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The future of entertainment: U.K.’s media market poised for growth
Streaming services and cinema: The driving forces
The U.K. entertainment and media (E&M) market is on the brink of a significant transformation. By 2025, it is expected to surpass Germany, becoming Europe’s largest market. This growth is driven by the dynamic sectors of streaming services and cinema, which are set to play pivotal roles in this expansion.
Projected growth and revenue
According to recent projections, the U.K. E&M revenue is anticipated to exceed £100 billion ($128 billion) this year and reach £121 billion ($155 billion) by 2028. This growth, at a compound annual rate of 4%, underscores the robust nature of the market.
Streaming services: Navigating a maturing landscape
The U.K.’s streaming market, already the largest in Western Europe and third globally, is evolving. While subscriptions are expected to rise from £6.5 billion in 2024 to £8.3 billion in 2028, the growth rate is slowing. In response, streaming platforms are exploring new revenue streams.
Ben Bird, a leader in the entertainment and media sector, highlights that operators are leveraging their content rights and original productions to boost subscriptions. This strategy often leaves consumers needing to subscribe to multiple services or rotate platforms to access their desired content. Ad-supported plans are also driving growth, offering consumers the chance to subscribe for slightly less.
The impact of competition and market maturity
Despite intense competition and market maturity, the streaming sector has shown remarkable growth, nearly doubling in size since 2020. This expansion was partly fueled by the pandemic, which increased demand for home entertainment. Even with price increases by major platforms and challenging economic conditions, the streaming market has maintained its robust growth trajectory.
By 2028, advertising is projected to account for 30% of U.K. streaming revenues, up from 24% in 2024. This shift is driven by the introduction of ad-based variants and other monetization strategies.
Cinema: A robust recovery
The cinema sector is also showing a strong recovery. Total revenue is forecast to grow at a 6% compound annual rate over the next four years, with cinema admission volumes expected to increase at a 5% annual rate. Blockbuster releases like Barbie and Oppenheimer in 2023 have bolstered the industry, and major releases slated for 2025 promise further growth. Box office spend is projected to surpass pre-COVID levels in 2027, reaching £1.3 billion by 2028.
Internet advertising: A key growth driver
Internet advertising continues to be a significant growth driver, expected to increase from £32 billion in 2024 to £44 billion by 2028. Paid search, particularly in the retail sector, is set to account for over half of total internet advertising revenue by 2028.
Gaming: Europe’s largest market
The U.K. gaming market is forecast to retain its position as Europe’s largest, with total video games and esports revenue projected to grow from £7.4 billion in 2024 to £8.4 billion in 2028. Social and casual gaming is expected to generate more than half of the U.K.’s total video games revenue by 2028.
Live music: A thriving sector
Live music ticket sales are anticipated to grow from £1.75 billion in 2024 to £1.9 billion by 2028, driven by large 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.
Embracing technological disruption
Mary Shelton Rose, a leader in the U.K. technology, media, and telecoms sector, emphasizes that the U.K. entertainment and media industry has always been at the forefront of technological disruption. To capitalize on the many growth opportunities, the industry must leverage the power of new and emerging technologies such as GenAI, reshape its business and creative models, and better utilize technology for advertising.
Personal reflections for enthusiasts
For cinema and TV series enthusiasts, the evolving landscape offers a plethora of opportunities to explore diverse content. The rise of ad-supported streaming plans means more affordable options for accessing a wide range of shows and movies. For instance, upcoming releases like Barbie and Oppenheimer are set to captivate audiences, promising a rich cinematic experience.
Music lovers can look forward to an exciting future with the growth of live music events. The anticipated increase in ticket sales for large events and world tours means more opportunities to experience live performances. Albums and songs available on platforms like Spotify provide easy access to a vast library of music, catering to diverse tastes.
In the gaming sector, the continued growth of social and casual gaming highlights the increasing popularity of accessible and engaging games. This trend is set to shape the future of gaming, offering more interactive and immersive experiences for players.
Final thoughts
The U.K.’s entertainment and media market is on a promising trajectory, driven by the dynamic sectors of streaming services, cinema, internet advertising, gaming, and live music. As the industry continues to evolve, embracing technological advancements and exploring new revenue streams will be crucial for sustained growth. For enthusiasts, this means a wealth of opportunities to enjoy diverse and innovative content across various platforms.
