Spending on subscription video-on-demand services by British audiences will overtake TV subscriptions in 2025, suggests PwC.
In the Global Entertainment & Media (E&M) Outlook 2023-2027, the analysts suggest the UK will maintain its position as the leading entertainment and media market in Europe over the next four years. UK E&M revenue is expected to reach £85 billion this year with growth forecast at a compound annual growth rate of 4 per cent over the next four years to generate revenue of £100 billion overall by 2027, said PwC.
The report also found that:
Virtual and augmented reality is forecast to grow at a rate of at least 10 per cent p.a. with further growth dependent on the success of new products and applications
Cinema box office revenue is forecast to surpass pre-pandemic levels in 2025
Subscription video on demand (SVoD) revenue is forecast to grow from £3.6 billion this year to £4.7 billion by 2027, added the report. In 2025 it forecasts that SVoD (£4.2 billion) will overtake TV subscriptions (£4.1 billion) in terms of revenue reflecting a shift in audiences from linear to streaming.
Meanwhile, the report suggests the virtual reality market in the UK will see steady growth in the next four years, driven by the rising popularity of VR gaming and immersive video experiences. Total UK VR revenue is set to increase from £1.3 billion in 2023 to £2 billion in 2027, said PwC.
Between 2022 and 2027 the UK’s installed base of VR headsets is forecast to grow from 1.7 million to 4.2 million units, largely thanks to the success of the Meta Quest 2, which will represent over 80 per cent of the total installed base in 2027, said the report. Apple’s newly released headset may also act as another stimulus for the market, but it is too early to see the results, said PwC.
Speaking about the findings, Mary Shelton Rose, partner and UK Technology, Media and Telecoms leader at PwC, said: “2022 was a challenging year for the UK entertainment and media industry as the economy struggled to return to normality. In the midst of continued change and disruption, the industry reassessed its strategies and refocused on core operations.”
“For years, the overarching story in E&M has been a technology-inspired shift to digital and mobile. But this year, very quickly, a new force is coming into focus: Generative AI. Going forward, leaders must evaluate and embrace the potential power of AI holistically as an enabler for productivity and creativity.”