Media and entertainment industry trends 2027: AI, immersive media, and entertainment market forecast

Advertising is growing nearly three times as fast as consumer spending. That single gap is reshaping how every streamer, studio, and sports league makes money in 2027.

Four forces now define the media and entertainment industry: hybrid monetization models, creator-led revenue, AI-powered personalization, and AI in content production. They intersect with live programming, immersive entertainment, interactive commerce, deepfake detection, and platform aggregation. This outlook covers the entertainment market size and forecast first. Then it walks through each trend with figures from PwC, Deloitte, McKinsey, and Fortune Business Insights.

Key takeaways

Six findings shape the entertainment market in 2027. Each one comes from research published in 2025 or 2027.

• The entertainment market grows steadily, not explosively. PwC expects global entertainment and media revenue to reach $3.5 trillion by 2029, up from nearly $3 trillion in 2024, a 3.7% compound annual growth rate.
• Advertising outpaces everything else. PwC forecasts it to grow at a 6.1% CAGR against 2.0% for consumer spending, and connected TV ad revenue should reach $51 billion in 2029.
• Subscription-only models are leaking. Deloitte’s 2027 survey found that 41% of US consumers cancelled a streaming subscription in the last six months, while 90% of households still pay for at least one.
• Discovery now starts on social platforms. Among fans, Deloitte finds that 52% say social media is their primary way to learn about new content, and 73% of Gen Z fans say the same.
• AI lowers production cost but raises the bar for differentiation. McKinsey reports productivity gains of 5 to 10 percent in specific use cases, and nearly 40% of fans accept clearly labeled AI-created content.
• Immersive entertainment is the fastest-growing segment. Fortune Business Insights sizes it at $146.6 billion in 2025, with a 26.7% CAGR through 2034.
• Trust is the constraint. Labeling, watermarking, and detection decide whether synthetic media helps or hurts a brand.

What is trending now in entertainment? The top 5 trends in 2027

The top five entertainment trends in 2027 are hybrid monetization, creator-led revenue, AI-powered personalization, AI in content production, and live and interactive content. Each one changes who pays, who watches, and how fast content reaches the screen.

1. Hybrid monetization. Subscriptions, ad tiers, FAST channels, and commerce share one platform.
2. Creator-led revenue. Creators own discovery and fan loyalty, and platforms pay for access.
3. AI-powered personalization. Recommendations predict mood and context, not just genre.
4. AI in content production. Generative tools speed up scripting, localization, and post-production.
5. Interactive and live content. Interactive content and live events hold attention that libraries cannot.

The sections below test each trend against market data, starting with market size.

Entertainment market size and growth forecast: 2025 to 2029

The entertainment market grows at two speeds. Advertising and immersive segments grow fastest, while consumer spending grows slowly.

This market overview draws on market research reports from PwC, Deloitte, McKinsey, and Fortune Business Insights, all published recently. The market data points to clear growth trends and several emerging trends, and it shows where industry leaders and global players place their bets.

The global entertainment market is large, mature, and splitting into two speeds. Digital advertising, video games, and spatial computing expand quickly. Cinema, live events, and consumer subscriptions grow slowly. Reading the entertainment market report figures side by side shows where the money is moving.

Segment	Figure	Source
Global entertainment and media revenue	Nearly $3 trillion in 2024, $3.5 trillion in 2029 (3.7% CAGR)	PwC, July 2025
Advertising versus consumer spending	6.1% CAGR versus 2.0% CAGR	PwC outlook
Digital share of ad revenue	72% in 2024, 80% in 2029	PwC outlook
Connected TV ad revenue	$51 billion in 2029	PwC outlook
Video games	$224 billion in 2024, nearly $300 billion in 2029 (5.7% CAGR)	PwC outlook
Cinema box office	$33 billion in 2024, $41.5 billion in 2029	PwC outlook
Immersive entertainment market size	$146.6 billion in 2025, $185.7 billion in 2027 (26.7% CAGR)	Fortune Business Insights, October 2027

The numbers describe a clear market analysis. Advertising and digital channels take a rising share, and PwC expects digital to reach 80% of ad revenue by 2029. PwC notes that non-digital categories such as live music, events, and cinema still made up 61% of consumer revenue in 2024. Studios and platforms that treat these as one market miss the point. They are separate growth curves that need separate plans.

Market dynamics also shift along the value chain: content creation, distribution, advertising, and monetization. AI adoption reshapes the first and last links, while connected TV reshapes the middle. Digital entertainment platforms gain market share each year as advertising moves online, and market trends in streaming and gaming redefine how audiences spend time and money.

