Advertising to eclipse consumer spend as $3.5 trillion industry engine
PwC's Global Entertainment & Media Outlook 2025–2029 forecasts industry revenues to reach $3.5 trillion by 2029, propelled by digital advertising spending outgrowing consumer subscriptions. The report highlights massive growth in AVOD, connected TV (CTV) advertising, and generative AI workflow integration as traditional pay TV and subscription growth flatten.
Key Takeaways
- OTT video revenue is projected to hit $230 billion by 2029, with AVOD's share of that segment rising to 27.1%.
- Connected TV advertising is forecast to surge from 21.5% of traditional broadcast ad spend in 2024 to 44.7% by 2029.
- Global video game revenue is expected to reach nearly $300 billion by 2029, exceeding the combined revenues of music and film.
- A 2027 tipping point is forecast as consumer revenue from OTT video moves past traditional pay TV for the first time.
Why It Matters
The migration from subscription-only models to hybrid, ad-supported tiers marks the end of the hyper-growth phase for pure SVOD. For streamers, the priority has shifted from raw subscriber acquisition to ARPU optimization through high-margin ad tech and AI-enabled personalization. This evolution forces a realignment of the technical stack, requiring better measurement tools and programmatic capabilities to capture the shift of budgets from linear to connected TV. Watch for the emergence of ‘unified’ ad measurement standards by 2026 to address remaining advertiser friction.
Additional Context
The acceleration of ad-supported streaming is already visible in recent market data. Per findings from Digital i in January 2026, global adoption of ad-supported tiers on Netflix reached 40% of active accounts in Q3 2025, a significant climb from 26% just one year prior. Similarly, Disney+ saw its ad-tier usage rise to 44% during the same period. While Amazon Prime Video initially launched its ad-supported model with a high baseline, it remains the leader in ad-tier penetration, even as other services catch up to its reach. Industry analysts at Ampere Analysis reported in April 2026 that global streamers generated $157 billion in subscription revenue in 2025, with ad-supported plans accounting for 28% of that total. This represents a massive jump from 2020, when ad tiers contributed less than 5% of global streaming subscription revenue. The shift is partially a response to 'subscription fatigue,' where consumers are capping their monthly discretionary spend. Comscore's 2025 'State of Streaming' report corroborated this, noting that free ad-supported streaming (FAST) services saw a 43% increase in total hours watched between late 2024 and late 2025. Technologically, the industry is increasingly leaning on generative AI to bridge the gap between ad production and delivery. According to PwC and industry reports from mid-2025, AI-driven hyper-personalization is now being used to lower the cost of connected TV ad creation for small-to-medium enterprises, effectively democratizing access to high-value inventory. This tech-led efficiency is critical as the industry faces headwinds from regulatory changes and potential copyright restrictions, as highlighted by high-profile artist protests regarding AI training data in mid-2025.
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