China’s entertainment and media industry set to reach US$479.9 billion in annual revenue as AI boosts productivity: PwC
- Internet advertising, video games will be main growth drivers for world’s second-largest entertainment and media market, consulting firm says
- Generative AI will provide productivity boost as China’s entertainment and media industry grows faster than global average over next five years
Many companies in China are using generative AI to increase their productivity and creativity, the report said. Generative AI learns patterns from existing data and then generates new data, including images and text, based on user prompts.
“Generative AI will be widely utilised within the E&M [entertainment and media] industry for applications such as gaming, film, television and music production, advertising market and marketing strategies, providing content creators with tools to optimise the creative process and leading to more efficient workflows, as well as innovative content production,” said James Lee, AI and emerging tech consulting leader for PwC Hong Kong in a statement on Thursday.
The technology will allow E&M organisations to transform their business – so long as they manage risks to security, privacy, bias, ethics and brands, he added.
Revenue from China’s overall entertainment and media industry is set to grow at a compound annual growth rate (CAGR) of 6.1 per cent over the next five years, overtaking the global rate of 3.5 per cent for the period, according to the report.
China’s internet advertising market, the second largest globally after the US, recorded revenue of US$94.7 billion last year and is expected to rise at a 9.1 per cent CAGR to reach US$146.4 billion by 2027, according to PwC.
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The mainland has more people online than anywhere else in the world, presenting huge opportunities for advertisers, PwC said in the report.
The country’s internet population reached nearly 1.07 billion at the end of last year, an increase of over 35 million from December 2021, with an internet penetration rate of 75.6 per cent, according to a March report from the China Internet Network Information Centre, an agency under the nation’s Ministry of Industry and Information Technology.
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Besides its massive domestic market for video games, China also plays a growing role in the global video-gaming business, with Chinese games and companies gaining increasing prominence in many other established markets, according to PwC.
Meanwhile, revenue from Hong Kong’s entertainment and media industry is expected to reach US$11 billion in 2027, growing at a CAGR of 3.47 per cent over the next five years, in line with the global growth rate for the period.
“Healthy growth has been the major trend for Hong Kong E&M since the start of the post-Covid recovery in 2022,” said Cecilia Yau, media leader for PwC Mainland China and Hong Kong. “This has mainly been driven by the cinema and business-to-business segments, which have higher growth than their global counterparts.”
However, the growth of traditional media continues to fall below average, as digital advertising becomes the dominant channel in Hong Kong, she said.