In this entertainment market report scope, the entertainment market refers to revenue that streamers, studios, game publishers, live operators, and ad-tech vendors earn from consumers and advertisers. Market players split that revenue by segment, region, and format, so market segmentation matters as much as the headline total. Entertainment market analysis also varies by research firm. Live entertainment market size figures differ by source, so this outlook relies on PwC’s cinema and live-event data instead of a single live entertainment market report. According to PwC, the global market in 2025 builds on nearly $3 trillion in 2024, and the market is projected to grow at 3.7% a year to 2029, which gives global growth a steady base.

Regional market data adds one more layer. Fortune Business Insights reports that North America led this segment with a 37.99% share in 2025. Companies planning global reach should expect different adoption speeds across regions. With the figures in place, the next question is how companies actually earn the revenue.

Hybrid monetization models: how streaming and monetization models are evolving

The subscription-only model that defined the first era of streaming no longer holds. Platforms now combine subscription video on demand (SVOD), ad-supported video on demand (AVOD), free ad-supported streaming TV (FAST), live programming, and embedded commerce.

The audience data explains why. In Deloitte’s survey, 90% of US households have a paid SVOD service and pay for four on average. Yet 41% cancelled one in the last six months, and only 22% of those who churned returned to the same service. Churn is now a permanent feature of streaming platforms, not an exception.

Advertising fills that gap. PwC’s outlook shows connected TV advertising rising from 5.9% of traditional broadcast TV ad revenue in 2020 to a forecast 44.7% in 2029. By 2029, advertising is forecast to bring in $300 billion more than consumer spending. Ad tiers, FAST channels, and bundles are the practical response. Each one gives the platform a second revenue stream per viewer.

For media companies, the work sits in ad decisioning, audience segmentation, and measurement across tiers. Teams that already run streaming TV platforms know that the hard part is unified audience data, not the ad tier itself. The next shift moves revenue away from the platform and toward the people who hold the audience.

Content monetization: how creators and the creator economy are shaping entertainment

Creators now act as distribution partners, not just suppliers. Deloitte found that 33% of consumers feel a stronger personal connection to social media creators than to TV personalities or actors. Another 32% say social content is more relevant to them than traditional media content.

That trust turns into revenue. Around 46% of fans seek fandom-related content from creators. About 40% of fans wish they could gather their favorite fan content in one place, and among those who do, 37% bought fandom merchandise in the last six months. The pattern points toward live shopping, merchandise drops, memberships, and interactive polls that turn viewers into participants.

Studios and streamers can respond in three ways: license creator content, build creator programs inside their own apps, or share ad revenue with creators on their platforms. Each choice affects rights, brand safety, and data ownership, so contracts and tooling need to move together. Once the revenue model is set, personalization decides who stays.

What is Gen Z’s favorite form of entertainment?

No single format wins. Gen Z fans move between social video, streaming, gaming, and live events, and they treat them as one connected habit. In Deloitte’s survey, 73% of Gen Z fans say social media is their primary way to learn about new content, and 71% engage with their fandom across multiple platforms.

Gen Z and millennial fans also belong to an average of four fandoms, against three for older generations. For media companies, the lesson is practical. Treat social platforms as the front door, and treat streaming, games, and live events as the places where fans spend time. Content that works across all of them earns the most attention.

AI-powered personalization: how companies use audience data to personalize content

Personalization is shifting from genre matching to context-aware recommendations that predict mood, context, and intent. A viewer on a Friday night wants something different from the same viewer on a Tuesday commute, and current recommendation systems model that difference.

Fans are open to it, with limits. Deloitte reports that 22% of fans would use streaming services more if the streamer used generative AI for better recommendations. More than a quarter want an AI-generated digest of news about their favorite shows. And 32% of sports fans want AI-generated highlight reels and commentary built for their team. Deloitte’s industry outlook adds that audience trust and data transparency become differentiators as personalization scales.

Personalization only works when audiences trust what happens to their data. We build recommendation models with clear ownership, explainable logic, and human review, so the business can show why a viewer saw a title and stand behind the result.

Darko Dimitrievski, Director of Delivery, Media and Entertainment, Avenga

Delivery matters as much as the model. Data pipelines, consent management, and business intelligence dashboards decide whether a recommendation engine improves watch time or just adds cost. Teams that want to move beyond pilots can start with AI services built around governed data and measurable viewing results.

