The entertainment and media sector will experience strong growth in China

A visitor checks out a video game with virtual reality equipment during an exhibition in Guangzhou, Guangdong Province. SHI LEI / FOR CHINA DAILY

PwC: Total industry revenue to lead the world, reaches $ 358.6 million this year

The total revenue of the Chinese entertainment and media industry is estimated to be around $ 358.6 billion this year and is expected to reach $ 436.8 billion in 2025, with a compound annual growth rate that would reach at 5.1 percent, higher than the overall rate of 4.6 percent, according to a new report. of the global accounting firm PwC.

China will lead the world in terms of average revenue growth in segments such as virtual reality, over-the-counter (OTT) video and Internet advertising, according to the report.

“China’s entertainment and media industry is recovering faster than the rest of the world. With the relaxation of COVID-19 restrictions, cinema, live music and trade shows will experience strong growth in 2021,” he said. said Aileen Mo, PwC Chinese Entertainment and mainland media industry partner.

In the coming years, along with the continuing impact of the COVID-19 pandemic and technological innovations, fierce competition from the Chinese entertainment and media industry will experience a huge shift, Mo said, and add that market share of virtual reality and OTT revenue is expected to continue to grow videos.

In addition, the rapid development of 5G and the Internet of Things has driven the growth of Internet advertising. The report noted that China’s Internet advertising revenue will reach approximately $ 117.5 billion by 2025, with a compound annual growth rate of 10.1 percent.

It should be noted that spending on mobile internet advertising will dominate the growth of the Chinese internet advertising industry, with a share of total internet advertising revenue rising to 66% in 2025.

China’s OTT video market revenue is expected to reach $ 17.3 billion in 2025, with a compound annual growth rate of 11.86 percent, which is faster than the growth rate global, according to the report.

Cecilia Yau, leader of Chinese media at Mainland PwC and Hong Kong, said consumers are gaining more power as they now watch more content, such as new movies, live broadcasts and online concerts via OTT video platforms , and are diversifying their consumption scenarios. These changes in consumer behaviors are influencing the entertainment and media industry, Yau added.

Due to the impact of the pandemic, the number of people going to cinemas in China fell in 2020, but the industry has recovered very well overall. Since August 2020, the country’s film industry has begun to gradually recover.

The report said that by December 2020, China’s box office revenue had returned to $ 2.9 billion, recovering to 92.4 percent from the level in the same period in December 2019, and the number of film fans also rebounded sharply to 1.4 billion in 2021.

In terms of revenue, China and the United States remain the two largest film markets in the world. China’s film revenue is projected to account for 23.5 percent of global film revenue of $ 47 billion by 2025, up from just 24.1 percent in the United States, PwC said.

“Looking to the future, Sino-foreign cooperation in film production will continue to flourish, becoming the main future development trend of the Chinese film industry. In addition, with the rapid development of new technologies in virtual reality and augmented reality, artificial intelligence and biotechnology, the fiction film industry will continue to advance, ”said Emily Liu, PwC’s mainland media and entertainment industry partner.

In addition, China is the largest video game and sports market in the world, with combined revenues reaching $ 31.5 billion by 2020. The annual growth rate composed of video games and sports is estimated to reach 4.9% and at 12.3%, respectively, from 2021 to 2025, the report said.

Meanwhile, the revenue share of application-based social and casual gaming in China is expected to reach 71.8 percent of global video game revenue by 2025, and the revenue share of rights and sponsorships is expected to increase. China’s sports media total sports will reach 75.1 percent. 2025 in the domestic market.

The growth rate of Chinese mobile games in overseas markets has been increasing year after year since 2017. In 2020, the scale of China’s overseas gaming market increased by 33.25 percent year-on-year. The report added that in the future, the potential of the overseas market is still huge and the launch of overseas video games will drive revenue growth for platform operators.

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