Digital growth to drive UK entertainment and media market to £66.6bn by 2019
James R | On 08, Jun 2015
The growth of digital video, music and other meda is expected to drive the UK entertainment market to a total worth of over £60 billion by 2019.
A new report from PwC forecasts the UK entertainment and media market will growth by 3.2 per cent compound annually from 2014-2019 to a value of £66.6bn in 2019. In 2014, the UK had the second largest E&M market across Europe, the Middle East and Africa at £56.9bn, behind Germany, and will maintain this position until 2019.
Revenues from digital are predicted to reach a 50/50 share with non-digital in 2020, with the biggest revenue generators in digital being internet access and internet advertising, and the fastest growing digital sectors being TV advertising, out-of-home advertising and book publishing.
“[Increasingly] it’s clear that consumers see no significant divide between digital and traditional media – what they want is more flexibility, freedom and convenience in when, where and how they interact with their preferred content,” says Phil Stokes, UK entertainment and media leader at PwC.
“Having a digital strategy is not as compelling as having an overall strategy that’s fit for a digital age – one that marries together online and offline experiences for consumers.”
VOD usage is increasing constantly, thanks to the flexbility and affordability of streaming. Indeed, last year, cinema box office revenue fell to £1.16bn from £1.22bn in 2013, due to a drop in attendances of 8 million people.
That drop, though, was also fuelled by the lack of “real blockbusters”, notes PwC, as well as the distraction of the World Cup in the summer months.
2015, on the other hand, is expected to be a strong year, thanks to big hitters such as Avengers: Age of Ultron, Jurassic World and, later this year, Spectre and Star Wars. Box office revenues are predicted to grow 7 per cen to £1.24bn, although this will be helped by average cinema ticket prices climbing from £6.50 in 2014 to a projected £7.02 in 2019.
Following a drop in total music revenues in 2014, music revenue is forecast to grow again with revenues expected to reach £2.69bn in 2019, thanks to growth in digital streaming.
Last year, digital music streaming revenue was £124m, up 65 per cent on 2013. Streaming accounted for 22 per cent of UK digital recorded music revenue in 2014, but this is expected to rise to 49 per cent by 2019.
In the publishing industry, consumer e-books are expected to overtake print and audio copies by 2018, as readers find e-books for £2 to £3 more attractive than £6 to £10 for major bestsellers.
Stokes adds: “Part of the popularity of e-books is their price and convenience. However, with more reading taking place on devices, publishers will increasingly have to compete with video, music and game content for attention.”
Streaming on the move is part of the overall shift from traditional to digital media. Indeed, mobile internet access is set to overtake fixed broadband in 2017, increasing by an annual growth rate of 7.1 per cent to reach £7bn by 2019, the highest in Western Europe.
“The entertainment and media industry is at the forefront of the digital revolution,” adds Stokes. “It’s time to embrace the fact that mastering the user experience is critical to success in this industry. In a world that’s in beta, today’s entertainment and media companies need to do three things to succeed: Innovate around the product and the user experience, develop seamless consumer relationships across distribution channels and put mobile (and increasingly video) at the centre of their consumer offerings.”