Shaping Future Music and Immersive Experiences

Executive Summary

The entertainment industry is undergoing a profound transformation, propelled by rapid technological advancements and evolving audience expectations. The demand for more engaging, interactive, and immersive experiences is surging across various sectors, from live music and performing arts to dedicated immersive attractions.

This report examines the current state of the global entertainment market, explores the impact of emerging technologies such as artificial intelligence (AI) and extended reality (XR), and analyses how these innovations are reshaping the creation, delivery, and consumption of entertainment. Key findings indicate significant growth in online entertainment and live music, the transformative power of AI in content creation and personalisation, the expanding role of VR, AR, and XR in delivering immersive encounters, and the emergence of new sensory technologies that promise to further enrich entertainment experiences.

For specialists in immersive experiences and custom technology builds, these trends present both significant opportunities and potential challenges in leveraging these advancements to create innovative and memorable performances for venues and artists.

The Current State of the Global Entertainment Industry

The global entertainment landscape is characterised by robust growth, particularly within the online sector. Projections indicate that the online entertainment market will expand from USD 101.82 billion in 2024 to approximately USD 338.96 billion by 2034, demonstrating a compound annual growth rate (CAGR) of 12.78%. This substantial increase reflects a growing preference for online media channels, driven by factors such as the rising popularity of over-the-top (OTT) platforms and increased internet penetration.

This digital shift, however, coexists with a thriving broader entertainment and media market, which reached USD 2.8 trillion in revenue in 2023 and is anticipated to reach USD 3.4 trillion by 2028. Traditional segments like live music events and cinema box office collections continue to contribute significantly to this expansion, experiencing year-on-year growth . Notably, the United States remains the largest single market within this global industry.  

Live music is experiencing a significant resurgence, with the global market estimated to grow from USD 28.1 billion in 2023 to USD 79.7 billion by 2030, exhibiting a CAGR of 16.1% . Another analysis suggests a growth of USD 35.56 billion between 2024 and 2028, representing a CAGR of 17.38%. This growth is fueled by a strong consumer demand for authentic musical experiences and a growing trend among younger generations to prioritise experiences over material possessions.

Revenue streams in this sector are diverse, encompassing traditional ticket sales, merchandise, and concessions, alongside increasingly popular virtual and hybrid concert experiences. The sheer scale of the live music industry is evident in the performance of major players like Live Nation, which reported 151 million attendees and USD 23 billion in revenue in 2024, marking a 3% increase from the previous year.  

The performing arts sector, encompassing a wide array of live performances, also presents considerable market opportunities. Estimates for the United States market in 2024/2025 range from USD 42 billion to USD 46 billion , while global figures reached USD 192.75 billion in 2024 and are projected to expand significantly. Revenue generation in this segment relies on ticket sales, supplemented by grants, sponsorships, and increasingly, digital distribution methods such as live streaming. The increasing adoption of digital platforms by artists and performing arts companies indicates a growing openness to leveraging technology for performance and audience engagement.  

The market for immersive attractions is experiencing particularly rapid expansion. In the United States alone, revenues from immersive experiences reached USD 3.9 billion in 2024, demonstrating an impressive average annual growth rate of 21% since 2019 . Globally, the immersive display market in entertainment was valued at USD 3.2 billion in 2024 and is projected to grow at a CAGR of 24.7% from 2025 to 2030 . The broader immersive entertainment market is even larger, valued at USD 114.37 billion in 2024 with an anticipated CAGR of 26.3% from 2025 to 2030 . This remarkable growth is driven by a strong and increasing consumer appetite for unique and engaging entertainment options, particularly among younger demographics . Revenue in this sector is primarily generated through ticket sales, with additional potential from merchandise and premium offerings.  

Immersive Entertainment: Case Studies and Technological Foundations

The emergence of dedicated immersive entertainment venues highlights the growing sophistication and audience appeal of these experiences. The Sphere in Las Vegas stands as a prime example, boasting massive LED screens and advanced spatial audio systems to create captivating environments for concerts and other large-scale events, accommodating approximately 20,000 attendees . The success of residencies by renowned artists like U2 and Dead & Company at the Sphere underscores the strong positive reception for high-fidelity immersive concert experiences . The venue's versatility extends beyond music, as demonstrated by its use by the National Hockey League (NHL) to project graphics during their draft , indicating potential applications for immersive technology across various entertainment forms.  

Cosm offers another model for immersive entertainment, providing "shared reality" facilities equipped with large LED screens and spatial audio, but with a focus on more localised and frequent use, and a smaller capacity of around 2,000 seats . Their programming includes immersive broadcasts of sports events, captured using specialised cameras , illustrating another viable application for this technology. This suggests that immersive experiences can thrive in both large, destination venues and smaller, community-oriented spaces.  

