The UK’s entertainment and media industry is forecast to become the largest in western Europe by 2025 following a rapid rebound in the aftermath of the pandemic.
The sector has suffered a major setback due to Covid, with total revenue falling five per cent in 2020 due to the impact of lockdowns on cinema, live music, events and advertising.
But growth is expected to rebound nine per cent this year followed by a compound annual growth rate of five per cent over the next four years — ahead of the global average, according to a new report by PwC.
By 2025 the UK will overtake Germany as western Europe’s largest entertainment and media market by revenue.
With a forecast value of £88bn, it will be the world’s fourth largest market behind only the US, China and Japan.
The predictions highlight the strong recovery for the entertainment sector following a year of heavy disruption for many businesses.
But with shifts in consumer behaviour and an increased adoption of digital platforms, PwC warned there would be a long-lasting impact in some sectors.
According to the report, total UK cinema revenue is not expected to return to pre-pandemic levels, while recovery in the business-to-business events sector is set to take a number of years.
By contrast, spend on over-the-top streaming services is expected to grow 14 per cent this year, ahead of global growth, and rising to a compound annual growth rate of eight per cent in the next four years.
Online advertising, which has benefited from the pandemic, is set to continue its rapid rate of growth.
“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 entertainment and media for the coming five years,” said Mark Maitland, UK head of entertainment and media at PwC.
“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”