An Introduction to Investing in Media and Entertainment

A Nearly $3 Trillion Industry, and Steadily Evolving

Americans spend roughly six hours a day consuming media and entertainment (M&E).¹ The content they stream, the games they play, the concerts they attend, the ads they click on—all of it adds up to one of the largest and most dynamic sectors in the global economy (Exhibit 1).

How large? The global M&E industry generates nearly $3 trillion in revenue and is on pace to reach $3.5 trillion by the end of the decade, growing at a rate that may outpace global GDP growth.²

Those are big numbers. They’re also part of the reason private markets investors are paying closer attention. The industry’s headline growth rate may appear modest, but applied to a nearly $3 trillion base, even steady single-digit growth has the potential to translate to hundreds of billions in incremental new revenue over time. For financial advisors exploring private markets investments, M&E is a sector built on long-duration intellectual property, recurring revenue models, and structural demand that continues to create meaningful value even in a maturing market.³ And as capital flows into adjacent areas like sports investing, the broader sports, media, and entertainment ecosystem continues to evolve.

What Is Media and Entertainment Investing?

M&E spans movie and television studios, streaming platforms, video and mobile game developers, music labels and rights holders, digital and social media platforms, live entertainment and event businesses, advertising and brand marketing platforms, sports-adjacent media ventures, and more. For example, it’s the studio that owns the franchise, the platform that streams it, the label that owns the soundtrack, and the arena where the artist tours.

What ties these businesses together is a shared and finite resource: consumer attention. As content becomes more abundant and accessible, that attention—how people allocate their time, their focus, and ultimately, their dollars—has become a highly contested commodity. That spending has also shown durability. Historically, consumer spending on M&E-related services has tended to grow even during recession periods.⁴

This pattern may partly explain why the sector is attracting increased attention from private markets investors.

How Do Media and Entertainment Companies Make Money?

The industry is vast, but many M&E businesses tend to monetize one or more of three core assets: intellectual property (IP), distribution and attention, and experiences.

Intellectual Property

IP is the foundation. Revenue here is tied to owning and controlling rights such as copyrights, trademarks, characters, franchises, and catalogs. Think licensing and royalties, synchronization fees (i.e., music placed in films, ads, or games), derivative rights like sequels and adaptations, and merchandising. The music industry provides a clear illustration. Revenue from consumers, advertisers, and licensing flows through a layered ecosystem of streaming services, labels, publishers, and rights organizations before reaching the underlying rights holders, with the distribution at each layer depending on the specific rights involved.

Distribution and Monetization

This is where scale meets monetization. Subscriptions (e.g., streaming video, music, gaming); advertising across TV, digital video, social media, and podcasts; and affiliate fees in traditional pay-TV models all fall here. The ability to aggregate large audiences and monetize them, whether through ads or subscriptions, has become a defining competitive advantage in M&E. It’s also the battleground where legacy media companies and tech platforms are competing most aggressively. The ongoing competition for streaming subscribers between legacy studios like Disney and Warner Bros. Discovery and tech platforms like Amazon, Apple, and YouTube illustrates how distribution has become a central front in the fight for audience share.

Live Experiences

Experiences round out the picture. Ticketing, sponsorships, on-site spending, touring—these are real-world, time-bound revenue streams. And despite the digital shift, consumers continue to spend most of their entertainment budgets offline. Non-digital formats have consistently accounted for most of consumer M&E spending, a pattern expected to hold through at least the rest of the decade.⁵ Global cinema box office spending is expected to rise from $33 billion in 2024 to $41.5 billion by 2029.⁶ And at the high end, the economics can be striking: in 2024, the highest-grossing US arena, Las Vegas’ Sphere, generated $367 million in revenue from just 70 shows.⁷ One aspect that makes M&E particularly interesting from an investment perspective: businesses that combine all three may be positioned to compound value over time. A studio owns the IP, distributes it through a proprietary streaming platform, and extends the franchise into theme parks, merchandise, and live events. Each layer reinforces the next, a flywheel where a single piece of IP can generate revenue across multiple channels over many years.

How M&E Is Entering the Private Markets Landscape

A decade ago, M&E was rarely part of the private markets conversation. That’s changing, and the shift reflects several structural characteristics of the sector.

