Romania’s media and entertainment industry to grow by 7 percent to 4 billion euros in 2023: PwC

The Romanian media and entertainment industry is expected to grow by 7 percent this year to a value of EUR 4 billion, with most segments set to see increases, according to the PwC Global Entertainment & Media Outlook 2023−2027 (GEMO) report. The forecast shows a continued growth rate of between 6 and 7 percent per year until 2027.

“After a strong rebound in 2021, when it grew by 10 percent, the estimated growth rate of the media and entertainment industry in Romania has stabilised at a level of 7 percent in the last two years, with most of the segments heavily affected by the pandemic, such as cinemas, business-to-business events and the publishing sector, returning to pre-pandemic levels. At the same time, we see that the outlook for the next few years shows an increasingly digital and advertising-dominated industry”, said Florin Deaconescu, Partner and Leader of the Technology, Media and Telecom services team, PwC Romania.

Romania has the highest estimated media and entertainment industry growth rate among the Central and Eastern European countries included in the report. For example, in Poland, the sector is expected to grow by 6 percent this year, in Hungary by around 4.3 percent and in the Czech Republic by 4.2 percent.

Developments by market segment

Estimates show that of the 11 segments analysed in the report for Romania, the biggest increases will be recorded by outdoor advertising, at 33.5 percent, over-the-top (OTT) services (Netflix, HBO Max, Disney, etc.), at 32 percent, and cinema, at 24 percent. At the opposite end, newspapers and consumer magazines are estimated to increase by only 0.36 percent.

The cinema industry, the segment most affected by the pandemic, had the highest growth in the Romanian media and entertainment market in 2022, with an increase of 91 percent to EUR 43 million, mainly due to the release last December of Avatar: The Way of Water, which achieved the highest box office in the history of this sector on the local market. For this year, the sector is estimated to grow to EUR 54 million, approaching the pre-pandemic level of EUR 59 million (2019).

The OTT services market in Romania recorded the second largest growth in the market last year, by 24 percent to reach a value of EUR 56 million, and it will continue to grow this year at an estimated rate of around 32 percent to EUR 74 million. Romania remains the smallest OTT market in Central and Eastern Europe despite impressive growth rates in recent years, but competition among OTT providers in Romania is increasing.

Romania’s internet access sector is forecast to be the third fastest growing in the world over the next five years. In 2022, it grew by 11 percent to EUR 1.27 billion, and the report indicates an advance of around 13 percent in 2023.

Internet advertising* is up by around 21 percent to EUR 224 million in 2022. The segment will continue to grow in 2023, but at a much slower pace of around 5 percent, according to estimates. The mobile sector dominates the market, accounting for 74 percent of total internet advertising revenues. Google and Meta are the leaders in internet advertising, with just over half of the total revenues. Google is the main player in the search market, and Meta takes the majority of revenues in the social media segment. TikTok comes close behind and is preferred by 63.2 percent of online users aged 16−64.

Television (advertising plus TV subscriptions) stagnated last year, with revenues of EUR 862 million, and is expected to grow by around 2.7 percent this year.

Newspapers and consumer magazines in Romania have grown for the first time since 2018, by around 16 percent and 24 percent, respectively, but a similar trend is not expected for 2023, with a decrease predicted. At the same time, consumer book sales revenues stagnated at EUR 142 million, and a modest increase to EUR 144 million is expected this year.

The radio, music and podcast segment continued to grow in 2022, with a 12 percent advance last year to EUR 34 million, and it is estimated to grow to EUR 36 million in 2023.

The B2B media sector surpassed the pre-crisis level with an advance of more than 19 percent last year to EUR 153 million. The outlook remains optimistic for 2023, but a growth rate no higher than 8 percent is expected.

Outdoor advertising continued to grow in 2022, by around 7 percent to EUR 32 million, but it is expected to advance by 33.5 percent to EUR 43 million in 2023. That is the highest predicted rate of all the sectors analysed.

The video games and e-sports segment was up 6 percent in 2022 to EUR 218 million in revenues. For this year, it is estimated to improve by only 3.3 percent to EUR 226 million.

Globally, the media and entertainment industry’s revenues grew by 2.3 percent in 2022 to USD 6.88 trillion. That is a much slower pace than in 2021, when it was about 5 percent. Growth of 3.4 percent is expected in 2023.