Tuesday, June 25, 2024

UK set to become Europe’s biggest entertainment market – The Media Leader

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The UK is forecast to become the largest entertainment and media market in Europe over the next four years and become even more dependent on advertising.

Global consultancy PwC estimates that entertainment and media revenue will reach £83bn in the UK this year and will grow by 4% per year until 2026, when it will overtake Germany as the largest market.

Within this, internet adspend is forecast to make up over a third of total entertainment and media revenue in 2026 after growing by 6% each year, while a fifth of spend will be attributed to home and mobile internet.

The UK has a relatively high level of high speed internet access, while mobile internet access is forecast to overtake fixed broadband access next year, according to PwC’s Global Entertainment & Media (E&M) Outlook 2022-2026.

Mary Shelton Rose, partner and UK technology, media and telecoms Leader at PwC, said: “The UK entertainment and media market is forecast to emerge from the past few years of uncertainty to greater clarity about the underlying forces driving sustainable growth.”

“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.”

VR growth will remain ‘steady’ despite metaverse hype

Meanwhile, the UK will continue to be the leading market for over-the-top (OTT) video in Western Europe and the third largest market globally after the US and China. Overall UK OTT video revenue is forecast to reach £3.6bn this year before growing at 6% per year until 2026.

Dan Bunyan, partner at PwC Strategy&, said OTT video growth will fall back to a more “modest” rate after a surge during the Covid-19 pandemic.

“[We] expect some price increases in services to drive revenue in the forecast period since the pool of potential new subscribers gradually reduces,” Bunyan explained. “More OTT video providers venturing into live sport will also present new opportunities and options for consumers.”

However, virtual reality content will remain a small segment and continue to only make “steady progress” in terms of adoption levels, despite a recent boost in enthusiasm for the metaverse. Meta, the world’s biggest social media company and second-biggest advertising seller, changed its name from Facebook last year to reflect a major repositioning as a “metaverse” company.

“Virtual reality content is inherently tied to the VR headsets sold, and the market has faced the ‘chicken-and-egg’ problem in recent years,” Bunyan explained. “But the recent improvements to VR headset technology, lower-priced headsets and the release of games from high-profile developers will encourage more consumers to invest in VR over the forecast period and could see the metaverse experience expand.”

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