27 SEP 2022

UK’s Entertainment & Media sector expects a robust long-term growth

Despite the economic problems the territory faces, the UK Entertainment & Media sector expects a robust long-term growth over the next four years, with the market expected to be valued at £97 billion by 2026, according to PwC.

Share

Despite the economic problems the territory faces, the UK Entertainment & Media sector expects a robust long-term growth over the next four years, with the market expected to be valued at £97 billion by 2026, according to PwC’s “UK Entertainment & Media Outlook 2022-2026” report.

According to the study, the shift in consumer behavior helped secure staggering year-on-year growth of 41% for UK internet advertising revenue - reaching £23 billion in 2021, and growing a further 12% to 2022. Over the next four years (2022-2026), PwC expects internet advertising revenue to expand at an impressive 6% CAGR, reaching £33 billion in 2026. Most of that revenue will come from mobile advertising, with video advertising alone set to reach almost £9 billion in 2026.

The report also notes that changing patterns of consumer behavior means digital channels and platforms will cement their position as key drivers of growth for the Entertainment & Media market across advertising, content, video and commerce. However, subscription spending is set to drop: 22% of consumers plan to spend less over the next 12 months on digital TV and streaming subscriptions. Elsewhere, 20% consumers plan to spend less on their satellite TV subscription and mobile phone contract, with 34% planning to spend less on going to the cinema. Overall, 78% of consumers have already made some form of spending cutback in response to the cost-of-living crisis.

For businesses in the sector, rising inflation is set to impact both content providers and advertising businesses. The possibility of consumers switching down subscriptions, coupled with rising production costs, is expected to impact content businesses. If inflation leads to reduced consumer demand then this may have a knock-in impact on marketing effectiveness in the short-term. Depending on how brands react, this may soften advertising prices in some channels, PwC says.

“The question of how soaring inflation will knock through to Entertainment & Media is prompting the industry to rethink and reset its expectations. But companies are not taking cover - and they are right to trust their judgement, and push ahead with their digital strategies,”  commented Dan Bunyan, strategy partner.

Related News