The Covid-19 pandemic and subsequent government restrictions have delivered unparalleled disruption to almost every sector of the economy. Some industries have been virtually closed down, other have been forced to implement major operational changes in order to continue trading, and some have experienced a major upturn as consumer demands have shifted almost overnight. This mixed experience across industries is reflected in the Entertainment & Media sector, with different sub-sectors being impacted in different ways. A recent white paper published by PwC explores and predicts sector-specific performance in the medium term.
Over-the-top (OTT) video
The OTT video sector has experienced consistently strong growth in recent years, with the UK now established as Europe’s largest market by some distance. PwC predicts a further surge in revenues for 2020, boosted by countless millions of locked-down consumers subscribing to video-on-demand (SVOD) services such as Netflix and Amazon Prime. But the big two aren’t having it all their own way, with aggressive new market entrants such as Apple TV+ and Disney+ providing strong competition for this lucrative and rapidly expanding sector. And with smaller players like Britbox adding to the mix, PwC’s forecast of continued strong growth through to 2024 looks a fairly safe bet.
Video games and esports
Video games and esports is another beneficiary of lockdown, as people try to keep themselves entertained whilst stuck at home. In fact PwC predicts that by the end of 2020, UK revenue in the sector will have risen by almost 10% to over £5 billion, and will continue to grow by more than 7% each year. PwC also reports that in addition to traditional gaming, subscription-based cloud gaming is gaining traction, with the long awaited Google stadia platform launching in 2019. In addition, esports is gaining a wider audience through the launch of ePremier League and increased coverage through mainstream media.
Live music and events
Lockdown has had a catastrophic impact on the live music sector, with the mass cancellation of festivals, tours, concerts and gigs. And even though the sector has benefited from a £1.57 million arts emergency fund, the ongoing disruption is likely to decimate the UK’s live performance landscape. It’s a similar story across the globe, with the European body Live DMA reporting that most of the 2,600 live music venues and clubs it represents are in “survival mode”. DMA estimates that the number of performances in 2020 will drop by 664,000, delivering a £337m hit to artists’ fees. But with so many supporting sectors relying on the spend and footfall of large events, the knock-on effect to associated businesses in incalculable.
A socially distanced UK has presented the Entertainment and Media sector with diverse challenges and opportunities. It’s clear that organisations that rely on live audiences face a bleak future, and many firms simply will not survive in a lockdown environment. But as people are driven indoors, the digital sector has stepped up, providing rich content and new online experiences to keep customers entertained remotely. Some firms have been able to adapt, finding new ways to engage with customers, and creating new revenue models. And some have seized the opportunity presented to them, and look set to achieve strong growth as long as the ‘new normal’ continues.
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