Outlook for entertainment and media

The COVID-19 pandemic created unprecedented disruption across the global economy during 2020, with few industries escaping its effects. Government-imposed lockdowns, social distancing measures, travel restrictions and the closure of non-essential businesses fundamentally changed the way organisations operated. While some sectors experienced severe financial losses due to mandatory closures, others adapted quickly by embracing digital technologies and changing consumer behaviour. The Entertainment and Media (E&M) industry provides a clear example of this contrast, with some sub-sectors thriving while others struggled to survive.

Over-the-Top (OTT) video

One of the strongest-performing areas of the entertainment industry during 2020 was the Over-the-Top (OTT) video market. Streaming services experienced exceptional growth as millions of people remained at home due to lockdown restrictions. With cinemas closed and live entertainment cancelled, consumers increasingly turned to subscription video-on-demand (SVOD) platforms for entertainment.

Market leaders such as Netflix and Amazon Prime Video recorded substantial increases in subscriber numbers throughout the year. However, competition within the streaming market intensified following the launches of Apple TV+ and Disney+, both of which attracted significant audiences with exclusive content and competitive pricing. Smaller services, including BritBox, also benefited by targeting viewers seeking British television programming.

The increased demand for streaming services demonstrated a long-term shift in consumer viewing habits away from traditional broadcast television and towards on-demand digital content. Industry analysts predicted that this trend would continue beyond the pandemic, making OTT video one of the fastest-growing sectors within entertainment and media.

Video games and Esports

The video games and esports sector also experienced remarkable growth throughout 2020. As people spent more time indoors, gaming became one of the most popular forms of entertainment for individuals and families alike. Sales of gaming consoles, video games and digital downloads increased significantly, while online multiplayer games allowed people to remain socially connected despite physical distancing measures.

Subscription-based gaming services and cloud gaming platforms also gained momentum. Google's Stadia platform, launched shortly before the pandemic, represented an early move towards cloud gaming, allowing players to access games without expensive hardware. Meanwhile, subscription services offered by Microsoft and Sony continued to expand their customer bases.

Esports also continued to grow in popularity despite the cancellation of many live tournaments. Organisers adapted by hosting competitions online, enabling professional players to compete remotely while audiences watched through streaming platforms such as Twitch and YouTube. Mainstream media coverage of esports increased throughout the year, helping to broaden its appeal beyond traditional gaming audiences.

Overall, the gaming industry proved highly resilient during the pandemic and emerged as one of the strongest-performing sectors within entertainment and media.

Live music and events

In contrast, the live music and events industry suffered one of the most severe economic impacts of any entertainment sector during 2020. Government restrictions prohibited large gatherings, resulting in the cancellation or postponement of concerts, music festivals, theatre performances, sporting events and live tours across the UK and around the world.

The closure of venues placed enormous financial pressure on artists, promoters, venue operators and freelance workers. Thousands of employees working in technical production, security, catering, transport and hospitality also experienced significant income losses as events were cancelled.

Although the UK Government introduced emergency financial support for the arts and cultural sector, including substantial funding to help organisations survive, many businesses remained vulnerable. Across Europe, live entertainment organisations reported operating in survival mode, with hundreds of thousands of performances cancelled throughout the year. The economic impact extended well beyond the entertainment industry, affecting local businesses that relied on visitor spending during major events.

Many performers attempted to maintain contact with audiences through live-streamed concerts and virtual events, but these alternatives generated only a fraction of the revenue normally produced by in-person performances.

Looking ahead

The experience of 2020 demonstrated that the COVID-19 pandemic accelerated digital transformation throughout the entertainment and media industry. Organisations capable of delivering digital products and services experienced strong demand and, in many cases, record growth. Streaming services, gaming companies and digital content providers successfully adapted to changing consumer behaviour and strengthened their market positions.

Conversely, businesses dependent on physical attendance faced unprecedented challenges. Many organisations were forced to reduce operations, furlough staff or permanently close due to prolonged restrictions and declining revenues.

Looking forward, industry experts expected many of the behavioural changes developed during the pandemic—including increased streaming, digital gaming and online content consumption—to continue even after restrictions were lifted. As a result, organisations investing in digital innovation, flexible business models and online customer engagement were considered better positioned for future growth in an increasingly digital entertainment landscape.