PwC: UK media market set to overtake Germany as largest in Europe

The UK is on track to dethrone Germany as Europe’s largest entertainment and media market next year, driven by a surge in internet advertising and a resurgence in cinema and live music, according to new PwC data.

Despite a sluggish recovery from a flat 2023, the UK’s entertainment and media sector is forecast to exceed £100bn in revenue for the first time in 2024, with growth expected to reach £121bn by 2028, according to PwC’s Global Entertainment and Media Outlook 2024-2028.

The booming internet advertising market is fuelling the growth, with the market set to soar from £32bn in 2024 to £44bn by 2028, as paid search, retail media and video advertising gain momentum, the Big Four firm said.

Dan Bunyan, partner at PwC, warned that the maturity of the UK’s internet advertising market, which is one of the most online-heavy in the world, makes it more sensitive to macroeconomic factors.

“Even so, the market is still expected to grow over the next four years with paid search supported by rapid gains in retail media, and video supporting growth,” he said, adding that AI will increasingly shape how ads are created, placed and measured.

After being hit hard by the pandemic, the UK cinema and live music sectors are expected to bounce back. Cinema revenue is predicted to exceed pre-Covid levels by 2027, with box office spending to hit £1.3bn by the end of 2028.

Blockbusters like Barbie and Oppenheimer revitalised the box office last year and major releases such as sequels to Mission: Impossible Dead Reckoning, Jurassic World and Avatar are scheduled for 2025.

Live music ticket sales are also projected to reach £2.5bn by 2028 as major events and tours like Taylor Swift’s Eras Tour have boosted the economy.

“Continued growth in consumer spend on online platforms such as for gaming and streaming, together with offline environments like cinema and live music, highlight that consumers continue to seek engaging content experiences – regardless of the means of consumption,” Bunyan continued.

“Investment in high-quality content remains critical for the UK E&M economy to maintain its leading position in Western Europe.”

The service sector, particularly in internet access, is set to grow from £28bn to £32bn by 2028, driven by increased digital consumption. Mobile revenue will lead this growth, with 5G subscriptions expected to nearly triple as demand for social networking, video streaming, and gaming rises.

Mary Shelton Rose, partner at PwC, said to capitalise on its progress and opportunities, the UK “must leverage the power of new and emerging technologies such as GenAI, re-shape its business and creative models, and better leverage technology for advertising”.