The UK's entertainment and media sector is forecast to grow to £76bn by 2022, with virtual reality and video games leading the way

 
Emily Nicolle
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Epic Games's bestselling Fortnite has fuelled e-sports' popularity, with the game generating over $300m in revenue per month
Epic Games's bestselling Fortnite has fuelled e-sports' popularity, with the game generating over $300m in revenue per month (Source: Getty)

The UK’s entertainment and media sector is predicted to grow by £8bn over the next four years, making the UK the second largest market in Europe, the Middle East and Africa (EMEA).

The growth will take the sector to a total of £76bn, according to PwC’s latest global outlook report.

Stand out sectors include virtual reality (VR), which is the UK’s fastest growing E&M sector at 34 per cent annually, and e-sports. The UK is now the largest video games market in Europe, with more than 7.8m VR headsets forecast to be cumulatively sold in the UK by 2022. Both VR and e-sports revenues are set to bump up to £1.2bn and £48m respectively.

Digital game purchases, meaning games bought from a console App Store rather than in physical retail, is forecast to reach £721m within the next four years and overtake physical game spend for the first time.

UK consumers are set to remain the biggest spenders in Europe on over-the-top video, using streaming services like Netflix and Amazon Prime to the tune of £1.9bn by 2022.

Read more: World tech share prices are at an all-time high, Europe rises by 2 per cent

PwC’s UK head of enterntainment and media Mark Maitland commented:

We see the UK’s entertainment and media sectors making a strong contribution to economic growth over the next four years.

The main drivers of growth will be the technology and digital companies, which are redefining the competitive playing field to the point where the borders that once separated media, technology and telecoms are dissolving to create a third revolution of convergence.

Meanwhile the UK’s biggest revenue generators in E&M will be consumer spending on internet access, set to rise from £13.7bn this year to £17bn by 2022, and advertising spend which will account for a quarter of the sector’s total revenue at around £19bn. This includes internet advertising, both digital and physical out-of-home advertising like billboard displays, and for the first time, podcast advertising, which is forecast to grow by 38 per cent annually.

Read more: High smartphone use fuels record digital advertising spend

Maitland continued: “To stay ahead of the curve, entertainment and media companies must revisit how they envision their business generates revenues and how they build and retain trust. Given the pace and scale of change underway, speed is key.

“Consumers are rejecting the one-size fits all content experiences they were once fed. As a result, it’s vital for companies to use digital delivery, data analytics and AI to personalise and tailor their offerings to provide a unique experience.”

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