Hong Kong entertainment and media industry set for steady, healthy growth

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Hong Kong, 13 July 2023 - According to PwC’s “Global Entertainment & Media Outlook 2023 to 2027” Hong Kong summary, Hong Kong’s entertainment and media (E&M) revenue is expected to see a slight increase of 5.55% year-on-year to reach US$9.76bn in 2023. Projections show E&M growth in Hong Kong will be steady, with a compound annual growth rate (CAGR) of 3.47% between 2022 and 2027​, with revenue expected to reach US$11bn in 2027. ​ ​

Cecilia Yau, PwC Mainland China and Hong Kong Media Leader, said: “Healthy growth has been the major trend for Hong Kong E&M since the start of the post-COVID recovery in 2022. This has mainly been driven by 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 here.​” ​

Cinema

Box office revenue in Hong Kong is expected to rebound in 2023, recovering from the impact of COVID-19 in 2022. Although Hong Kong’s box office revenue dropped 6.6% in 2022, as a result of cinemas being closed for the first four months, increases are now anticipated, with a return to the pre-COVID level set for 2025, and being on course to rise to US$273mn in 2027​.

While Hong Kong remains a major film distribution hub in the Asia-Pacific region​, Hong Kong audiences have started to support local film production due to the impact of the pandemic. The local movie, ‘A Guilty Conscience’, grossed US$14.6 million, ranking first place in Hong Kong’s box office for the first half of 2023. Another positive sign is the government’s commitment to funding local productions through establishing new schemes by the Hong Kong Film Development Council to promote co-production with other Asian partners.

Business-to-business​

Driven primarily by trade shows, Hong Kong’s business-to-business segment is expected to grow at a high CAGR of 7.16% from 2022 to 2027, outperforming the global average of 2.93%. Trade shows accounted for over 50% of the business-to-business market in Hong Kong. Revenue is projected to grow rapidly, at 44.58% in 2023, after the quarantine measures for inbound travellers were lifted in September 2022. Trade shows are now on course to grow at 12.55% CAGR, to reach US$548mn in 2027.

Internet advertising  

Hong Kong’s advertising market will be dominated by digital advertising. The trend is in line with the global market.​ Internet advertising in Hong Kong is projected to grow at 6.44% CAGR to reach US$2.12bn in 2027.​

The advertising market is shifting further towards mobile advertising, as 5G application and usage expand. Hong Kong’s mobile display advertising revenue will grow at a CAGR of 8.1% between 2022 and 2027, and will represent 61.28% of the Internet advertising market by 2027. ​

Traditional media ​

As digital advertising dominates the advertising market in Hong Kong, advertising revenue contributed by TV and newspapers continues to diminish. Printed publications are expected to see a decline in the wake of the growth of digital media. Hong Kong’s newspaper market will see a drop, with a CAGR of 0.8% over the forecasted period, during which, revenue is on course to fall to US$449mn.

​Generative AI 

Generative AI learns patterns of existing data and applies them to generate new data, images, or text based on user’s prompt​. These AI models are capable to interact with the user and generate content in a​ human-seeming way. According to PwC’s Global Artificial Intelligence Study, the openness to tap into the power of generative AI will likely only continue to grow with an estimated US$15.7tn of potential contribution to the global economy by 2030.

James Lee, PwC Hong Kong AI and Emerging Tech Consulting Leader observed: “I believe Generative AI will be widely utilised within the E&M 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. The technology allows E&M organisations to transform their business — so long as they manage the new risks to security, privacy, bias, ethics and brands”. 

Notes to editors:

About the Global Entertainment & Media Outlook

PwC’s 24^th annual edition of the Global Entertainment & Media Outlook is a comprehensive online source of global analysis for consumer and advertising spending. With like-for-like, five-year historical and five-year forecast data and commentary for 13 defined industry segments in 53 territories, the Outlook makes it easy to compare and contrast consumer and advertising spending across segments and territories. Find out more at www.pwchk.com/emoutlook.

Download the reports:

Hong Kong summary: www.pwchk.com/emoutlook

Mainland China summary (English): www.pwccn.com/emoutlook

Mainland China summary (Simplified Chinese): www.pwccn.com/emoutlook/zh