Gaming, on mobile and PCs, is by far the fastest-growing sector globally within the media and entertainment industry, data from PwC finds. Streaming video is also experiencing explosive growth.

Why it matters: While these sectors were always poised to get bigger as the internet developed, the pandemic has seriously expedited their growth, forcing the world’s biggest media companies to reorient their businesses faster than many were prepared to do.

Driving the news: A slew of new media mergers shows that entertainment giants are moving quickly to consolidate even further in order to have enough content at scale to compete in streaming.

• The recently announced Discovery-WarnerMedia deal has triggered a new round of merger action as its peers scramble to meet its size.
• Shortly after the deal was announced, Amazon said it would buy MGM Studios, one of the last remaining independent movie studios in the country.
• That deal then sparked a new conversation among analysts and media insiders about which company would be next.
• AMC Networks and Lionsgate are considered ripe targets. Rumors about deals with Comcast’s NBCU and ViacomCBS have also gotten attention.

Be smart: While traditional media giants focus on getting bigger to compete with tech giants, tech giants are eyeing an even bigger fish: gaming.

• Netflix is reportedly hiring a gaming chief as it seeks to expand even further into games, particularly on mobile.
• Google, Microsoft, Apple and Amazon have increased their investments in cloud gaming, with an eye toward making more money from video game subscriptions.

The big picture: Gaming is growing so fast, it’s poised to one day surpass pay-TV subscriptions in revenue.

• Pay-TV is defined as live TV content that consumers pay via subscriptions, like cable, satellite, or live digital TV packages that are often referred to as “skinny bundles.”
• Pay-TV is in terminal decline in the U.S., and faces a similarly bleak outlook abroad as broadband becomes more accessible globally.
• For a long time, many of the country’s biggest content companies, like Disney, ViacomCBS, and Comcast/NBCU made most of their money from Pay-TV subscriptions and advertising.
• Those companies are the ones that are struggling the most to balance investments in streaming, because for now, Pay-TV is still big enough to sizable drive revenues and profits.

What to watch: Other sectors like esports and digital audio are growing, but are still small compared to gaming or video.

• Esports in particular is growing very fast, but because the industry is still so young, the revenue potential right now is relatively very small.
• Print and cinemas show little sign of growth as the internet allows more people to consume content on their phones or via streaming TVs at home.