The entertainment industry has shown impressive growth in recent years, with a market size valued at USD 90.92 billion in 2021. Experts predict that this trend will continue with a compound annual growth rate (CAGR) of 7.2% from 2022 to 2030. The market has been fueled by several factors, including favorable demographics, changing consumption patterns, and increased disposable incomes. People are more inclined to spend on leisure and entertainment, which has contributed to the industry's expansion.
Unfortunately, the COVID-19 pandemic has had a significant impact on the growth of the entertainment market. Due to the various guidelines implemented in response to the pandemic, many theaters have been forced to close, hampering the industry's growth. According to a blog published by Livemint, nearly 10,000 theaters closed from mid-March of 2020, and a major American movie theater chain announced the temporary closure of hundreds of locations in the U.S. and the U.K.
Despite the challenges posed by the pandemic, the entertainment industry remains resilient, with the rising popularity of 3D movies providing audiences with an immersive virtual reality experience. In addition, new marketing and distribution platforms, such as IPTV, digital newspapers, DTH, and digital cable, as well as online music and movie sales, are expected to further accelerate industry growth.
Streaming platforms have revolutionized the way we access music and video content, making it more widely available than ever before. This accessibility, combined with superior sound quality and the ability to create personalized playlists, has contributed to the growth of the market. As a result, millennials are increasingly turning to these platforms, further driving market expansion.
To capitalize on this growth, major players in the industry have adopted strategic measures like regional expansions and distribution partnerships to enter new markets. They are also focusing on producing content that appeals to regional audiences, establishing a strong connection with them. For example, in February 2021, Disney+ launched the Star brand in several countries including Australia, New Zealand, Western Europe, and Canada, highlighting the importance of catering to local preferences and tastes.
The entertainment industry has witnessed a surge in fresh talent, thanks to the ease of reaching a large audience via various channels such as television and the internet. With the increased usage of mobile communication and the internet in countries like China, South Korea, and India, emerging areas are becoming the driving force of industry growth, offsetting the global market stagnation caused by the saturation of major markets such as the United States.
However, the industry faces several challenges, including the high piracy rates and lower profit margins that come with online streaming. Despite this, the number of new players entering the online streaming business is on the rise. To mitigate these issues, cybersecurity laws are being developed, and legal actions against piracy are being tightened to reduce losses for industry players. These developments are expected to positively impact revenue generation in the long run.
When it comes to revenue, movies take the top spot, accounting for 55.4% of the market share in 2021. It's no secret that movies have become an integral part of cultures worldwide, serving as a primary source of entertainment for people of all ages. With advancements in technology, faster production times, enhanced quality, and more efficient storage solutions, the movies segment is poised for further growth. These factors have all contributed to the prominence of movies in the industry and their continued success.
Companies are taking strategic measures such as launching new products to cater to the changing needs of customers and stay ahead of the competition. One such example is beIN Media Group, LLC, which in April 2020 launched a new cinema service that provides the latest international movies. Through groundbreaking collaborations with film distributors, the company can offer subscribers the latest movies even before they hit the theaters.
The music and videos segment is expected to see a significant CAGR of 7.5% during the forecast period, largely attributed to the operational strategies of music companies. Partnerships with online streaming service providers and radio broadcast companies are driving this positive growth. For instance, in November 2021, Netflix partnered with Spotify to enter the audio market. This move by Netflix aims to centralize audio productions related to Netflix content, thereby diversifying its offerings and attracting more users to its platform.
The music and video segment is set to experience positive growth in the coming years, thanks in part to the rising popularity of digital platforms and the increasing use of smart devices. Consumers are increasingly turning to music streaming platforms like Gaana, JioSaavn, Spotify, Wynk Music, Google Play Music, and Apple Music to fulfill their entertainment needs. These platforms are gaining immense popularity among users and driving growth in the industry. This trend is likely to continue as more consumers embrace digital technology and seek new ways to access music and video content.
In 2021, North America held the largest share of the movies and entertainment market, accounting for 34.5% of the global revenue. This can be attributed to the region being home to Hollywood, which is the most well-established film industry in the world. Additionally, the high number of movie screens in the region contributes to its larger share of the revenue. According to the National Association of Theatre Owners, there were 40,998 movie screens in the United States in 2020.
On the other hand, Asia Pacific is expected to register the highest compound annual growth rate (CAGR) of 8.2% from 2022 to 2030. The growth is mainly driven by the increasing expenditure of consumers on leisure and entertainment. Furthermore, the focus of key players on untapped markets such as India is contributing to the market growth in the region.
Furthermore, rivals are seen to focus on creating local content to boost their sales in these areas. The increasing demand for Chinese, Japanese, South Korean, and Indian movies & music is projected to drive the market further. Moreover, the rising recognition of music & videos from other emerging nations like India, the Philippines, Vietnam, and Australia is also expected to bolster the market growth in the region.
The market exhibits the coexistence of established players and new entrants. Several major players are capitalizing on the emerging trend of movies & entertainment. To maintain their market share, players are expanding their service offering and diversifying their product portfolios.
The movies & entertainment market is witnessing positive growth due to several factors such as the availability of music and video content on streaming platforms, the rising popularity of digital platforms, and the increasing adoption of smart devices. In terms of revenue, movies dominate the market, and the presence of Hollywood in North America contributes to its larger share of the revenue. However, the Asia Pacific region is expected to register the highest CAGR of 8.2% from 2022 to 2030 due to the rising expenditure of consumers on leisure and entertainment and the shifting focus of key players towards untapped markets such as India. Additionally, players in the market are diversifying their service offering to maintain market share. Various strategic initiatives such as product launches and partnerships with online streaming service providers and radio broadcast companies are helping companies address the evolving needs of customers and gain a competitive edge over other players.
