LONDON: The UK entertainment and media market is forecast to be worth £64bn by 2018, with advertising one of the fastest growing sectors a new study has said

The latest Global Entertainment & Media Outlook report from consulting firm PwC projects a 3.1% compound annual growth rate between 2013 and 2018 for the industry, which covers 13 sectors including: TV subscriptions and licence fees, TV advertising, internet access, radio, out-of-home (OOH) advertising, video games, filmed entertainment, newspaper publishing, consumer magazine publishing, business-to-business, internet advertising, consumer and educational book publishing and music.

Internet advertising, out-of-home advertising and TV advertising were among the five areas growing most rapidly, the remaining two being internet access and video games.

The UK internet advertising market, already the largest in Europe and the third largest in the world behind the US and China, is expected to grow around three times as fast as the overall entertainment and media market to reach £9.6bn in 2018.

"London is widely considered the digital advertising capital of Europe, and linguistic similarities mean that the UK tends to be the first port of call for US publishers and ad tech players entering the European market," noted Phil Stokes, Entertainment and Media lead partner at PwC. "All of this adds up to a vibrant, and still growing, internet advertising sector."

Within the sector, paid search dominated and will continue to do so, with revenues set to reach over £4bn in 2018. Mobile is now installed in second place, its share of internet advertising revenues soaring from 1% in 2009 to 23% by 2018 when it will be worth £2.2bn.

Video internet advertising is the single fastest growing segment, predicted to almost triple between 2013 and 2018 to reach £717m, a compound annual growth rate of 23.9%. But this will still only make it the fifth-largest segment of internet advertising, with just 7% of total revenue.

Of the other two expanding advertising sectors, OOH is forecast to increase at a CAGR of 5.2% to reach £1.3bn in 2018, with digital OOH overtaking physical OOH this year. TV advertising is predicted to grow at a CAGR of 3.5% to reach £4.3bn in 2018.

Commenting on the unstoppable rise of digital, Stokes observed that "media companies don't need a digital strategy anymore; they need a business strategy, and a business model, which is fit for the digital age."

Data sourced from PwC; additional content by Warc staff