Spending across the U.S. entertainment and media industry could climb from $635 billion in 2016 to $759 billion in 2021, according to PwC's 18th annual Global Entertainment and Media Outlook report. However, that rising tide won't lift all boats.

PwC expects aging industries like newspapers and the traditional TV and home video markets to contract during that period. Other industries -- like books and movie theaters -- are expected to grow at a compound annual growth rate (CAGR) of about 1%.

Most of the growth will come from internet-based businesses, like online ads and streaming video, and interactive digital businesses, like virtual reality (VR), video games, and esports.

The projected CAGR of the US entertainment and media industry, 2016-2021.

Data source: PwC. Chart by author.

PwC's confidence in the VR market is unusual, since some analysts have been lowering their forecasts for the industry due to tepid sales of headsets and a lack of compelling VR content.

However, many investors remain bullish on video games in general and the prospect of esports gaining ground among mainstream viewers. Video games are well insulated from cord-cutters, who are derailing traditional media companies, and benefit greatly from the "stay at home" economy, which favors companies like Netflix and Activision Blizzard.

Leo Sun has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Activision Blizzard and Netflix. The Motley Fool has a disclosure policy.