Streaming services and film will play a pivotal role in the UK entertainment and media (E&M) market, which is expected to overtake Germany to become Europe’s largest by 2025, according to PwC’s latest Global Entertainment & Media Outlook 2024-2028.
The report predicts that UK E&M industry revenue will exceed £100 billion ($128 billion) this year and reach £121 billion ($155 billion) by 2028, growing at a compound annual growth rate of 4%.
The UK streaming market, the largest in Western Europe and the third largest in the world, is on the path to maturity: Subscriptions are expected to grow from £6.5 billion in 2024 to £8.3 billion in 2028, but the rate of growth is slowing. In response, streaming platforms are seeking new revenue streams.
“Operators are using content rights and originals to drive adoption, forcing consumers to subscribe to multiple services or switch platforms to access the content they want,” said Ben Bird, entertainment and media leader at PwC UK. He added that ad-supported plans are driving growth, “offering the opportunity to subscribe for a slightly cheaper price in some cases.”
Bird highlighted the strong performance of the streaming market, noting that it is expanding rapidly despite intense competition and market maturity. He noted that the sector has seen impressive growth, nearly doubling in size since 2020, in part due to the boost it has received during the pandemic. Bird added that the streaming market has maintained a strong growth trajectory despite price hikes by major platforms and tough economic times.
Advertising is predicted to account for 30% of UK streaming revenue by 2028, up from 24% in 2024, as services introduce ad-based variants and explore other monetization strategies.
The film sector is seeing a strong recovery, with total revenues expected to grow at 6% annually over the next four years. Cinema attendance is expected to grow at 5% annually. The industry will gain momentum with the release of blockbuster films such as Barbie and Oppenheimer in 2023, with further growth expected in 2025 with major releases planned. Box office revenues are forecast to exceed pre-COVID levels in 2027 and reach £1.3 billion by 2028.
Internet advertising will remain the main growth driver, forecast to grow from £32 billion in 2024 to £44 billion by 2028. Paid search, particularly in retail, is expected to account for more than half of all internet advertising revenue by 2028.
The UK games market is expected to maintain its position as the largest in Europe, with total video games and esports revenue expected to increase from £7.4 billion in 2024 to £8.4 billion in 2028. Social and casual games are expected to generate more than half of total UK video games revenue by 2028.
Live music ticket sales are expected to increase from £1.75 billion in 2024 to £1.9 billion by 2028, driven by large scale events such as music festivals and world tours. By 2028, live music is expected to account for 31% of total music, radio and podcast revenue.
Mary Shelton-Rose, partner and UK technology, media and communications leader at PwC, said: “The UK entertainment and media industry has always been at the forefront of technological disruption. To capitalise on the many growth opportunities, it will need to harness the power of new technologies such as GenAI, reshape its business and creative models and make better use of technology in advertising.”