The entertainment and media sector has changed its strategy to focus on digital investment, and it appears to be working. Although the global economy may be facing some turbulence, through online targeting, the entertainment industry has been able to create stronger connections with consumers allowing the sector to flourish with a future that looks very promising.
The entertainment industry in the UK spans several different sectors, including online gambling, such as online slots UK, and television, such as the BBC and film. The way in which advertising is being done has moved to a more online strategy that is increasingly more mobile and accessible through digital platforms.
The growth of the online entertainment sector
In 2020, the entire media and entertainment industry fell by 2.3% in revenue. Still, it quickly recovered in the following year, rising an impressive 10.4% putting it back on track to outpace the overall growth of the globe. The global industry grew 7.5% in 2022, totalling $2.5 trillion US dollars. Global growth is set to see a compound annual growth rate of 4.6% through 2026. It is expected that non-digital advertising will continue to slow in growth for the next three years and decline by 2025. The video game industry is set to continue rising through 2026 with a compound annual growth rate of 8.4%, generating a whopping $321 billion dollars. Many people have moved to play games online, such as slot machines or games that can be played with friends contributing to this massive increase in revenue. This comes after a 32% rise in growth from 2019-2021, showing a huge increase in consumers flocking to play video games as a new generation comes into the picture.
On the other hand, traditional TV is set to shrink with a negative 0.8% compound annual growth rate over the next three years. This would decrease the revenue from $231 billion US dollars in 2021 to $222.1 billion US dollars in 2026. Cinemas were hit considerably hard in 2020; however, they are set to make a recovery reaching previous levels in 2023 with an estimated revenue of $45.2 billion US dollars in 2023. The big contributor to the online entertainment sector’s growth is online advertising, which saw a 22.6% growth in 2021 after experiencing a drop of 7% in 2020. By 2026, the online advertising industry will be expected to expand at a compound annual growth rate of 9.1%, with total revenue reaching $723.6 billion US dollars. It is also estimated that the online advertisement sector will receive 70% of its revenue from mobile-targeted advertisements. This rapid growth of the online advertising industry can be attributed to consumers switching to online platforms to fulfil their daily needs, which creates a much greater reach of advertisements to more consumers.
Growth in the UK
By the end of 2026, it is expected that the entertainment and media industry will reach a value of nearly $3 billion in the UK. The most up-to-date research has also suggested that the United Kingdom will lead the market in Europe in 3 years. The UK’s media and entertainment market has recently seen exponential growth and is close to overtaking competitors. By 2026, it is expected that the entertainment sector in the UK will pass Germany and be worth £100 billion. This significant rise in the entertainment sector in the UK can be attributed to a great increase in digital consumption occurring in the UK, which has driven the growth of both media and entertainment.
The UK is seeing this strong growth in the entertainment industry due to the mass availability of high-speed internet access, allowing e-commerce to flourish. This year alone, the revenue from the entertainment and media sector is set to hit £83 billion. Revenue from online advertising has grown to £26 billion in 2022 and is expected to see a compound annual growth rate of 6% until 2026. This makes up over a third of the entire revenue from the entertainment sector and will contribute to a 4% increase in the sector overall in the next 3 years.
The growth in the UK’s entertainment and media sectors can be seen to increase steadily due to the use of mobile phones. Everyone carries around mobile phones, even from a very young age. We are constantly able to consume media at our fingertips. In addition, mobile phones allow for the constant consumption of advertisements. Once again, media and advertising consumption may be constant and very easily available. With media being produced on mobile-friendly platforms – such as short videos on social media websites including Twitter and TikTok, instead of watching long movies or television series, the media that is now chosen is short and snappy. The growth of this style of content has allowed the UK’s entertainment and media sectors to grow adjacent to one another. Studies have shown that people are spending less time at home. However, our screen time does not appear to be decreasing – this shows that the UK public will still be watching and consuming media in a different format as long as it can accompany them wherever they go.