Rights and Royalties: Recurring, Extended-Horizon Cash Flows

Music copyrights and other royalty streams have the potential to generate recurring cash flows over extended periods, supported by expanding monetization channels like streaming and synchronization. Better data and broader distribution have helped establish these assets as investable at scale. At the same time, the M&E opportunity set extends beyond income-oriented strategies; investments in content studios, platform businesses, and creator-economy infrastructure may offer growth-oriented exposure to the sector.

Dedicated Managers Are Building Around the Thesis

The emergence of fund managers focused specifically on M&E—building strategies around content ownership, media rights, and related verticals, often alongside sports investments as part of a broader sports, media, and entertainment thesis—suggests the sector is developing a broader set of dedicated strategies than it has historically.

Industry Disruption May Create Opportunity

The M&E sector is under meaningful structural pressure, from fragmented consumer attention to competition from technology platforms. But disruption also has the potential to reprice assets and create entry points. The sector has already seen meaningful consolidation activity in recent years, from studio mergers to platform acquisitions, as companies seek scale to compete with larger technology platforms. That trend may continue as smaller operators face pressure on content costs and distribution reach.

What’s Driving Media and Entertainment Investing Forward?

M&E has always evolved alongside technology. But the current cycle is notable both in scope and speed. Three forces stand out.

1. AI is rewriting the cost structure of content. Across the value chain, artificial intelligence is changing what it takes to create, distribute, and monetize media. AI is being used to recommend and surface content more effectively, help game developers predict player behavior, reduce production timelines for film and music, and expand the addressable market through automated localization and translation. One implication for investors: content that was once expensive and slow to produce may become faster and more efficient to create, potentially improving the unit economics of the businesses behind it.⁸

2. Advertising has become the industry’s growth engine. This is one of the most important shifts in M&E economics. US advertising revenue has surpassed $250 billion and is projected to approach $400 billion by the end of the decade, growing nearly three times as fast as consumer spending in the sector.⁹ As subscription price increases become harder to sustain, data-driven advertising is stepping in as a primary source of revenue expansion. Major tech platforms now generate tens of billions annually in advertising revenue, underscoring how central ad-supported models have become to the M&E space. For advisors evaluating M&E businesses, the advertising model and the data infrastructure behind it are increasingly a value driver for M&E.

3. The creator economy is reshaping content creation and distribution. Perhaps the most visible change in M&E is that you no longer need a studio to reach an audience. Independent creators, powered by social platforms and algorithmic distribution, are commanding a growing share of attention, particularly among younger consumers. Younger consumers increasingly report that social media content is more relevant to them than traditional TV and movies.¹⁰ Spending on social video advertising has grown rapidly and is now the largest category of digital advertising.¹¹ The economics of content have expanded from scarce, slow, and expensive to abundant, fast, and free. And the industry is building a new class of businesses around that shift.

Risks and Considerations of M&E Investing

There may be real potential in M&E, but there are also risks. Advisors should weigh both sides carefully.

Consumer Preference Shifts

Consumer preferences move quickly, and the competition for attention is intensifying within a relatively fixed pool of consumer time and spending. M&E businesses are often fighting for share within a constrained pool of hours and dollars. Models that fail to adapt risk losing relevance. Subscription-based models can also be sensitive to consumer spending pressure, particularly as households face rising costs across other categories.

Technological Disruption Technological

Disruption is a constant. Consumer behavior continues to shift, from broadcast to streaming, from long-form to short-form, from appointment viewing to algorithmically curated feeds. Legacy media companies face intensifying competition from tech platforms with structural advantages in data, distribution, and capital. Over time, AI may also challenge certain IP protections as the cost of generating content-like outputs continues to fall.

Regulatory and Macroeconomic Pressure

Advertising, while growing, remains cyclical. Economic downturns often compress ad budgets, and shifts in platform dynamics or regulatory frameworks can redirect where those dollars flow. The sector’s increasing reliance on advertising as a revenue engine may introduce exposure to broader macroeconomic conditions.

The regulatory landscape is also evolving. Antitrust actions targeting major technology platforms and sports leagues could alter how content is distributed and how advertising inventory is priced. Data privacy regulations like restrictions on behavioral tracking may limit the precision of ad targeting, potentially affecting the revenue models that many M&E businesses rely on.

And like many alternative investments, private markets M&E strategies carry risks including illiquidity, limited transparency, and the possibility that invested capital may not be returned. The sector is complex—interconnected factors spanning IP ownership, distribution agreements, consumer engagement trends, and technology adoption drive value. Advisors are encouraged to review all offering materials and understand the specific risk profile of each category.