Knowledge & Insight

The UK media and entertainment industry

Tue 9 August 2016

Many industries could be described as “diverse” and “dynamic”, yet the UK’s thriving media and entertainment sector stands head-and-shoulders above all others in this respect. The industry spans TV and film, news, music and magazines, books, gaming, social media and advertising content. And it connects with local and global audiences via multiple platforms, including TV, cinema, print, live performance and the web. It both reacts to, and drives, change in social and consumer behaviour, and it plays a major role in shaping the cultural and political landscape of our nation.

Commercial scope

The media and entertainment industry plays a significant role in sustaining UK economic growth. According to a recent paper by Deloitte, the top ten UK companies in this sector have a combined income of almost £60 billion. Of the total revenue generated by the UK’s top 100 UK media and entertainment firms, 41% comes from television, while 20% is generated by advertising companies.

Information publishing accounts for 19% of total sector revenue, with 6% derived from film and 4% from gaming. This, however, is merely a snapshot, and doesn’t reflect the changing shape of the sector. Indeed, according to Deloitte, the three fastest growing UK companies in the sector were Facebook UK, Google UK and Fox productions UK, which reflects both rapid technological change and the continual evolution of consumer demand.

The major players

Despite the remarkable growth of the online operators, WPP still sits at the head of the list of UK media companies, employing approximately 190,000 staff across more than 100 countries. Behind WPP in second place comes Liberty Global, the world’s largest cable TV and broadband provider. And third place in the “gross revenue premier league” goes to SKY. Across the board, the media and entertainment sector has been consistently delivering annual growth of over 6%, with revenues driven chiefly by television, advertising and information publishing.

A global success story

The UK media and entertainment industry represents a major global success story. Yet surprisingly, the majority of revenues are still earned from the domestic marketplace, and this represents a significant opportunity for further growth overseas. British media brands are highly respected overseas, whether that’s the trustworthy BBC News, or our ground-breaking TV drama box sets.

The challenge facing UK media firms is therefore twofold – to protect domestic market share from aggressive new entrants, particularly in the online sector, and to increase penetration into valuable markets overseas, where their “Britishness” is likely to prove a competitive advantage.

Looking ahead

The growth of Google, Facebook and Amazon highlights the influence of a new generation of multinational corporations with the power to disrupt marketplaces across the globe. And these three in particular have already made it clear they intend to expand their operations in film, TV, music and news distribution. Yet the direction of the media and entertainment industry isn’t driven just by the big players. It is advances in digital technology and communications that ultimately define what is, and what isn’t, possible. Fortunately for the UK economy, that’s another sector where home-grown firms lead the field.

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