The UK’s entertainment and media (E&M) sector will achieve a compound annual growth rate (CAGR) of 3.1% between 2012 and 2016 to reach a total of GB£ 63bn (US$ 98bn), according to major a new report from PricewaterhouseCoopers (PwC).
This total is made up of consumer spending, advertising and subscriptions to Internet access, according to Phil Stokes, EMEA leader for Entertainment & Media at the London-headquartered professional services provider.
The television industry is believed to be in rude health, with PwC stating that despite evolving to become “video content delivered over multiple platforms”, it will remain a very important part of the market mix, and the medium by which consumers receive a large part of their entertainment and information.
The UK’s GB£ 12bn TV industry is expected to grow 3% over the forecast period, while key changes will take place, including a 17% growth in online and mobile advertising within this segment.
TV subscriptions are expected to rise at around 5% per annum over the period, while the emerging trend for consumers to look for connected experiences in their living rooms will provide new opportunities for advertisers, particularly around data mining.
However, the challenge both for advertisers and for platform operators will remain using and harnessing customer usage data more effectively, according to PwC.
“They’ve talked about it, we hear about it, but if you look under the bonnet, the picture is not quite as sophisticated and as advanced as we may see – but there are opportunities,” states David Lancefield, parter at PricewaterhouseCoopers.
As a whole, the UK advertising industry is set to grow at 4.7% CAGR to 2016, with digital advertising to grow 11.9% CAGR and non digital advertising to decline at 0.3% CAGR to 2016.
Internet advertising is expected to grow 12% annually over the forecast period to reach GB£ 8.75bn, and maintain the UK’s leading position as the EMEA region’s largest Internet advertising market, while Internet access is predicted to grow by 6.4% annually (CAGR).
Video game advertising is named as the second-fastest growing sector at 10.1% CAGR over the forecast period. Sectors in decline meanwhile include newspaper advertising and directory advertising.
PwC affirms that the UK’s E&A industry is “at the end of the digital beginning”, and that leaders within companies will have to decide quickly where in the digital value chain they want to position themselves.
Digital trade magazine publishing is expected to have the largest growth over the period at 101% CAGR, while digital publishing as a whole is set to increase from GB£ 300mn in 2011 to GB£ 1.4bn in 2016.
Printed newspapers are declining the fastest at -3.6% CAGR, while printed trade magazine are named as the most resilient print product over the next three years, but still in decline. Print publishing as a whole is expected to decrease from GB£ 9.6bn in 2011 to GB£ 8.4bn in 2016.