Pay TV accounted for 86% of global video entertainment spending in 2016, but SVOD is growing fast, according to a new report from Futuresource Consulting.

Overall, consumer spending on global home video entertainment grew 3% to $251.5 billion in 2016 from the previous year, Futuresource said. The consulting firm expects

the market, which includes pay TV, digital video and packaged video, to grow by 3% annually to $280 billion by 2020.

“SVOD was the standout performer of 2016 and momentum is expected to continue well past 2020,” said Tristan Veale, market analyst at Futuresource.

Futuresource expects global SVOD subscriptions to nearly double by 2020, to 485 million, from roughly 236 million at the end of 2016.

Read more at broadcastingcable.com.

Spending on media and entertainment is expected to rise by about 5% in the U.S. in the next five years to $723 billion, as consumers continue to blur the lines between digital and traditional media, according to a recent report by PriceWaterhouseCoopers.

In its Global Entertainment and Media Outlook 2015-2019, PwC estimates that total media and entertainment spending will rise 5.1% worldwide to $2.23 trillion by 2018. PwC says the difference between digital and traditional media is irrelevant to consumers, who place the most emphasis on choice.

Still, U.S. digital spending is expected to grow at 11.1% per year over the next five years and account for 46% of overall U.S. E&M spending growth, up from 34% in 2014.

“In today’s multi-platform environment, E&M companies must take a hard look at the talent, organizational structure and alignment of performance measures with overall strategy across their entire business,” said PwC’s U.S. entertainment, media & communications leader Deborah Bothun in a statement. “While this may seem self-evident, it remains a major challenge that many companies are struggling to overcome as they transform their operations to engage today’s consumer. Mastering the user experience will be the critical success factor for monetizing consumers and sustaining growth.”

U.S. advertising revenues are expected to rise at a 3.5% annual rate, increasing from $193.8 billion in 2014 to $230 billion in 2019, according to PwC. In the U.S., Internet and video games advertising, both forecasted to grow at 11.1%, is expected to continue to dominate the landscape. Internet advertising is projected to overtake U.S broadcast TV advertising (2.5% CAGR) in 2018. Mobile and video Internet ads are expected to drive digital advertising growth, with mobile expected to surge to 25.6% growth in 2019.

The rise of over-the-top (OTT) video services is further changing advertising. As viewers migrate from traditional networks to digital alternatives, advertisers will follow, driving broadcast TV advertising’s share of U.S. total TV advertising down from 95% in 2014 to 91.6% in 2019.

In the U.S., digital out-of-home advertising revenue is expected to rise at a 9.8% annual rate.

“Amidst the proliferation of content and access options, it’s clear that consumers are demanding more flexibility, freedom and convenience regarding when and how they consume content,” said, PwC’s U.S. advisory entertainment, media & communications leader Joe Atkinson in a statement. “They want it on-demand, on mobile and are readily engaging with content experiences that they can’t get elsewhere. This has re-energized the enduring appeal of shared, real-life experiences, such as cinema and live sport and music events, which has survived during the growth of digital. In creating new offerings, E&M businesses will need to consider attributes that combine an outstanding user experience, attractive content assortment, smart discovery and a connected social community delivered through an intuitive interface that offers increased personalization and access across devices.”