Published: Fri, June 08, 2018
Electronics | By Kelly Massey

United Kingdom streaming sector to be worth £1.4bn by 2022

United Kingdom streaming sector to be worth £1.4bn by 2022

United Kingdom streaming revenue will almost double between 2018 and 2022, according to a new forecast from PwC.

China's entertainment and media industries will continue to see robust growth in the next five years, according to a private report. And given the pace and scale of change under way, speed is vital.

'Consumers are rejecting the one-size fits all content experiences they were once fed. "PwC now expects smartphone ownership in the United Kingdom to hit more than 70 million and, as a result, mobile internet access is forecast to account for more than half of overall internet access revenue in four years' time". This is complemented by the fact that the mobile has become consumers' primary means of accessing content, making it an increasingly important focus for advertisers. PwC now expects smartphone ownership in the United Kingdom to hit more than 70 million and, as a result, mobile internet access is forecast to account for more than half of overall internet access revenue in four years time.

Advertising revenue is set to account for a quarter of total E&M revenue by 2022, with digital spend continuing to dominate growth. The segment is expected to grow by a 55.9% CAGR over the forecast period from Rs1,645 crore to Rs14,772 crore.

"In particular, the rise of mobile internet advertising, tracking at 11pc annually, will represent 42pc of all internet advertising spend in Ireland by 2022". The huge USA media industry, with its large, highly profitable home market, is also "at the forefront of VR experimentation, often supported by a keen VC ecosystem", it said.

VR growth is expected each year throughout the forecast period, increasing to $2.6 billion in 2018 from $1.5 billion in 2017.

According to the report, OTT video revenue has reached Rs2,019 crore in 2017.

US theatrical movie revenue, meanwhile, is expected to remain largely stable over the forecast period, "in spite of continuing turbulent market conditions", PwC said.

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"Growth will be driven by better connected homes and businesses and increased network coverage and capacity for mobile users, who are becoming more attracted to low-priced SIM only deals from operators". This can be especially challenging for entertainment and media companies, because they must demonstrate their trustworthiness across many dimensions, including content, data, monetisation, social impact and the appropriateness of advertising content. Mobile video advertising is the fastest-growing sub-segment of India's Internet advertising market, rising at a 32.8% CAGR to 2022, when revenue will total INR 2155 Cr.

United Kingdom consumers are set to remain the biggest spenders in Europe on over-the-top video, using streaming services like Netflix and Amazon Prime to the tune of £1.9bn by 2022.

PwC is bullish about VR, which it reckons will have a CAGR of 35 percent and reach £1.2bn by 2022. The UK's VR industry will generate more revenue than any other country in Western Europe over this time.

PwC reckons that "the United Kingdom will maintain its position as the largest video games market in Europe and for the first time, we forecast digital game purchases for consoles to overtake physical game purchases for consoles". "Media rights continue to drive revenue with broadcasters keen to feature tournaments, although they face competition from online streaming for the rights to hold the most popular events".

The professional services company's annual Entertainment & Media Outlook report predicts that the value of digital music streaming will nearly double from £779 million in 2018 to £1.4 billion in 2022.

PwC also expects the United Kingdom to maintain its position as the largest OTT (over the top) video streaming market in Europe.

Christopher Vollmer, Global Advisory Leader for Entertainment and Media, PwC US, comments: "To succeed in the future that's taking shape, companies must revisit every aspect of what they do and how they do it".

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