Media & Entertainment 2026

Film and Television

The filmed entertainment sector is currently undergoing a period of recalibration due to several interconnected challenges. The aftermath of the pandemic, followed by Hollywood’s labour strikes, set the stage for recession-minded production spending. The recently negotiated Writers Guild of America (WGA), Screen Actors Guild and American Federation of Television and Radio Artists (SAG-AFTRA), and Directors Guild of America (DGA) four-year collective bargaining agreements will provide labour stability through to mid-2030. This agreement was a departure from the three-year historical standard. Content output has declined without obvious concern for regenerating content pipelines, but the longer-term labour agreement could foster stability. Budgets per project are substantially below pre-pandemic levels, particularly in the United States. Studios are disciplined about what they greenlight and how much they are willing to spend. The box office successes of low-budget, independent films such as Obsession and Backrooms validate measured spending. Video game IP and other recognisable franchises dominate the box office relative to the originals. At the same time, international productions are gaining global market share. Competitive tax incentives, favourable currency conditions, lower labour costs, and investment in state-of-the-art studio infrastructure fuel this shift away from US productions. In particular, the UK attracts abundant filming after introducing its Audio-Visual Expenditure Credits scheme in 2024, which allows studios to receive tax credits for up to 39% of all qualified production-related expenditures. California has taken steps to prevent bleed from its position as a global production stronghold by revising its TV and Film Tax Credit Program in 2025 to bolster the state’s draw, expanding the programme cap from USD330 million to USD750 million and providing tax credits for up to 40% of all qualified production-related costs. Meanwhile, younger consumers spend more time on their mobile screens, increasingly drawn to user-generated content across social media platforms, which fosters fandom ecosystems that expand brand reach and loyalty. These evolving consumption preferences extend to streaming, where cost-conscious, younger audiences are flocking to free, ad-supported providers such as Tubi. These platforms offer vast, diverse on-demand libraries and live channels at no cost. In response, the ad-supported tiers of major streaming companies like Netflix are growing.

Artificial Intelligence (AI)

Advances in artificial intelligence point to a paradigm shift in the media and entertainment landscape. Generative AI is starting to impact various layers of the value chain – from content development and production to personalisation and distribution. While the potential of AI to accelerate workflows, reduce costs, and expand creative capacity is becoming increasingly clear, its broader legal and commercial implications are murky.

Studios and agencies are dipping their toes into making investments in AI start-ups as a hedge against the inevitable use of AI-powered digital replicas, voice synthesis, and generated content. Film and television creators are also increasingly partnering with technology companies to design generative AI tools, helping these companies and developers tailor AI software for industry-specific needs, such as story development or visual effects. The purported intent of these investments and partnerships is not just to harness technology for its maximum benefit, but also to ensure that new tools act as creative augmentations rather than replacements for human storytellers. What follows is a snapshot of the year in AI deal making:

• Disney had agreed to a deal with OpenAI to allow ChatGPT Images and Sora, a short-form video creation app, to generate over 200 characters from Disney, Marvel, Pixar, and Star Wars. The three-year agreement included a USD1-billion equity investment from Disney in OpenAI, plus warrants to purchase additional equity, and planned to include select Sora videos on Disney+, as well as further integrations of OpenAI’s models into Disney+. However, the deal fell through after OpenAI discontinued Sora earlier this year. Disney says it will continue to engage with AI platforms.
• Generative AI company Runway has been making deals with Hollywood studios. AMC Networks recently partnered with them to generate promotional images for its shows and help pre-visualise shows before production. Lionsgate partnered with them to train a new AI video model on its film and TV library, with Lionsgate planning to use the model on future projects. Lionsgate took an equity stake in Runway, and the two companies will start a joint development programme.
• Amazon MGM Studios launched the GenAI Creators’ Fund to finance AI-assisted projects, giving creators access to state-of-the-art AI tools, and announced three greenlit animation projects derived from the fund. Amazon Web Services (AWS) built the AI production platform Project Nara to be used for both animation and live-action productions and exclusively by Amazon MGM Studios and the creators financed by the GenAI Creators’ Fund.
• Netflix acquired InterPositive, a start-up founded by Ben Affleck that makes AI tools for filmmakers. InterPositive does not produce generative AI content but instead builds an AI model from a production’s dailies and then allows film-makers to use the model in the post-production process. The deal could reportedly be worth up to USD600 million, with the entire 16-person InterPositive team joining Netflix and Affleck serving as a senior adviser.
• Martin Scorsese partnered with Black Forest Labs, a generative AI start-up, to refine AI storyboarding models for his upcoming films.
• Darren Aronofsky’s AI-driven studio, Primordial Soup, partnered with Google DeepMind, Google’s AI research division, to access emerging generative AI tools and develop experimental short films.
• James Cameron joined the board of directors of Stability AI, the firm that developed the Stable Diffusion text-to-image generative AI model, which has the potential to become widespread in the film industry, particularly regarding visual effects.

