Several trends and developments help to distinguish the UK market:

• Consumers relentless adoption of new device formats and new services, coupled with multi-tasking and media stacking, means UK citizens now spend more than 11 hours of ‘effective’ time every day using communication and media services.
• Content distributors, including the BBC, are gearing up to respond to these trends, and the generational shifts that underlie them.
• The continued cross-sector battle between Telecoms and Media giants BT and Sky is exacerbating contents rights inflation, and other actors – notably ITV – are investing heavily in content production.
• Dynamic new segments like videogaming – where UK-based studios truly create world class content – are growing resiliently and are significant developers of talent, as well as major exporters.

In this report, Arthur D. Little has analyzed the payment flows between the various industry actors. It is apparent the recent beneficiaries have been the contents and rights owners, whereas retailers of physical media have been the hardest hit and are forced to radically adapt their footprints and business models. Looking forward, we expect continued growth, propelled by further increases in population, advertising spending and take-up of online services. This, coupled with foreign currency effects, will place the UK media and entertainment market well ahead of aggregated European peers in Euro terms for the foreseeable future.