PwC: UK media companies hold their nerve during economic turmoil

Overall, PwCs report forecasts the UK M&E industry to grow at a compound annual growth rate of 4 per cent over the next four years, with revenues reaching £97 billion by 2026

By Jenny Priestley

Published: September 27, 2022 Updated: September 28, 2022

Overall, PwC's report forecasts the UK M&E industry to grow at a compound annual growth rate of 4 per cent over the next four years, with revenues reaching £97 billion by 2026

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The UK's media and entertainment companies are holding their nerve despite facing economic headwinds, states PwC's latest report, UK Entertainment and Media Outlook (E&M) 2022-26: Trusting the digital path ahead.

According to the analysts, while there is short-term uncertainty in the market, confidence and growth can be seen in the long-term direction of the M&E industry .

PwC says this can be seen in the increase in deal activity in the market, which increased by 72 per cent in 2021 compared to the previous year.

Overall, PwC's report forecasts the UK M&E industry to grow at a compound annual growth rate of 4 per cent over the next four years, with revenues reaching £97 billion by 2026.

Despite the economic headwinds, the UK's entertainment and media industry has yet to take cover, said PwC's Dan Bunyan. That's because while there's no denying the short-term uncertainty in the market, there is greater confidence in the long-term direction of the industry.

This is reflected in the record numbers of deals that took place last year. While investor confidence has slightly softened in the face of economic headwinds, we still expect high deal volumes in the years ahead. Platforms that can help brands discover and engage with customers in new environments will become increasingly valuable. Investors will remain keen to support companies that can help facilitate buy and build' strategies to bring together complementary specialist capabilities to serve brands and content owners in a more compelling way.

However, PwC did include a note of caution, particularly around rising inflation and its impact on both content providers and advertising businesses. The report states that possibility of consumers switching down subscriptions, coupled with rising production costs, is expected to impact content businesses. If inflation leads to reduced consumer demand then this may have a knock-on impact on marketing effectiveness in the short-term, said the report. Depending on how brands react, this may soften advertising prices in some channels.

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