UK media industry could be worth £88 billion by 2025
The world’s entertainment and media sector revenue is due to grow to more than $2.5 trillion by 2025. The UK is set to become one of the world’s largest national markets meanwhile, with CAGR of 5% over the next four years.
A new study from Big Four professional services firm PwC has found the world’s entertainment and media (E&M) sector is set to bounce back quickly from the challenges of the pandemic. In 2020, revenue fell at a year-on-year rate of -3.8%. This $81 billion recession was more than the equivalent value of 2020’s entire music, radio and podcasts segment.
According to PwC, though, as more global regions emerge from lockdown and see increasing rates of vaccination, a forecast year-on-year rise of 6.5% in 2021 and a further 6.7% rise in 2022 will help see that lost value quickly regained. At the same time, it will help drive total global E&M revenue to increase at a 5.0% five-year CAGR. By 2025, then, E&M revenue will sit at an estimated $2.5 trillion worldwide.
The UK’s market looks set to be a particularly large beneficiary of this uptick. While revenue fell 5% in 2020 due to the coronavirus outbreak, Britain’s E&M sector is expected to grow by 9% in 2021 alone. Continuing this to see a CAGR of 5% until 2025, the UK is estimated to overtake Germany as the largest E&M market in Western Europe by 2025. At that point, the UK’s E&M sector would likely be worth £88 billion ($121.86 billion), with only the US, China and Japan worth more globally.
Of course, PwC’s forecasts come with a warning that making predictions against an uncertain backdrop can be difficult. The UK recovery could yet be impacted by further lockdowns, and this could impact the ability of previously disrupted sectors to see a strong growth trajectory in 2021 and 2022. Cinema, B2B Events, and live music may still have to wait before they can be sure of a return to normality. Even then, though, the UK’s position as a frontrunner in digitalisation means its E&M market is likely to outstrip its nearest competitors.
Mark Maitland, UK Head of Entertainment and Media at PwC, said, “UK consumers’ rapid migration to digital behaviours in the pandemic has now become embedded in their day-to-day lives, helping to sustain overall growth across E&M for the coming five years. As companies race to meet consumers’ evolving needs with new products, services, and experiences, the E&M industry will become more pervasive, more immersive and more diverse.”
This 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. 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, “The UK E&M sector is also experiencing a number of its own distinctive trends. In 2020, the pandemic accelerated changes in consumer behaviour that have brought forward digital disruption tipping points by several years. These shifts are playing out almost everywhere in the entertainment and media sector. Whether it’s box office revenues shifting to streaming platforms… or brands looking to find potential customers across new entertainment platforms and games, there is one common driver: changes in customer behaviour, propelled by habits gained in the pandemic, in many cases, look set to continue well beyond it.”
