U.K. Entertainment and Media Sector to be largest in EMEA by 2017

Published at 00:01 AM on 08 June 2016

 

 

Date

June 8th 2016
 

Contact

Stephen Young, Media Relations, PwC

Tel: 02072133645

Mobile: 07789808745

e-mail: [email protected]

   

 

EMEA

 

U.K. Entertainment and Media Sector to be largest in EMEA by 2017

Key Takeaways:

  • U.K.’s Entertainment and Media sector to overtake Germany in 2017 as largest in EMEA.
  • U.K.’s E&M Sector to be worth £68.2bn compared to Germany’s £61.3bn by 2020.
  • Global Internet advertising will become the largest advertising segment.
  • U.K. is the largest Internet advertising market in Europe, and will remain so for the next five years.
  • After a drop in total TV advertising revenue in 2012, the U.K. has returned to growth.
  • Total U.K. consumer books revenue will rise to £2.42bn in 2020, entirely driven by growth in e-books.
  • 20bn apps will be downloaded in the U.K. in 2020, accounting for 5% of the world’s app market with 88% of smartphone and tablet data usage spent watching video content.
  • By 2017, more than half of the world's population will be mobile Internet subscribers.
  • Global Smartphone connections are forecast to rise from 1.92bn in 2014 to 3.85bn in 2019.

 

The U.K.’s Entertainment and Media (E&M) sector is set to overtake Germany and become the largest in Europe, the Middle-East and Africa (EMEA) according to PwC’s latest Entertainment and Media Outlook. The research shows that the United Kingdom’s E&M sector will be worth £62.8bn in 2017, overtaking Germany’s £58.6bn. This growth will continue over the following three years, by reaching a projected £68.2bn, in comparison to Germany’s £61.3bn by 2020.

Phil Stokes, U.K. Head of Entertainment & Media, said:

“Advertising revenues are driving this growth, as the industry identifies new ways of measuring and tracking performance in a connected, mobile and digital world. Internet access combined with tablet and smart phone penetration has created a golden age for individuals interacting with media and the appetite of U.K. consumers shows no signs of slowing.

“It's increasingly clear that consumers see no significant divide between digital and traditional media: what they want is more flexibility, freedom and convenience in when and how they consume any kind of content.

“Mobile Internet connections worldwide are growing apace. They already outnumber fixed connections by three to one, and are projected to rise by over 5bn to 7bn in the next five years. This is a bigger global disruption than the Industrial Revolution.”

Internet Advertising

By 2017, more than half of the world's population will be mobile Internet subscribers. Global total Internet advertising revenue is forecast to grow from £101.1bn in 2015 to £171.3bn in 2020, a compound annual growth rate (CAGR) over the period of 11.1%. As the segment captures an ever-larger portion of advertising budgets, it will exceed TV to become the world’s largest single advertising category by 2019.

The U.K. is the largest Internet advertising market in Europe, and will remain so for the next five years, with a forecast overall CAGR of 10.5% between 2015 and 2020, and revenue growing from £8.3bn to £13.7bn in the period.

Phil Stokes, added:

 “The historic shift to mobile consumption that both traditional and new media companies are experiencing has yet to be reflected fully in advertising revenue.

“With the ways of measuring and tracking ad performance on new platforms still evolving, advertisers have been reluctant to migrate their spending from more tried and tested media. But that will shift as the market matures, and we forecast that by the end of 2017 advertising revenue from mobile devices will exceed that from online services delivered to PCs and laptops.”

TV Advertising

After a drop in total TV advertising revenue in 2012, the UK has returned to growth. This was initially modest at 1.2% in 2013, although stronger growth of 4.4% and 7.0% was evident in 2014 and 2015 respectively.

TV advertising revenue in the UK increased from £3.8bn in 2014 to £4.1bn in 2015. Growth will continue at a 4.2% CAGR through to 2020, with total TV advertising revenue reaching £5bn.

Phil Stokes, added:

“Online advertising has been winning market share from traditional broadcast advertising on the strength of its greater accountability and wealth of detailed data on user behaviour and engagement.

“Now TV is fighting back, with innovations in audience measurement based around analysing return path data, social listening, and new aggregated insights into agency spend.

“The new data also enhances pay-TV service providers’ ability to cross-sell and up-sell services to subscribers.”