AI in content production: how AI is changing the entertainment industry

Generative AI now touches scripting, storyboards, localization, dubbing, and post-production. McKinsey’s January 2027 analysis reports 5 to 10 percent productivity gains in specific use cases. It estimates that workflow changes could influence about 20 percent of original content spend within five years, and that up to $60 billion in annual revenue could be redistributed after mass AI adoption. Global content spend reached $180 billion in 2024, excluding sports, so even small percentage gains move large budgets.

Pre-production is the most advanced stage, with script breakdowns and A/B testing of story beats. Post-production is catching up through dubbing, localization, and footage search. Physical production lags, because the gains there depend on tools that do not exist at professional grade yet.

Deloitte’s industry outlook frames the effect as incremental for large studios at first, with independent creators gaining the most. Lower creation cost raises the stakes for differentiation, because everyone can now produce more. The risks are concrete: copyright claims over training data, digital likeness rights, bias in casting and character design, and output that is not yet premium quality. Human review stays in the loop at every stage.

Studios and platforms that need generative AI in production workflows can start with governed pilots in localization and pre-production, then scale what proves its worth.

Learn more

Production tools only matter if the finished content reaches viewers live and at scale, which brings the focus to live events.

Live programming and live entertainment growth

Live programming is the strongest answer to churn. Sports, concerts, award shows, and co-streamed events create appointment viewing, and they carry premium ad pricing because the audience watches in real time.

PwC notes that non-digital categories, including live music, events, and cinema, accounted for 61% of consumer revenue in 2024 and should hold a similar share. Cinema box office is forecast to climb from $33 billion in 2024 to $41.5 billion in 2029. The live entertainment sector keeps its weight even as digital channels grow around it. Live events, sporting events, theme parks, and other premium live events all compete for the same fan budget.

Entertainment venues, from stadiums to theme parks, sell live experiences that streaming cannot copy. Themed entertainment and premium live events draw fans who value being there, and a live venue turns attendance into ticket, hospitality, and sponsorship revenue. These entertainment and pop culture moments then feed social video, which loops back into streaming.

Streamers now add live layers to their libraries: live sports, interactive chat, second-screen features, and shared viewing rooms. Each feature raises the bar for delivery, which is why the infrastructure section below matters. First, a look at the formats that blur the line between watching and playing.

Immersive entertainment: how interactive content is changing audience experiences

Immersive entertainment covers virtual reality, augmented reality, spatial computing, and interactive gaming. Fortune Business Insights sized the market at $146.6 billion in 2025 and expects $185.7 billion in 2027. The immersive entertainment market is projected to reach $1,231.3 billion by 2034, growing at a CAGR of 26.7%.

The report links growth to advancement in spatial computing, rising demand for interactive entertainment experiences, 5G adoption, and the expansion of gaming. Those drivers match what viewers already do, and they give this segment the largest market potential of any segment in this outlook. Fans build communities across platforms, and 55% of fans in Deloitte’s survey engage with their fandom on more than one.

For media companies, these experiences rarely replace linear or streaming content. They extend it: a series becomes a game world, a concert becomes a virtual venue, a sports broadcast becomes a multi-angle interactive broadcast. Success depends on the quality of the underlying content and on low-latency delivery. Interactivity also opens another revenue channel, which leads to shoppable streaming.

Shoppable and interactive streaming

Shoppable streaming puts commerce inside the viewing moment. A viewer sees a jacket in a show, taps it on a connected TV, and buys it without leaving the stream. Live shopping on social platforms follows the same logic with a host, a product, and a countdown.

The model works best when it respects context. Product placement that fits the scene converts better than banner clutter, and it protects viewer attention. Deloitte’s finding that fans who want aggregated fan content are more likely to buy merchandise shows the demand exists. Platforms that connect content, catalog, and checkout through one data layer will own the shopper relationship.

Measurement closes the loop. Attribution across viewing, clicking, and buying turns ad dollars into business intelligence that planners trust. Interactive commerce still depends on one thing, which is audiences believing what they watch.

Deepfakes, synthetic media, and content trust infrastructure

Deepfakes and synthetic media create three risks for media companies: misinformation, brand damage, and copyright disputes. McKinsey flags digital likeness protection and fair compensation as open problems, and notes studio lawsuits over training data.

Audiences are not rejecting synthetic content outright. Nearly 40% of fans in Deloitte’s survey would accept clearly labeled AI-created content, and 24% would like to co-create content with generative AI. The operative word is labeled. Disclosure is what separates a creative tool from a deception.

