The entertainment industry is a massive force in consumer culture, boasting a staggering $2 trillion in global revenues. More than a third of this revenue comes from media and entertainment companies in the United States, and while the industry is rapidly expanding into new areas, there are some troubling indicators on the horizon.
A broad spectrum of activities falls under the umbrella of the media and entertainment (M&E) industries, which generated sales of $717 billion in the United States in 2018. Predictions suggest that this figure will reach $825 billion by 2023. M&E covers various industry types, including the film, music, book publishing, and video game industries.
The film industry generates the bulk of its activity and revenue from movies, television shows, and video production, earning almost $110 billion in 2019. The music industry, which encompasses recorded music, live concerts and tours, and various delivery mechanisms, made approximately $22 billion in 2019 and is projected to continue growing. Book publishing is a $38 billion business in 2018 and represents a fast-changing commercial landscape with the lion's share of the market held by popular consumer books, followed by educational and professional books. The video game industry reached $26 billion in revenue in 2019, driven by various devices such as phones, computers, game consoles, and virtual reality gear. The industry's momentum has been boosted by the growing popularity of esports (competitive gaming) and gambling games.
One disruptive trend in the M&E industry is video streaming, which has exploded in recent years. Deloitte predicts that this trend will continue to reshape the industry in the coming years, with mergers and acquisitions, and potential business failures. The video streaming market is dominated by Netflix, but Amazon Prime, Apple TV, YouTube, Disney, and many others are competing, creating uncertainty over which will emerge as leaders in the long run.
Virtual reality systems and their close relative, augmented reality (VR/AR), have yet to fully meet analysts' expectations but may be coming into their own in the next few years. Billions of devices worldwide are running VR/AR apps, and VR/AR is increasingly used in instructional settings.
The M&E industry faces various issues that may impact the direction of its future operations. These include data privacy, antitrust concerns regarding the largest tech companies like Google and Amazon, and the lingering effects of COVID-19. The pandemic caused severe disruptions in the industry, particularly to the movie theater sector. Although the end of the pandemic will not mean immediate relief to the industry, businesses that have closed their doors may struggle to reopen, and many consumer habits may have permanently changed.