Of course, there are unanswered questions about ownership, consent, and compensation, as well as concerns about decreased demand for labour. Globally, regulation is starting to emerge. In the US, in 2023, there is the NO FAKES (Nurture Originals, Foster Art, and Keep Entertainment Safe) Act of 2023. A number of legal disputes related to these issues are popping up. Also, in the US, the recently passed “One Big Beautiful Bill” conspicuously failed to include a proposed ten-year moratorium on state laws regulating AI, motivating states to enact AI legislation. The lack of a comprehensive federal AI law in the US leaves the industry with a legal patchwork. California has laws that require clear consent before using AI-generated content of a performer’s voice or likeness, including posthumous protection; Illinois has a similar law without the posthumous protection, and Tennessee has a law specifically to protect musicians from unauthorised use of AI-generated voice clones. There is also emerging, but varied, AI regulation outside the US that will affect the entertainment and media industry. The EU AI Act, adopted in 2024, provides relatively comprehensive regulation. Other countries like China have multiple laws comprising their AI regulations. In the UK, AI is mostly governed by existing regulators within specific sectors. Early signals offer a glimpse of what lies ahead, but Pandora’s box has only just been cracked.

Creator Economy

The creator economy is emerging as mainstream media’s successor, transforming how content is produced and monetised. Digital-native creators are more powerful than ever, edging closer to the top of the food chain as social platforms evolve into global distribution networks. Influencers, streamers, podcasters, and independent media entrepreneurs now operate fully integrated micro-media enterprises with direct access to their followers. TikTok, YouTube, Instagram, and Twitch enable creators to harness the value of their audiences using advertising, sponsorships, subscriptions, and tipping.

Podcasting has grown from a niche format to a mainstream media battleground. Amazon, Apple, Audacity and Netflix are dedicating substantial resources to podcasting. Video is now undeniably a crucial element comprising a podcast’s essence and value. Netflix’s exclusive video podcast partnerships with Spotify and iHeartMedia underscore its competition with television. Podcasts are the new talk shows. 

As the creator ecosystem matures, influencers are seeking greater returns, and private equity firms are leaning in. Slow Ventures launched a USD60-million investment fund targeting equity in creator start-ups, while the Creative Artists Agency (CAA) and TPG’s Integrated Media Company (IMC) formed a USD250-million holding company to acquire and operate creator-led businesses. As these models take hold, capital can be expected to continue flowing toward creator infrastructure, driving consolidation across platforms, talent management, and monetisation tools.

Entertainment Companies

The decline of linear TV is reciprocal to the dominance of streaming. YouTube and Netflix have emerged as default platforms for streaming content, while other platforms (Amazon Prime, Paramount+, HBO Max, Disney+, Peacock and Tubi) compete for market share. Most streaming services can finally say they are in profit after years of spending money to attract subscribers.

Amongst streamers, ad-supported tiers and platforms are growing. Ad-supported streaming will likely account for 55% of all industry revenue growth in the next five years. Netflix and others are shifting strategies by promoting their ad-supported tiers, cracking down on password sharing and investing in live events and sports. Consumers have discovered they do not need multiple subscriptions. Netflix’s ad-supported tier now accounts for about 45% of its new sign-ups and their ad revenue exceeds USD1.5 billion.

Meanwhile, the future of cable networks is uncertain. Versant (Comcast’s cable spin-off) includes MSNow, CNBC, USA Network, Oxygen, and E!. These platforms are shrinking but still throw off sizeable revenue. 

Netflix and Paramount entered into a dramatic bidding war for Warner Bros., with Paramount emerging as the winner. The new Paramount (with its formidable Warner Bros. assets) is seeing signs of early success when it comes to clearing regulatory hurdles, but the antitrust questions are not yet entirely answered.