Beyond these flagship venues, numerous other examples showcase the diverse applications of immersive technologies. Interactive museums and educational spaces are increasingly incorporating virtual reality (VR), augmented reality (AR), interactive displays, and touch-screen technology to transform the visitor experience from passive observation to active participation . Mixed reality (MR) is playing a transformative role in theme park attractions, blending the physical and digital realms to create unprecedented levels of engagement . Augmented reality art installations are overlaying digital content onto physical spaces, offering dynamic and interactive encounters with art . Immersive rooms, utilising projected visuals on all surfaces, create highly engaging environments for a variety of purposes . Experiences like Phantom Peak's open-world adventure in London, which combines interactive elements with theatrical presentations , and Artechouse's regularly updated extended reality art exhibitions, demonstrate the potential for large-scale, evolving immersive narratives.  

These immersive experiences are built upon a foundation of advanced technologies. High-resolution LED displays provide the visual fidelity necessary for compelling environments . Spatial audio systems create a sense of presence and realism by positioning sounds within a three-dimensional space . Virtual reality and augmented reality headsets and technologies allow for deep immersion and the blending of digital and physical worlds . Projection mapping can transform ordinary surfaces into dynamic visual displays . Motion tracking sensors enable interactivity by detecting and responding to user movements . Interactive displays and touchscreens provide direct engagement with digital content . The positive reception of these immersive experiences is evident in the strong attendance at venues like the Sphere and the increased preference for immersive theatre over traditional formats . High engagement rates with AR filters and interactive advertisements on social media platforms further indicate a growing audience appetite for this type of entertainment .  

The Integration of Artificial Intelligence in Entertainment

Artificial intelligence is rapidly becoming an integral component of the entertainment industry, impacting various aspects from content creation to personalised experiences. In music, AI algorithms can now generate music that mimics the styles of established artists , offering both new creative avenues and raising questions about authenticity and intellectual property . AI tools are also assisting artists with crucial aspects of music production, including composition, arrangement, and mastering , democratising music creation and enhancing the quality of independent productions. The influence of AI extends to film and video, where it is being used for visual effects, automated lip-syncing for foreign language films, and even the generation of short cinematic pieces , streamlining production workflows and potentially reducing costs.  

AI plays a significant role in personalising entertainment experiences. Streaming platforms utilise AI-powered music discovery tools and personalised playlists to cater to individual user preferences, demonstrating the technology's effectiveness in understanding and responding to audience tastes.

In live music, AI has the potential to personalise setlists based on fan data, allowing for more tailored and engaging performances. Furthermore, AI can customise content within immersive experiences based on an individual's interactions and behaviour, leading to highly personalised and satisfying user engagements.  

The integration of AI into interactive installations is opening new frontiers in artistic expression. AI can analyse audience behaviour in real-time and dynamically adapt the installation, learning from repeated interactions to create evolving artistic experiences . For instance, installations can respond to facial expressions, movement, sound, or touch.

AI also enables novel forms of interaction, such as voice-controlled or text-based engagement with the artwork. Moreover, AI algorithms can generate unique visual or auditory content for installations in real-time, resulting in endlessly variable and captivating artistic outputs.

Looking ahead, AI is poised to take an even more central role in entertainment, potentially leading the creative process in areas like scriptwriting, music composition, and even film direction . It also holds promise for enhancing music education, facilitating collaboration among musicians, and automating the process of copyright detection .  

The Extended Reality Spectrum: VR, AR, and XR in Entertainment

The extended reality (XR) spectrum, encompassing virtual reality (VR), augmented reality (AR), and mixed reality (MR), is fundamentally changing how audiences engage with entertainment. Virtual reality creates fully immersive digital environments, effectively isolating users from their physical surroundings . This technology has found widespread adoption in the gaming industry, offering deeply engaging and realistic experiences . VR is also revolutionising the consumption of movies and live events, providing options for virtual attendance and 360-degree perspectives that traditional media cannot replicate . The market for VR software and hardware is substantial and continues to grow, reflecting its increasing importance in the entertainment landscape .  

Augmented reality, in contrast, overlays digital information onto the real world, enhancing the user's perception and interaction with their existing environment. AR has also made significant inroads into gaming, blending virtual elements with the real world, as famously demonstrated by games like Pokémon GO. It is increasingly being used to enhance live events through digital projections and interactive visual effects, adding layers of engagement to traditional performances. Furthermore, AR is becoming a popular tool in marketing and advertising, offering interactive experiences that can significantly boost brand engagement.  

Extended reality serves as an overarching term that includes VR, AR, and MR, representing the convergence of the physical and digital worlds to create immersive and interactive experiences. XR is transforming entertainment and events by offering a wide spectrum of possibilities for creative expression and audience engagement. It is anticipated that XR technologies will move beyond early adopters and see widespread mainstream adoption across various industries in the coming years , with significant global market growth projected.  

