The UK is set to overtake Germany in becoming Europe’s biggest entertainment and media market in the coming years.
According to PwC’s latest Global Entertainment & Media (E&M) Outlook 2022-2026, revenue in this space is expected to reach £83bn this year, with a growth forecast of four per cent per annum over the next four years. By 2026, revenue is expected to hit £97bn.
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 E&M 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”
Growth continues to be driven by mobile internet access which is forecast to overtake fixed broadband access next year and then beyond and by the end of the forecast period account for 53 per cent of total internet access revenue.
With high levels of ecommerce and online shopping in the UK, businesses continue to deploy the majority of their advertising budgets online.
Internet advertising revenue is forecast to grow to £26bn this year and by six per cent per annum to 2026, which will equate to just over a third of overall E&M revenue.
Dan Bunyan, partner at PwC Strategy&, said: “Digital platforms will be underpinned by improving infrastructure. Mobile operators continue to develop their 5G propositions and the majority of broadband connections are expected to be high speed by next year. With more consumers than ever online, growth will be driven by brands engaging with people where they are, to build awareness and influence purchasing decisions.
“However, with geo-political and economic headwinds (including rising inflation) on the horizon, revenue growth may slow in the near future if advertising performance is not sustained or consumption reduces. However, the sector has shown strong underlying resilience against previous challenges.”
On top of this, the UK will continue to be the leading market for over-the-top (OTT) video in Western Europe and the third largest market globally after the US and China. Overall UK OTT video revenue is forecast to reach £3.6bn this year.
Virtual reality and mobile augmented reality revenue will almost double during the period. The UK will remain the largest VR market in Europe, Middle East and Asia and the growth for the sector is forecast to be driven primarily by video games content with the sector set to build on the success of the Meta Quest 2 headset.
Advertising will drive revenue in the UK’s mobile AR market with branded filters becoming more of an important vehicle on photo and video-sharing apps.