After a brief decline during the pandemic, the global entertainment and media industry is poised for strong growth – and will approach a value of $3 billion by the end of 2026. New research suggests that the UK will be the leading market in Europe in that same time.
The UK’s entertainment and media market is set to continue gaining ground on its closest competitors, according to a new study from PwC. By 2026, it is expected to be worth almost £100 billion, which will see the national market overtake Germany.
According to the study, digital consumption is the key driver of entertainment and media growth – something which may have given it an edge on its nearest rivals.
One of the strengths of the UK is the ready availability of high speed internet access, and during lockdown, this helped facilitate a huge spike in ecommerce, the effects of which are still being felt. As a result, UK entertainment and media revenue is already expected to reach £83 billion this year.
High levels of ecommerce and online shopping in the UK have also changed how businesses deploy their advertising budgets online – further adding to the entertainment and media revenue of the UK.
Internet advertising revenue is forecast to grow to £26 billion in 2022, and is anticipated to rise by 6% per annum to 2026. This will equate to just over one-third of overall entertainment and media revenue, and help the wider sector to enjoy 4% expansion per year for the next four years – the second fastest growth rate in Western Europe – generating revenues of an estimated £97 billion.
The global market is set to hit a combined value of $2.9 trillion. It is set to average growth of 4.6% in that time, however, the rate of growth is set to slow significantly toward the end of PwC’s allotted timeframe – falling to 3.1% by 2026, compared to the UK’s 4% growth.
Mary Shelton Rose, partner and UK Technology, Media and Telecoms Leader at PwC, said, “The UK entertainment and media market is forecast to emerge from the past few years of uncertainty to greater clarity about the underlying forces driving sustainable growth. A vision of what the dynamic entertainment and media landscape will look like in 2026 is coming into focus – an industry that is more digital, more mobile, and more dependent on advertising in all its forms.”
To that end, the UK’s entertainment and media growth will also be led by mobile, with mobile internet advertising accounting for two-thirds of internet advertising revenue by the end of the forecast period. The ramping up of mobile will also enable consumers to continue investing in over-the-top (OTT) video providers – even as people once more spend less time at home – making it the leading market for OTT in Western Europe and the third largest market globally after the US and China.
Overall UK OTT video revenue is forecast to reach £3.6 billion this year, before growing at 6% each year to 2026.
Dan Bunyan, partner at Strategy&, added, “OTT video has been one of the biggest beneficiaries of the shift to spending more time at home and the UK market is proving to be one of the largest markets globally for the biggest players.”
“While we expect growth to fall back to a more modest rate, we expect some price increases in services to drive revenue in the forecast period since the pool of potential new subscribers gradually reduces. More OTT video providers venturing into live sport will also present new opportunities and options for consumers.”