Music and Catalogue Acquisitions

The music industry is generally in good health, supported by strong consumer demand and evolving ways to package, distribute and monetise. Music rights remain an attractive asset class, with catalogues being sold at strong valuations across genres and generations. Primary Wave acquired Britney Spears’ catalogue and HarborView Equity Partners acquired music and publishing assets from the estate of Quincy Jones. TikTok has disrupted marketing and catalogue valuation by resurfacing music and propelling streaming metrics seemingly overnight. Connie Francis’ “Pretty Little Baby,” released 63 years ago, surpassed 100 million Spotify streams in 2025 as a direct result of the algorithm’s reach. Music-recommendation systems on streaming platforms are also driving algorithmic-driven consumption patterns. TikTok and Universal Music Group (UMG) announced a licensing agreement, expanding catalogue access for creators and securing royalties (and promotion) for UMG artists. UMG struck a deal with Spotify, allowing premium subscribers to create AI-generated covers and remixes of songs from participating artists. Public sentiment remains divided. AI songs are charting, but a Hollywood Reporter survey found most Americans are uninterested in AI generated music. Recent copyright infringement disputes between AI start-ups and the major labels have evolved into licensing negotiations, with some labels striking deals allowing AI to train on their catalogues.

Experience Economy (Live Entertainment and Sports)

Live entertainment and sports are thriving, driven by strong consumer demand across various sectors, including concerts and festivals, comedy, live performances, Broadway, and diverse professional sports (traditional and emerging). This strong demand extends to the emerging social influencer and podcast tour sector, which saw a 500% spike in ticket sales in 2025. Global spending on live music has surged, surpassing pre-pandemic levels, while major sports leagues have generated record attendance from devoted fans and record media rights revenues through robust deal-making. The surge in live music spending has been fuelled by an era of mega-tours, the introduction of dynamic pricing, a rise in music tourism, and artists with true global appeal. On Broadway, the New York City Musical and Theatrical Production Tax Credit continues to be a tailwind. The credit, which was introduced in 2021, provides companies producing qualified productions with tax credits of 25% up to USD3 million per production. After a 27% pandemic-era dip in revenue, Broadway has just about returned to pre-pandemic sales.

Global sports rights' spending has reached a new high-water mark in 2026. The 9.6% year-over-year increase has been driven by quadrennial events like the World Cup and several notable deals. The NBA signed an 11-year media rights deal worth USD77 billion with Amazon, NBCUniversal, and Disney that took effect during the 2025-2026 season. All major US sports leagues now allow some form of institutional ownership, including private equity investment. Investor interest in the sector has accelerated. Mark Walter’s June 2025 acquisition of a majority stake in the Los Angelos Lakers for USD10 billion was the largest control-sale transaction in the history of US professional sports. Skyrocketing franchise valuations are largely a by-product of the increased global sports rights spend. Emerging sports categories, such as Formula One, UFC (Ultimate Fighting Championship), and crossover boxing events, are attracting both audiences and private capital. Meanwhile, women’s sports are gaining commercial momentum, with the Women's National Basketball Association (WNBA) breaking records both with attendance and media rights revenue.

A major settlement was reached in the House v National Collegiate Athletic Association (NCAA) lawsuit, resulting in a USD2.8-billion settlement that allows colleges to compensate athletes directly through revenue-sharing. This marks a significant shift in college sports, moving towards a pay-for-play model. The US sports betting industry is expanding, with 39 states now seemingly on board. The landscape continues to evolve. Prediction market apps like Kalshi and Polymarket have disrupted a decade-long gambling duopoly held by DraftKings and FanDuel. But their futures are not entirely certain, as legal challenges and legislation lurk around the corner.

Gaming

The video game industry went through a boom during the pandemic years and then a hangover of slowing growth but appears to be in recovery mode as developers and publishers manage rising costs, a tighter funding environment and shifting monetisation models. There are some notable highly anticipated titles being released, as well as refreshes to hardware which have successfully created enthusiasm for consumers. This has increased confidence and appetites for investors. Saudi Arabia’s Public Investment Fund (PIF), Silver Lake, and Affinity Partners’ USD55-billion acquisition of Electronic Arts (EA), a global leader in interactive entertainment, reinforces long-term growth plans, positioning gaming as a high-value target for both strategic and financial buyers. 

Deal activity is expanding across mid-market studios, AI-driven platforms, and esports ecosystems. In esports, the initial wave of rapid expansion and speculative capital has given way to a greater focus on long-term financial sustainability and scalable business models.

Gaming now offers parallel interactive business opportunities across various sectors in the entertainment industry. Game engines are increasingly used in film and television production, deepening creative and commercial ties. Global box office of The Super Mario Galaxy Movie sailed past USD1 billion, proving that gaming IP still carries substantial weight across the entertainment economy.