 2027, a new report from global consultancy PwC has estimated.
It was gathered that the total revenue of China’s entertainment Internet advertising, video games and esports sectors are going to be the main drivers of growth in the entertainment and media industries in China, while other sectors such as film and virtual reality will likely witness robust growth in the coming years.
The PwC report said the revenue of China’s internet advertising market will likely exceed $146 billion in 2027, with a CAGR of 9 percent, as new formats for advertising like short videos and livestreaming have brought fresh growth streams to internet advertising.
China’s Generation Z — those born between the mid-1990s and the early 2010s — are gradually becoming the mainstream consumers, and prefer to watch personalized advertising.
Internet advertising has gained an upper hand over traditional advertising. The wide coverage of 5G networks also provides advertisers with a mature, stable and enormous end-user market, the report stated.
Notably, spending on mobile internet advertising is on course to dominate the growth of China’s internet advertising industry, with its share in the total internet advertising revenue predicted to increase to 84 percent by 2027. The application of AI technology will likely further enhance user experience and further improve the production and dissemination of advertising, given that major technology companies are investing in and developing tools such as ChatGPT-like chatbots and AIGC.
AI and 5G technologies will have a profound impact on advertising, as companies could use targeted advertising by analyzing big data on consumption habits and consumer lifestyles, and create precise user portraits, so as to increase sales of products and brand awareness, said Ji Hairong, executive director and chief marketing officer of Focus Media, one of China’s largest offline advertising solutions provider.
Cecilia Yau, PwC’s Chinese mainland and Hong Kong media leader, said this year could mark a significant turning point for the entertainment and media industries, with their growth rates projected to return to pre-COVID levels.
Yau also said a wide range of companies are harnessing AI technology to improve productivity and creativity, and their products and services have become more digitalized, which also helps reduce production and distribution costs, and transforms business models and technological applications for the better.
The PwC report also said box-office revenue for films in China will return to the pre-pandemic levels in 2024, and the country is expected to surpass the US to become the world’s largest movie market between 2024 and 2025.
The country will likely account for 27 percent of global box-office revenues for films in 2027, more than the 23 percent of the US, PwC said, estimating that China’s total cinema revenue will reach $13.2 billion by 2027, with a CAGR of nearly 24 percent over the next five years.
Aileen Mo, PwC Chinese mainland entertainment and media industry partner, said: “Most of China’s entertainment and media players have recovered in 2023.
“The metaverse and VR (virtual reality) have become focal points as local governments have rolled out a string of supportive policies, which will continue to foster the application and development of innovative technologies.
“Looking ahead, artificial intelligence-generated content, or AIGC, and naked-eye 3D technologies will generate more diverse content, with AI technology playing a more influential role in various fields.”
The naked-eye 3D refers to the technology that achieves stereoscopic visual effects without external tools.
China is already the world’s largest video game and esports market, with the revenue from this sector expected to grow at a CAGR of more than 13 percent to $115.5 billion by 2027, the report said.
Chinese games are increasingly looking to expand into overseas markets. In the coming years, China’s video game exports will continue to grow significantly, becoming larger than counterparts from the US, Japan and South Korea, driven by the rapid growth of mobile app-based games.
(China Daily)