The UK entertainment and media industry is expected to grow by £ 8 billion over the next four years. This is the forecast of PwC in its latest Global Entertainment and Media Outlook. Globally, TV subscription revenues will continue to eclipse online video revenues as they both increase.
The value of the UK media and entertainment sector will grow from £ 68bn in 2018 to £ 76bn per year by 2022. Annual spending on online video services like Amazon and Netflix is expected to reach 1 , £ 9 billion by 2022, the highest in Europe.
“The UK entertainment and media industry is expected to grow at a sustained rate over the next four years, with some of the largest and most dynamic digital and technology markets reflecting its location as a place of innovation,” said commented Mark Maitland, Entertainment and Media Director for PwC UK.
“We see the UK entertainment and media sectors making a strong contribution to economic growth over the next four years,” he added. “The main engines of growth will be technology and digital companies, which are redefining the rules of the competitive game to the point where the boundaries that once separated media, technology and telecommunications are dissolving to create a third convergence revolution. “
Consumer spending on internet access will generate the most revenue over the forecast period, growing from £ 13.7bn in 2018 to £ 17bn by 2022, a growth rate annual compound of 6%. In 2017, for the first time, consumers spent more on mobile internet access than on fixed broadband access. PwC now expects UK smartphone ownership to reach over 70 million, and as a result, mobile internet access is expected to account for more than half of overall internet access revenue in four years.
Advertising revenue will account for a quarter of total media and entertainment revenue by 2022, with digital spending continuing to dominate growth. Internet advertising spending will grow from £ 12bn in 2018 to £ 15bn by 2022, a compound annual growth rate of 6.8%. Mobile is expected to become the dominant segment this year, accounting for half of all internet advertising.
Digital music streaming revenue will almost double from £ 779million forecast for 2018 to £ 1.4 billion by 2022. In 2021, streaming spending will exceed spending on tickets to music events live.
Total video game revenue of £ 5.5bn is expected to exceed £ 4.9bn spent on pounds in 2020.
Globally, the media and entertainment market is valued at just over $ 2 trillion in 2018, or just under $ 1.5 trillion excluding Internet access spending. Global media and entertainment revenues are expected to grow at a compound annual growth rate of 4.4% to reach $ 2.4 trillion in 2022.
Interestingly, TV subscription revenues will continue to grow from $ 212 billion in 2017 to $ 226 billion in 2022. Meanwhile, online video revenues will grow from $ 36 billion. from $ 54 billion to $ 54 billion. This is a significant increase, but still overshadowed by pay TV revenues.
Part of the growth in online video revenue comes at the expense of physical home video, which it overtook in 2015 and is expected to grow from $ 20 billion in 2017 to $ 12 billion in 2022.
Over the same period, public royalty revenues are expected to remain relatively stable, rising from $ 31 billion to $ 32 billion.
The television advertising market is expected to grow from $ 168 billion in 2017 to $ 192 billion in 2022. Online television advertising is expected to represent $ 11 billion.