The United Kingdom will overtake Germany as the largest entertainment and media entertainment market in Europe in 2023. PwC forecasts that entertainment and media revenue for the United Kingdom will reach £83 billion in 2022 and grow to £97 billion by 2026. By then, internet advertising is expected to make up a third of total revenue in the sector.
Mary Shelton Rose, who heads technology, media and telecoms for the United Kingdom at PwC, said the entertainment and media market will emerge from the past few years of uncertainty to greater clarity about the underlying forces driving sustainable growth. She said: “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.”
Internet advertising revenue is forecast to grow to £26 billion in 2022 and by 6% a year to 2026, making up over a third of overall entertainment and media revenue. This will also be led by mobile, with mobile internet advertising accounting for two thirds of internet advertising revenue by 2026.
The United Kingdom will continue to be the leading market for online video in Western Europe and the third largest market globally after the US and China. Online video revenue in the United Kingdom is forecast to reach £3.6bn in 2022 before growing at 6% a year over the next five years.
Dan Bunyan, a partner on the editorial board of the annual PwC Global Entertainment & Media Outlook, said: “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.”
Spending on entertainment and media is highest in North America at $2,229 per person, nearly double that of Western Europe, where it is $1,158. The Asia Pacific region, which had the highest overall revenue in 2021 at $884.7 billion, has a per capita spend of just $224.
The global entertainment and media sector is expected to be worth $2.51 trillion in 2022, rising to $2.93 trillion in 2026.
Global online video revenues rose to $79.1 billion in 2021 and are forecast to rise at 7.6% a year through to 2026, rising to $114.1 billion.
Traditional television still generates considerable revenue, but these are forecast to decline by 0.8% a year from $231 billion in 2021 to $222.1 billion in 2026, although that is still almost twice that of online video.
The 23rd annual Global Entertainment & Media Outlook is available to subscribers from PwC. It provides five-year forecasts for 14 entertainment and media segments across 52 territories.