Media and Entertainment Spotlight
The Media and Entertainment Industry in the United States
The U.S. media and entertainment (M&E) industry is the largest in the world. At $735 billion, it represents a third of the global M&E industry, and it includes motion pictures, television programs and commercials, streaming content, music and audio recordings, broadcast, radio, book publishing, video games, and ancillary services and products. The U.S. industry is expected to reach more than $830 billion by 2022, according to the latest Entertainment & Media Outlook by PriceWaterhouseCoopers (PwC).
The U.S. filmed entertainment industry encompasses films, movie theaters, TV subscriptions and electronic home video production, and distribution and consumption. Box office receipts reached just over $11 billion in 2017 (this figure includes cinema advertising earnings of $881 million), and home video reached $107.9 billion in 2017. The United States has a mature TV market and television subscriptions will remain static at $100.8 billion through 2018. Competition is heating up from the new digital economy, and streaming video on demand (SVOD) is growing rapidly.
Box office numbers are expected to grow as theaters adopt digital screens, increase ticket prices, diversify concession options, offer consumer products such as movie or brand related merchandise, and offer membership discounts to attract viewership. Traditionally the film industry consisted of multinational umbrella corporations, major studios, and independent studios or “indies." Today, multi-channel networks engage in the filmed entertainment sector and SVOD platforms are major drivers in the filmed entertainment sector.
Drawing on formidable strengths, the U.S. film industry has a proven ability to produce films that generate hundreds of millions of dollars, including revenues from distribution across strong domestic and international networks. Success in the industry is based on creativity and financing, and the industry is largely self-regulated. The U.S. market has a large talent pool of writers, actors, producers, directors and technical experts, and is home to a variety of film crews, post-production firms, backdrops, and infrastructure to support production. U.S. filmmakers also receive critical protections for their intellectual property.
Many of the leading motion picture studios are part of larger media conglomerates that often include television, video and streaming services, music services, newspaper, cable and magazine segments. The U.S. filmed entertainment sector enjoyed a trade surplus of $13.3 billion in 2015 (latest available data), which was 5 percent of the total U.S. private sector services trade surplus that year.
The industry offers attractive possibilities for international companies, both large and small, and provides film production tax incentives. With the shift toward digital production and distribution, foreign firms are continually seeking out U.S. digital and animation expertise and new formats.
The U.S. recorded music industry (including concerts and touring) grew to $18.3 billion in 2017, up from $17.2 billion in 2016. Collectively, the industry is the largest global music market. Live music and performance royalties are growing but physical music has contracted considerably; while all other segments of recorded music are up, including digital, streaming and sync licensing. Digital music sales took over physical sales for the first time in 2014. Streaming music is expected to increase almost 20 percent to $7.4 billion by 2021, as consumers opt to subscribe to music services. Many companies in the industry have diversified, signing sync deals with vertical businesses for TV ads, in-flight entertainment, satellite radio, restaurants, touring, live entertainment, and merchandise. The United States also has the world’s largest performance rights market and earns half of global sync revenues.
Digital technologies have revolutionized the music industry by creating high quality, low-cost recording technologies and digital distribution, along with the proliferation of devices to download and listen to music. Future industry growth is likely to come from diversified services as they capitalize on vertical business opportunities to license brand name products and services, packaging consumer experiences around touring and live music, bundling music services with other online content services and more. Streaming services will continue to grow and offer more personalized services for consumers. The consumer has more power to influence digital entertainment industries than ever.
The U.S. publishing sector, which includes both physical and digital books, is the largest in the world with $37 billion in sales (2017), measured across three major segments: professional, educational, and consumer publishing. Consumer books cover the largest market share by far, followed by educational and then professional books. By 2021, digital publishing will account for 45 percent of all publishing.
Consumer demand and reading experiences continue to evolve. For example, online retailer Amazon has opened physical book stores (for both physical and ebooks). In addition to eReaders, which are designed to only display ebooks, internet-connected smartphones and tablets bring entire libraries to users' fingertips. More than 70 percent of American adults own a smart phone, roughly 45 percent own a tablet, and one in five own an eReader.
The U.S. gaming industry comprises a significant amount of the M&E industry: over $23 billion in revenues in 2017. Today’s consumers have access to multiple devices for gaming, including PCs, mobile phones, digital or physical consoles, and tablets. The sector is comprised of: physical, digital, and online games; mobile apps; and virtual and augmented reality (VR/AR). Electronic sports, also known as "eSports" or "e-sports", includes professional gaming, in which players compete before a live audience, and the industry is growing at a 22.6 percent growth rate, signaling tremendous opportunity. In 2017, eSport ticket sales in the U.S. grew at a 19.7 percent rate, while eSports streaming advertising grew 35 percent (NOTE: eSports earnings are only currently available for about ten key markets worldwide).
The industry is constantly innovating and bringing new applications to market. VR sets, which include home, mobile and portable sets, are expected to increase sales in the up to 80 percent between 2017 and 2018. VR is the use of digital technology to replace reality with a complete and realistic, immersive simulation, while AR is interaction with computer-generated content overlaid with the "real world". Using VR/AR, U.S. developers and scientists are producing cutting-edge solutions in healthcare, education, online shopping, and entertainment.
Media and Entertainment Industry Associations
Association of American Publishers
Entertainment Small Business Alliance
Entertainment Software Association
Independent Film and Television Alliance
International Game Developers Association
International Intellectual Property Alliance
Motion Picture Association of America
National Association of Broadcasters
National Association of Television Producers and Executives
National Music Publishers Association
Recording Industry Association of America
Digital Media Wire
PricewaterhouseCoopers Entertainment & Media Outlook