Key Takeaways
- The entertainment industry is expected to experience significant changes and growth in 2026, driven by new technologies and merger activity.
- Live events, movies, and TV shows will continue to attract large audiences, with brands finding new ways to tap into these audiences.
- The rise of free, ad-supported streaming TV (FAST) is expected to continue, with major entertainment companies investing in this area.
- Connected TV will benefit from the decline of search advertising spending due to the rise of agentic AI.
- Brands will focus on connecting with fandom and creating personalized experiences for consumers.
- The use of synthetic content and AI will become more prevalent in the entertainment industry, with companies like Disney and OpenAI partnering to integrate AI technologies.
Introduction to the Entertainment Industry in 2026
The entertainment industry is poised for a year of significant change and adjustment in 2026. With the limitations of the COVID pandemic firmly in the rear-view mirror, the sector anticipates consumers will indulge in movies and live events, and brands will find new ways to tap into those audiences. According to Michael Rapino, CEO of LiveNation, the company is seeing double-digit growth in ticket sales, and expects similar growth in sponsorships and hospitality revenues next year. This growth is driven by consumers’ desire for in-person experiences, with events becoming triggers for travel, community-building, and social sharing.
The Growth of Live Events and Sponsorships
LiveNation’s survey found that 97% of consumers want brands to play a bigger role in live events, and more than 70% of brands see lifts in consideration, purchase intent, and consumers reporting liking the brand more after sponsorship activations. Rising sponsorship costs are making it tougher for brands with smaller budgets, but brands are finding ways to integrate into those events—on special stages, exclusive areas, or other ways to enhance the fan experience. As Jordan Bortolotti, president of independent media agency Salt Media, noted, intellectual property such as sports and music are strong draws at a time when "the post-COVID epiphany is that it’s fun to be around people."
The Rise of Free, Ad-Supported Streaming TV (FAST)
The upcoming lineup of movies and TV shows is expected to be strong, with Walt Disney Co. CEO Bob Iger noting that the slate ahead is "about as strong as it’s been in a while, maybe stronger than it’s been in a while." Television, particularly FAST, will also experience a boom, with major entertainment companies placing bets on the channel. Roku has predicted that FAST channels will hit a 10% share of all TV viewership in 2026. As Sarah Harms, VP of Advertising Marketing and Measurement at Roku, noted, "The space available for intent-based ads is shrinking," and connected TV will benefit from the decline of search advertising spending due to the rise of agentic AI.
The Impact of AI on the Entertainment Industry
AI is also reshaping the fandom brands are counting on to maintain cultural relevance. Many brands expect to negotiate the use of synthetic content in entertainment in 2026, while at the same time protecting their IP. The recent licensing deal between Walt Disney Co. and AI platform OpenAI is a sign of the traditional media’s efforts to integrate those technologies, as the public increasingly adopts them. As Bortolotti noted, "It isn’t just about fandom. It’s about certainty, especially in a world of AI where so much content now is not real." AI is helping advertisers target and personalize streaming campaigns, and advertisers will need to deliver more creative ads with better production values and more relevant personalization.
Consolidation and Mergers in the Entertainment Industry
A wave of consolidation will continue to reshape streaming, as seen in the public takeover war between Netflix and Paramount over Warner Bros. Discovery. The takeover fight over HBO’s parent may be the marquee event of early 2026, but all entertainment companies are now anticipating a surge in mergers and consolidation as major players seek to strengthen their hand. Versant, the spinoff including its NBCU broadcast and cable channels and the Peacock streaming platform, will complete its separation from Comcast in the new year and is going to integrate a number of acquisitions in a bid to lessen its dependence on traditional media. As Mark Lazarus, CEO of Versant, noted, the company has "a mandate to build beyond cable, in fact, beyond media."
The Future of Streaming and Connected TV
The streaming market is ripe for consolidation, as viewers try to rationalize their subscriptions and continue to embrace FAST, especially among desirable younger demographics. After years of unbundling cable channels, viewers want simplicity in streaming, said Bortolotti. "The great rebundling is happening," he said. Ad-supported content is now the majority of streaming, and nearly all major streamers have ads. As Harms noted, "By 2026, we expect essentially 100% of viewers to see ads in some form," due to the growth in FAST services, hybrid subscription-plus-ads tiers in major platforms, and live sports in streaming. Connected TV is bound to benefit from the decline of search advertising brought on by AI agents, and advertisers will need to deliver more creative ads with better production values and more relevant personalization.