The $108bn UK media market will continue to lead Europe: PwC report – Variety

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this U.K. Predicted to remain Europe’s leading entertainment and media market over the next four years ahead of Germany and France PricewaterhouseCoopersGlobal Entertainment and Media (E&M) Outlook Report 2023-2027.

UK electromechanical revenue is expected to reach £85 billion ($108 billion) this year, with a compound annual growth rate (CAGR) of 4% expected over the next four years, to reach £100 billion overall by 2027. The report forecasts Europe’s second largest electromechanical market – Germany expected to reach £83.1 billion in 2023 and France £54.6 billion in 2023 – to grow to £90.8 billion and £61.1 billion respectively by 2027.

In the UK, SVOD revenue is expected to grow from £3.6 billion in 2023 to £4.7 billion in 2027. SVOD (£4.2bn) will surpass TV subscriptions (£4.1bn) by 2025. The report notes that the rise of AVOD offers consumers an opportunity to ditch the subscription model.

Film will continue its post-pandemic recovery growth at a CAGR of 7% over the next four years, with box office revenue expected to surpass pre-pandemic levels to reach £1.3bn by 2025.

Internet access is expected to generate £16.7 billion in revenue this year, rising to £20 billion by 2027. The UK market will be driven by mobile internet access, reaching an inflection point by 2023 when mobile internet will replace fixed broadband as the largest contributor to total internet access revenue, the report said. By 2027, mobile Internet access revenue will account for 55% of total Internet access revenue.

Growth in data services will more than double as annual data consumption increases from 158,000 PB in 2022 to 415,000 PB in 2027. This is related to increased consumption of streaming services, social video platforms and broadcast VOD services, which will collectively account for 36%. All data consumption in 2027.

Overall advertising revenue in the UK is expected to reach £35.7 billion by 2023, with digital advertising dominating. Internet advertising revenue is expected to reach £27.5 billion in 2023 and £35.5 billion by 2027, a CAGR of 6%. TV advertising is expected to decline by 3% in 2023 due to tighter budgets, but will then return to growth of 4% in 2024 to £4.8bn.

UK virtual reality market revenue is expected to grow from £1.3 billion in 2023 to £2 billion in 2027, at a CAGR of 10%. From 2022 to 2027, VR in video games will grow at an annual rate of 22%, supported by new game releases. Between 2022 and 2027, UK VR headset installations are expected to grow from 1.7 million to 4.2 million units. Thanks to the success of Meta Quest 2, the largest and fastest growing headset category is now standalone VR, which will account for more than 80% of total installations by 2027. Apple’s new headset could also be another stimulus for the market. report said.

The report also offered a caveat that the growth rate was expected to fluctuate from year to year given changing economic conditions and weakened by subdued consumer spending.

Mary Shelton Rose, Partner and UK Technology, Media and Telecoms Leader, PwC, and Dan Bunyan, Partner, PwC Strategy& will both Generative AI is seen as a new force to be reckoned with in content creation and advertising.