AI and 5G Propel Spanish Digital Entertainment Sector to Strong Growth by 2029

Spain's digital entertainment industry is on a trajectory of sustained growth through 2029, driven by transformative technologies such as artificial intelligence (AI) and 5G, which are reshaping user experiences and driving sector expansion. According to a report on the Spanish market, the entertainment sector is expected to grow annually by 2.7%, propelled by technological advancements and an evolving digital ecosystem.

Online advertising is at the forefront of this growth, with forecasts indicating a 6.5% annual increase, rising from €5.047 billion in 2025 to €6.915 billion by 2029. Connected TV advertising is particularly booming, projected to expand at a rate of 10.2% annually to nearly €1.95 billion. The over-the-top (OTT) video segment, with services like Netflix, Prime Video, and Disney+, is set to grow by 9.3% annually, surpassing €4.816 billion by 2029. This growth is supported by increases in both paid subscriptions (9.4% annually) and ad-supported models (18.2% annually). Meanwhile, traditional television advertising and subscription revenues are expected to decline by 1.6% yearly.

AI's role is transformative, optimizing content production, enhancing user engagement, and improving platform interactions. Daniel Martínez of PwC Spain highlights AI as a pivotal element changing the dynamics of the industry. Meanwhile, the video game sector is forecasted to grow at 5.2% annually, and live music concerts alongside digital outdoor advertising are anticipated to see growth rates of 3.1% and 9.7%, respectively.

The introduction of 5G technology significantly enhances real-time interactions, particularly in live gaming. For example, online casinos benefit from 5G’s ultra-low latency, reducing delays to mere milliseconds and enabling seamless live dealer experiences with high-definition graphics and videos. AI further secures and personalizes gaming experiences by monitoring transactions, recommending games, and assisting players in real time.

However, the integration of these technologies is not without challenges. Industry operators must invest in infrastructure and address new data security risks. Ethical considerations and transparency in AI algorithm use are paramount to maintaining user trust. Operators who successfully navigate these challenges are poised to lead the future of Spain’s digital entertainment landscape.

In summary, the combined impact of AI and 5G is reshaping Spain's digital entertainment industry, driving substantial growth and innovation as technology, data, and user demands converge. This technological evolution is reformulating market dynamics and setting new standards for digital engagement.