We are predicting in our latest 2020 Global Entertainment & Media Outlook that the UK’s total Entertainment and Media revenues will increase by a 2.8% compound annual growth rate and by 2024 reach £79.8 billion. That will represent a strong recovery, coming back from the expected 6-7% decline in revenues in 2020 due to the impact of the economic recession and lockdowns caused by the COVID-19 outbreak.
We have delayed publishing the Outlook this year in order to get a clearer picture of the impacts of the pandemic. And there are two points that we would like to make regarding our resulting analysis and forecasts. First of all, we are very confident that our projections are solid, their accuracy in the future can obviously be impacted by the continuous rapid changes that relate to the pandemic, including governmental policy responses. Please talk to us directly to receive our most recent view.
Second, although the UK media industry overall has been significantly impacted by the pandemic, its effects vary while on specific sub-sectors. With self-isolation and social distancing causing UK consumers to head inside, it was mostly good news for those who provide engaging in-home content, including internet access, podcasts, music, video gaming, and over-the-top (OTT) video services. But it was not such great news – at least in the short term – for services requiring people to be in public, like outdoor advertising, magazines purchased on impulse, live music, events, and cinema.
Hopes for the Future
However, across all sub-sectors, the pandemic also has opened up the potential for new ways of engaging audiences and new revenue models as we can see how many B2B and live music events are going virtual, with sports broadcasts moving to free to air, and much more. Today’s UK media industry is much better positioned to deal with a pandemic and other disruptive events compared to how they were at the start of the century. Print is relied on less now, with more subscriptions used instead of ad-funded models, while streaming has gone mainstream, with numerous media companies more digitally enabled to help to facilitate content creation and facilitation as well as remote working collaborations.
We are expecting the media sector to show its agility once again and make a strong recovery as the economy continues to re-open. This is reflected in our current revenue forecast running through to the year 2024.
During the pandemic, the global advertising market has been through very tough times. Compared to consumer spending on Entertainment and Media, advertising has suffered much bigger declines, as companies that sell products that depend on consumers leaving their houses have stopped booking ads on different media channels. Although digital advertising was affected, it was a fairly mild impact compared to other advertising options like cinema and print newspapers. We anticipate that the UK’s total internet advertising (across classified, search, and display) is going to be down in 2020 by c.5%t. Print newspaper, by contrast, is expected to have dropped by 24% and out-of-home (physical and digital) by 30%.
With ad revenues recovering from the pandemic, it looks like digital advertising will continue outperforming other types of advertising, allowing it to rebound more vigorously from this temporary setback – like consumer spending, which has not only sustained the switch to digital within the advertising market but accelerated actively as well. Coming out of the COVID-19 crisis, brands are going to increasingly have to invest in eCommerce platforms and digital platforms, and engage with consumers at the same time across a broad range of digital media touchpoints and channels. Over time it will also underpin a recovery in digital advertising revenues. Encouraging stories also emerge from events like the Inspire Business Awards in Hampshire.