The entertainment and media sector in the United Kingdom is expected to grow by £8 billion over the next four years. That is the forecast from PwC in its latest Global Entertainment & Media Outlook. Globally, the revenues from television subscriptions will continue to overshadow those from online video as they both rise.
The value of the media and entertainment sector in the United Kingdom will rise from £68 billion in 2018 to £76bn a year by 2022. Annual spending on online video services like Amazon and Netflix is predicted to reach £1.9 billion by 2022, the highest in Europe.
“The UK’s entertainment and media sector is forecast to grow at a healthy rate over the next four years with some of the largest and fastest growing markets in digital and technology, reflecting its location as a place for innovation,” commented Mark Maitland, the head of entertainment and media for PwC in the United Kingdom.
“We see the UK’s entertainment and media sectors making a strong contribution to economic growth over the next four years,” he added. “The main drivers of growth will be the technology and digital companies, which are redefining the competitive playing field to the point where the borders that once separated media, technology and telecoms are dissolving to create a third revolution of convergence.”
Consumer spending on internet access will bring in the most revenue over the forecast period rising from £13.7 billion in 2018 to £17 billion by 2022, a compound annual growth rate of 6%. In 2017, for the first time, consumers spent more on mobile internet access than fixed broadband access. PwC now expects smartphone ownership in the UK to hit more than 70 million and, as a result, mobile internet access is forecast to account for more than half of overall internet access revenue in four years time.
Advertising revenue will account for a quarter of total media and entertainment revenue by 2022, with digital spend continuing to dominate growth. Internet advertising spend will grow from £12 billion in 2018 to £15 billion by 2022, a 6.8% compound annual growth rate. Mobile is forecast to become the dominant segment this year, accounting for half of all internet advertising.
Digital music streaming revenue will almost double from £779 million forecast for 2018 to £1.4 billion by 2022. In 2021, spend on streaming will overtake spend on tickets for live music events.
Total video games revenue of £5.5 billion is set to overtake the total £4.9 billion spend on books in 2020.
Globally, the media and entertainment market is valued at just over $2 trillion in 2018, or just under $1.5 trillion excluding spending on internet access. Global media and entertainment revenue is forecast to increase at a compound annual growth rate of 4.4% to reach $2.4 trillion in 2022.
Interestingly, subscription revenue from television will continue to rise, from $212 billion in 2017 to $226 billion in 2022. Meanwhile revenue from online video will increase from $36 billion to $54 billion. That is a significant increase but is still overshadowed by revenues from pay television.
The growth in online video revenue comes partly at the expense of physical home video, which it passed in 2015 and is forecast to fall from $20 billion in 2017 to $12 billion in 2022.
Over the same period, public licence fee revenue is forecast to remain relatively flat, rising from $31 to $32 billion.
The television advertising market is forecast to grow from $168 billion in 2017 to $192 billion in 2022. Online television advertising is forecast to account for $11 billion of that.