Cinema

Global Smartphone connections are forecast to rise from 1.92bn in 2014 to 3.85bn in 2019. The proliferation of such connected devices among consumers will create both significant new opportunities and considerable challenges for companies creating and distributing cinema content.

Despite this, the UK cinema market is set to rise marginally over the forecast period, although this comes from a high starting base — 2015 being a very strong year for film. Admissions in 2015 were at 171.8mn, a substantial increase on the 2014 figure of 157.5mn. They are expected to reach 173.2mn in 2020, at a 0.2% CAGR.

Publishing Books and e-Books

Total consumer books revenue in the UK stood at £2bn in 2015 and will rise to £2.4bn in 2020, increasing at a 3.4% CAGR. This will be entirely driven by growth in e-books revenue, with print revenue continuing to fall, albeit at lower rates than previously anticipated.

Phil Stokes added:

“Colouring books were a major trend in the UK book industry in 2015, accounting for five of the top 20 bestselling books on Amazon, including the top-seller. The colouring book trend helped limit decline in print consumer books revenue since the format doesn't work as an e-book. This trend is expected to continue throughout 2016.”

Out-of-home advertising:

The UK is the largest out-of-home (OOH) advertising market in Europe, with total revenue of £1.2bn in 2015. This also makes the UK the fourth-largest OOH market in the world, behind only the US, Japan and China.

The UK market is expected to maintain a steady, albeit slowing, growth rate over the forecast period, reflecting the general economic climate, but also, with many of the gains from early digitisation already realised, an element of diminishing returns on digital out-of-home (DOOH) advertising growth will start to settle in. The net effect will be a modest CAGR of 2.9% over the next five years, slightly above the regional average. Total OOH revenue will reach £1.4bn by 2020.

Phil Stokes concluded:

“Put simply, today's entertainment and media industry is about consumer choice, innovation and experience, irrespective of whether delivery is digital or non-digital. Mastering these three elements is now critical to commercial success -- and to sustaining future growth.

“Melding what people watch to what people buy can unlock a treasure trove of insight for media companies across the ecosystem.”

Ends

 

Notes to Editor:

About the Global Entertainment & Media Outlook:

PwC’s Global entertainment and media outlook reveals that total worldwide entertainment and media revenues will rise at a compound annual growth rate (CAGR) of 4.5% over the coming five years, from £1.19trn in 2015 to £1.48trn in 2019.

PwC’s 17th annual edition of the Global entertainment and media outlook 2016-2020, is a comprehensive online source of global analysis for consumer and advertising spend. With like-for-like, five-year historical and five-year forecast data and commentary across 13 industry segments in 54 countries, the Outlook makes it easy to compare and contrast consumer and advertising spend across segments and countries. Find out more at www.pwc.com/outlook.

Segments covered by the Outlook:

TV and video, TV advertising, Internet advertising, Internet access, Radio, Out-of-home advertising,

Video games, Cinema, Newspaper publishing, Magazine publishing, Business-to-business, Book publishing and Music.

About Outlook data:

Much of the content in this press release is taken from data in the Global entertainment and media outlook 2016-2020. PwC continually seeks to update the online Outlook data, consequently the data in this press release may not be aligned with the data found online. The online Global entertainment and media outlook 2016-2020 is the most up-to-date source of consumer and advertising spend data.

About PwC:

At PwC, our purpose is to build trust in society and solve important problems. We’re a network of firms in 157 countries with more than 208,000 people who are committed to delivering quality in assurance, advisory and tax services. Find out more and tell us what matters to you by visiting us at www.pwc.com

PwC refers to the PwC network and/or one or more of its member firms, each of which is a separate legal entity. Please see www.pwc.com/structure for further details.

©2016 PricewaterhouseCoopers. All rights reserved.

Ends


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About PwC

At PwC, our purpose is to build trust in society and solve important problems. We’re a network of firms in 157 countries with more than 208,000 people who are committed to delivering quality in assurance, advisory and tax services. Find out more and tell us what matters to you by visiting us at www.pwc.com.

PwC refers to the PwC network and/or one or more of its member firms, each of which is a separate legal entity. Please see www.pwc.com/structure for further details. © 2016 PwC. All rights reserved

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