A practical trust stack has four layers:

1. Watermarking and content credentials on every AI-generated asset.
2. Metadata tracking that records tools, prompts, and human approvals.
3. AI detection systems that screen user uploads and incoming partner content.
4. A governance framework that defines who approves synthetic content and who answers when something goes wrong.

Trust infrastructure is cheaper to build before a crisis than after one. It also needs fast, reliable delivery behind it.

Multi-CDN and low-latency delivery

Live and interactive features expose weak infrastructure quickly. A few seconds of delay breaks live betting, shared viewing, and real-time polls. Buffering during a major live event loses viewers and ad revenue at the same moment.

Multi-CDN architectures route traffic across several content delivery networks, so a failure in one does not take the stream down. Ultra-low-latency streaming protocols close the gap between the live event and the screen. Streaming platforms that run on cloud infrastructure can add capacity for peak events and release it afterward, which keeps costs tied to demand.

Monitoring completes the picture. Real-time dashboards for startup time, rebuffering, and bitrate let operations teams fix problems before viewers notice them. Delivery quality is invisible when it works and decisive when it fails.

How entertainment companies are adapting to changing audience expectations

Companies should fund data and delivery first, then individual trends.

These entertainment market trends and insights point in one direction. Entertainment content, entertainment platforms, and entertainment experiences now compete on data quality and delivery as much as on creative quality. Each entertainment company still has to decide where to start.

Not every trend deserves a budget this year. Business development leads and strategy teams can use a practical sequence to decide where to start.

1. Map revenue per viewer across subscription, advertising, commerce, and live programming.
2. Fix the shared data layer first, because personalization, ads, and shoppable features all depend on unified audience data.
3. Pilot AI in two or three production stages, such as localization and pre-production, with human review.
4. Set labeling and approval rules for synthetic media before the first release.
5. Test one creator partnership and one interactive feature, and measure engagement and revenue.
6. Benchmark delivery quality against live-event peaks, then close the biggest gaps.

This order keeps decisions tied to measurable results instead of technology for its own sake.

FAQ

What are the main entertainment trends in 2027?

The main trends are hybrid monetization, creator-led revenue, AI-powered personalization, AI in content production, live programming, immersive media, shoppable streaming, and trust infrastructure for synthetic media. Advertising and digital channels grow fastest.

How big is the entertainment market, and how fast is it growing?

PwC expects global entertainment and media revenue to rise from nearly $3 trillion in 2024 to $3.5 trillion in 2029, a 3.7% compound annual growth rate. Advertising grows faster at 6.1%, and immersive media grows at a projected 26.7% CAGR.

How is AI changing the entertainment industry?

AI changes both ends of the business. It improves recommendations and ad targeting on the audience side, and it speeds up scripting, localization, dubbing, and post-production on the creation side. McKinsey reports 5 to 10 percent productivity gains in specific use cases.

How are streaming and monetization models evolving?

Streaming platforms are adding ad-supported tiers, FAST channels, live programming, and commerce to subscriptions. Churn pushes this shift, since 41% of US consumers cancelled a streaming service in the last six months.

How are creators shaping entertainment?

Creators shape discovery and loyalty. Among fans, Deloitte finds that 52% say social media is their primary way to find new content, and 33% of consumers feel closer to creators than to TV personalities or actors.

How are companies using audience data to personalize content?

Companies combine viewing history, context, and consent-based profile data to rank titles, tailor trailers, and target ads. The approach only works with transparent data practices, because audience trust decides whether people share the data.

What is immersive entertainment?

It covers virtual reality, augmented reality, spatial computing, and interactive content that puts the audience inside the story. Fortune Business Insights sizes the market at $146.6 billion in 2025.

How can media companies manage deepfake risk?

Media companies manage deepfake risk with watermarking, metadata tracking, AI detection, and clear approval rules for synthetic content. Labeling matters because nearly 40% of fans would accept clearly labeled AI-created content.

Conclusion: Growth follows trust, data, and delivery

Media companies are not short of trends. They are short of decisions that connect those trends to revenue. Advertising, creators, AI, live events, and spatial media all grow, but each one depends on the same base: unified audience data, reliable delivery, and an audience that trusts what it watches.

Across the entertainment space, media leaders who set clear ownership for data, AI governance, and measurement will turn the 2027 outlook into results. Those who chase each trend separately will pay for the same infrastructure several times. Human accountability stays at the center, because AI supports business decisions and does not replace them.

Contact Avenga to discuss how your streaming platform can put AI at its core.