The UK’s entertainment and media industry is forecast to return to growth and be the biggest market in Western Europe by 2025, according to PricewaterhouseCoopers’ Global Entertainment and Media Outlook 2021-2025.
In the latest edition it is forecast that UK live music revenue will grow at a compound annual growth rate of 17% over the next four years. This year, PwC forecasts live music revenue will grow to £846m after falling to £225m last year. By 2025, live music revenue is forecast to be worth £1.56 billion, almost as much as the £1.58bn it was worth pre-Covid in 2019.
The report states that UK compound annual growth will outpace growth globally over the forecast period, driven by total UK consumer spending on entertainment and media growing by 5% per annum over the next five years.
Following the pandemic restrictions, PwC’s data suggests that the UK’s entertainment and media industry is forecast to return to growth this year and continue to grow over the next four years driven by sectors liberated from Covid restrictions. By 2025, the UK is set to overtake Germany as the biggest entertainment and media (E&M) market in Western Europe by revenue.
After the Covid pandemic caused total UK E&M revenue to fall 5% in 2020, PwC forecasts growth will rebound 9% this year and over the forecast period at a compound annual growth rate of 5% outpacing the expected growth in E&M revenues at a global level. By 2025, the UK’s E&M sector is expected to be worth £88bn with only the US, China and Japan worth more globally.
“Sectors such as live music have struggled to go virtual… So there’s pent-up demand in those sectors ready to be released as lockdown ends.”
Mark Maitland, UK head of Entertainment and Media at PwC, says, “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 E&M for the coming five years. 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.
“Some sectors have found interesting ways to navigate the effects of the pandemic – notable examples include B2B events moving to online/virtual and now increasingly hybrid formats. However, sectors such as live music have struggled to go virtual, as it’s so difficult to replicate the in-person experience online. So there’s pent-up demand in those sectors ready to be released as lockdown ends.”
PwC’s forecasts have been made against the background of an improving economic outlook. However, the UK recovery could yet be impacted by further lockdowns, so E&M forecasts may continue to evolve, it warns, noting that total cinema revenue isn’t forecast to return to pre-pandemic levels, and B2B events will not return to previous levels for a number of years.
The UK’s position as an early and heavy adopter of digital solutions has accentuated some key trends such as consumer spend on video streaming, which will grow by an estimated 14% in 2021, outpacing global growth.
Dan Bunyan, director at PwC Strategy, adds: “The UK reflects a number of the macro and global revenue shifts taking place. However the UK E&M sector is also experiencing a number of its own distinctive trends. In 2020, the pandemic accelerated changes in consumer behaviour that have brought forward digital disruption tipping points by several years.
“These shifts are playing out almost everywhere in the entertainment and media sector. Whether it’s box office revenues shifting to streaming platforms, rising eCommerce helping to boost digital advertising, creators of user-generated content tapping into new audiences or brands looking to find potential customers across new entertainment platforms and games, there is one common driver: changes in customer behaviour, propelled by habits gained in the pandemic, in many cases, look set to continue well beyond it.”
PwC’s 22nd annual edition of the Global Entertainment & Media Outlook includes forecast data and commentary for 14 defined industry segments in 53 territories. Find out more at www.pwc.com/outlook.