Several successful implementations highlight the transformative potential of VR and AR in entertainment. Travis Scott's virtual reality concert within the game Fortnite attracted millions of viewers, showcasing the potential of immersive digital performances. Björk's VR album experience allowed fans to step inside a virtual world and engage with her music in a 360-degree environment. The Weeknd's augmented reality performance on TikTok offered an innovative and interactive experience combining music with AR. Gorillaz's augmented reality concerts in major cities like New York and London allowed fans to experience the virtual band performing live through their smartphones. U2's eXPERIENCE + iNNONENCE Tour incorporated remarkable AR elements into their live performances . Even major music festivals like Coachella have embraced AR stages, enhancing the visual experience for attendees .  

Emerging Technologies Beyond the XR Realm

While XR technologies are at the forefront of immersive entertainment, other emerging technologies are poised to further revolutionise the industry. Haptics, for example, adds a crucial tactile dimension to digital experiences, enabling users to feel touch, pressure, and movement within virtual environments . The integration of haptic feedback, through devices like suits and gloves that synchronise with music or virtual events , can significantly enhance the sense of immersion and realism. Spatial audio represents another key advancement, creating immersive soundscapes where sounds realistically move around the user, adding depth and believability to the experience . High-quality spatial audio systems, as utilised in venues like the Sphere and Cosm , are essential for creating truly engaging immersive environments.  

Interactive displays offer another avenue for enriching entertainment experiences, allowing for direct engagement with digital content through touch, gestures, or other forms of interaction. These displays can transform passive viewing into active participation and are increasingly being used in museums, educational settings, and potentially live events. The continued rollout of 5G connectivity promises to provide the high speeds and low latency necessary for seamless real-time interactions and personalised content delivery in immersive experiences, particularly crucial in large venues. Finally, edge computing, which processes data closer to the source, can significantly reduce latency and facilitate the real-time creation and delivery of content, enhancing the responsiveness and interactivity of immersive experiences, especially in live settings.  

The Transformation of Artist-Audience Engagement

The integration of technology is profoundly altering the way artists connect with their audiences. Virtual and hybrid concerts are breaking down geographical barriers, allowing artists to perform for fans across the globe without the constraints of physical venues . VR and AR technologies provide artists with new digital canvases to express their creativity, enabling them to design stunning visuals and surreal effects for live performances that were previously impossible . These technologies also foster enhanced interactivity, with fans able to choose their viewing angles, interact with virtual environments, and even engage with virtual avatars of their favourite artists . AI further contributes to this transformation by enabling the personalisation of setlists and content based on fan preferences and behaviour, leading to more tailored and memorable experiences.  

Virtual reality platforms are creating new spaces for social interaction among fans, allowing them to meet, interact, and share the concert experience in virtual environments, fostering a sense of community even when physically apart . Artists can also leverage VR for virtual meet-and-greets, offering more intimate and exclusive interactions with their fans . Augmented reality provides additional avenues for engagement, with artists able to share behind-the-scenes and bonus content through social media platforms . These evolving forms of engagement are strengthening the connection between artists and their audiences, creating new opportunities for interaction and fostering deeper loyalty.  

Future Horizons: Applications Across Entertainment Sectors

The future of entertainment will be significantly shaped by the continued integration of immersive experiences and emerging technologies across various sectors. In concerts and festivals, the trend towards virtual and hybrid events is expected to continue, with increasingly sophisticated VR/AR/XR integration offering more immersive and interactive experiences. The emergence of "avatar gigs," utilising AI and holograms, may extend the performing careers of iconic artists. Festivals are also likely to incorporate more interactive installations and VR-based performances.  

Museums are poised to further embrace AR/VR for creating interactive exhibits that bring artifacts and historical events to life, offering virtual tours that allow for remote exploration . AI-driven art installations that adapt to visitor interaction will likely become more common . Theme parks will likely see an expansion of MR attractions that seamlessly blend physical sets with virtual elements, offering unprecedented levels of immersion . Virtual reality theme parks, providing fully digital adventures with cutting-edge technology and personalised experiences, represent another potential growth area . In theatrical performances, AR projections can create dynamic visual effects synchronised with live action, while VR can offer immersive theatrical experiences for audiences unable to attend in person. AI may also play a role in generating live scripts and providing pose analysis for innovative storytelling and scholarly purposes.  

Conclusion

The entertainment industry stands at an exciting juncture, with technological advancements driving a fundamental shift towards more immersive and interactive experiences. The robust growth across online entertainment, live music, performing arts, and dedicated immersive attractions underscores a strong consumer appetite for these evolving forms of entertainment. Technologies like AI and XR are proving to be transformative, enabling new forms of content creation, personalised engagement, and unprecedented levels of immersion. The emergence of sensory technologies like haptics and spatial audio promises to further enrich these experiences, while advancements in connectivity and computing power will facilitate seamless and high-fidelity delivery.

For specialists in immersive experiences and custom technology builds, this evolving landscape presents a significant opportunity to leverage their expertise to create innovative and memorable performances for venues and artists. By strategically embracing these technological advancements, understanding audience expectations, and navigating the inherent challenges, they can position themselves as leaders in shaping the future of entertainment.