The UK Media and Entertainment sector has exhibited solid growth to reach GBP 39.1 bn by the end of 2013. Consumer spending on media and entertainment accounted for more than half the total industry inflows, though the proportion coming from advertising is now growing strongly. Both segments exhibit a strong shift towards digitization. Within product genres, and when combining online and offline spend, TV/Video and Gaming exhibit overall revenue growth, whereas Music/Radio and Newspapers/Magazines remain in decline.
Several trends and developments help to distinguish the UK market:
In this report, Arthur D. Little has analyzed the payment flows between the various industry actors. It is apparent the recent beneficiaries have been the contents and rights owners, whereas retailers of physical media have been the hardest hit and are forced to radically adapt their footprints and business models.
Looking forward, we expect continued growth, propelled by further increases in population, advertising spending and take-up of online services. This, coupled with foreign currency effects, will place the UK media and entertainment market well ahead of aggregated European peers in Euro terms for the foreseeable future.