PwC Report: UK Media Industry to Surpass £100 Billion by 2027

by | Jun 27, 2023

PwC’s latest Global Entertainment & Media (E&M) Outlook 2023-2027 report has projected a bright future for the UK media industry, despite pandemic challenges. The report forecasts a compound annual growth rate (CAGR) of 4% over the next four years, with revenue expected to hit £85 billion (€99.1bn) in 2023 and £100 billion by 2027. These numbers highlight the significant value the media industry adds to the UK economy, and the report predicts that the market will return to pre-pandemic levels in 2024, with revenue hitting £1.13 billion.

The report identifies several key drivers of growth for the industry, including VR, advertising-based video on demand (AVoD), out-of-home (OOH) advertising, and internet advertising. Internet advertising is expected to generate £35.5 billion in revenue by 2027, with spend moving into new channels like retail media and gaming, and a CAGR of 6%. This growth is driven by the increasing popularity of online shopping and gaming, and businesses that invest in these areas can expect to see significant returns.

The UK’s installed base of VR headsets is forecast to grow from 1.7 million to 4.2 million units between 2022 and 2027, with total UK VR revenue set to increase from £1.3 billion in 2023 to £2 billion in 2027. AVoD offers consumers the chance to switch away from subscription models, with SVoD forecasted to overtake TV subscriptions in terms of revenue in 2025. These trends present significant opportunities for media businesses that invest in these areas.

Mobile internet access revenue is expected to account for 55% of total internet access revenue by 2027, with internet access forecasted to generate significant revenue, reaching £16.7 billion this year before growing to £20 billion by 2027. The growth of data services will more than double as annual data consumption rises from 158,000 petabytes (PB) in 2022 to 415,000 PB in 2027. Generative AI is also likely to play a growing role in the UK internet advertising market, providing new opportunities for businesses that invest in this technology.

The UK out-of-home (OOH) advertising market is also being driven by a post-pandemic recovery. Box office revenues are expected to exceed pre-pandemic levels by 2025 at £1.3 billion, and cinema will continue its post-pandemic recovery growth over the next four years, forecasted at a 7% CAGR. This presents significant opportunities for media businesses to engage with audiences in new and innovative ways, and capitalise on the growth potential of this market.

The report concludes that the UK is forecast to remain the leading entertainment and media market in Europe over the next four years, with new growth opportunities emerging in areas like VR, AVoD, and data services. Despite the pandemic, consumer confidence is expected to return, and the economy is expected to recover, leading to a bright future for the UK media industry.

Businesses should be confident to be on the front foot, as the industry continues to add significant value to the UK. With the right strategies and investments, businesses can capitalize on the growth opportunities the UK media industry presents and be part of its post-pandemic recovery. The PwC report offers a positive outlook for the UK media industry, and its growth potential should be taken advantage of by media businesses in the UK.