China's entertainment and media industry set to pass US$479 billion by 2027
China's entertainment and media industry is expected to show greater growth momentum with the total market size estimated to reach US$479.9 billion by 2027, and Internet advertising, video games and e-sports are the main growth drivers.
The total market size in China's mainland is estimated to record compound annual growth rate at 6.1 percent over the next five years, higher than the average global rate of 3.5 percent, according to the latest PwC's annual Global Entertainment and Media (E&M) Industry Outlook.
This year marks a key turning point for the entertainment and media industry, and a gradual recovery to the pre-pandemic growth rate is estimated starting from 2024.
A wide range of companies are now harnessing technology, in particular, artificial intelligence (AI), to improve productivity and creativity.
More than a dozen local digital service providers have released local versions of large language models (LLMs), covering all types of industries.
China's Internet advertising market will gradually stabilize and is expected to reach US$146.4 billion by 2027, benefiting from the large market size and scope.
Mobile Internet advertising spending will be a major contributor and its revenue share is estimated to increase to 84 percent of overall online ad spending in five years from the current level of 72 percent.
The rise of data computing on short-video social platforms has led to more accurate advertising placement, and the maturity of the value chain, innovation, and expansion methods in Internet advertising are helping to drive the rapid growth of the segment.
"Advertising spending on performance-based formats would continue to pick up and video streaming platforms need to balance their operations and user experience as the growth of online viewers is gradually slowing down," said PwC China's mainland Entertainment and Media Partner Frank Lin.
"The reliance on the Internet has increased significantly after the pandemic, and the wide adoption of AI technology and major tech companies investing and developing tools like ChatGPT-style large language models would further improve and optimize user experience and ad effectiveness," he added.
Box office revenue in China is expected to return to pre-pandemic levels in 2024 and might surpass the United States by 2025.
By 2027, China is expected to account for 27 percent of global box office revenue to become the world's largest market.
In the first quarter, recovery signs already emerged as the number of moviegoers rebounded for the first time since 2019, with a year-on-year jump of 9.4 percent.
The burgeoning of virtual reality technologies and metaverse industries in 2023 has been backed by country-level policy incentives, and artificial intelligence-generated content and other emerging technologies will further enrich the production of VR/metaverse content and engage more users, creating a virtuous circle of industrial development.
