The UK’s entertainment and media industry is forecast to return to growth this year and continue to grow over the next four years driven by sectors liberated from Covid restrictions according to PwC’s latest Global Entertainment & Media (E&M) Outlook.
By 2025, the UK is set to overtake Germany as the biggest E&M market in Western Europe by revenue.
After the Covid pandemic caused total UK E&M revenue to fall 5% in 2020, PwC forecasts growth will rebound 9% this year and over the forecast period at a compound annual growth rate (CAGR) of 5% outpacing the expected growth in E&M revenues at a global level. By 2025, the UK’s E&M sector is expected to be worth £88bn with only the US, China and Japan worth more globally.
Mark Maitland, UK head of Entertainment and Media at PwC, said:
These forecasts have been made against the background of an improving economic outlook. However, the UK recovery could yet be impacted by further lockdowns, so E&M forecasts may continue to evolve. We anticipate a number of disrupted sectors will see a strong growth trajectory in 2021 and 2022 e.g. Cinema, B2B Events, Live Music, and Out of Home as lockdown restrictions are eased.
Changing consumer behaviours, adoption of digital platforms and new distribution channels have led to a number of structural changes in some sectors. These will take time to recover and/or may not return to pre-pandemic levels. Total cinema revenue isn’t forecast to return to pre-pandemic levels, and B2B Events will not return to previous levels for a number of years.
The UK’s position as an early and heavy adopter of digital solutions has accentuated some key trends such as consumer spend on over-the-top (OTT) video streaming. Its forecast spend on OTT video will grow 14% in 2021, outpacing global growth and set to rise at a CAGR of almost 8% to 2025. Internet advertising has also benefited from the nation’s high level of digital maturity, use of online/social platforms and ecommerce activity.
Internet advertising outperformed expectations in the pandemic, growing overall by 5% in 2020 (with display advertising increasing by 11%) as non-digital advertising saw double digit declines. This divergence reflects how digital gained share during the pandemic as consumers moved quickly to online platforms for content, commerce, entertainment and games. Digital advertising is forecast to continue to forge ahead, rising at a CAGR of almost 8% over the next four years, twice as fast as non digital.
Dan Bunyan, Director at PwC Strategy, added:
Source: Price Waterhouse Coopers