UK entertainment and media market tops European charts with £100bn revenue hit
The UK’s entertainment and media market is expected to hit revenues of £100bn by 2027, according to PwC’s latest forecast.
The accounting firm’s Global Entertainment & Media (E&M) Outlook 2023-2027 also expects the UK to cling onto its top position in Europe as the leading E&M market over the next four years.
In 2023 the E&M market could generate £85bn in revenue but at a compound annual growth rate of four per cent this figure rises to £100bn.
Mary Shelton Rose, partner and UK technology, media and telecoms leader at PwC, said that while 2022 was a “challenging year” for the industry, a “new force” – generative AI – has now emerged.
“Going forward”, she said, “leaders must evaluate and embrace the potential power of AI holistically as an enabler for productivity and creativity”.
The E&M Outlook predicted the main influences driving the revenue will be internet advertising, virtual and augmented reality, and home and mobile internet spending.
Digital advertising, particularly internet advertising, is expected to capture the majority of advertising revenue, while TV advertising faces more challenging circumstances.
Partner at PwC Strategy&, Dan Bunyan, said “the internet advertising sector remains highly dynamic”.
Expenditure is shifting towards emerging channels like retail media and gaming, as brands reevaluate for the “most fruitful” ways of engaging online audiences, Bunyan said.
“This spending growth is underpinned by continued product innovation in the sector, as well as M&A activity to enable vendors to deliver these services”, he added.
By 2027 annual data consumption will double due to the growth of data services, streaming services, and social video platforms.
As audiences favour streaming over traditional television, subscription video on demand (SVoD) revenue is predicted to surpass TV subscriptions in terms of revenue by £0.1bn by 2025.
Cinema and out-of-home advertising are expected to return to pre-Covid revenue levels, indicating post-pandemic recovery and growth.
Bunyan said the E&M industry adds “significant value” to the UK and “brands and media owners should be confident to be on the front foot as the economy recovers and consumer confidence returns”.