£13bn streaming boom defies sluggish UK economy
The UK’s digital entertainment sector emerges as a rare diamond in the rough for a stuttering national economy, with revenues surging more than four times faster than sluggish GDP growth in 2025.
Streaming services and retail drove UK revenues from video, music and games to new highs of £13.3bn, according to a recent report by the Digital Entertainment and Retail Association (ERA).
This 7.1 per cent growth year on year stands in stark contrast to the 1.5 per cent GDP growth predicted by the OBR, pointing to a significant appetite for at home entertainment despite wider economic gloom.
The report revealed that entertainment spending has become an incredibly resilient pillar of the UK creative economy.
Over the past decade, the sector has seen growth of 120 per cent, a rare tenfold increase than that of the UK economy in the same period.
Winning the share of the wallet
ERA’s chief executive Kim Bayley said that while conditions remain “tough in the wider economy”, streaming lenders and retailers are succeeding it obtaining a bigger slice of discretionary consumer spend.
While Rachel Reeves has admitted that there is “more to do” to build economic momentum, the entertainment sector appears to have already found its second wind, recording its fastest growth rate since the pandemic.
Ads-driven growth
Crucially for investors and media buyers, the business model propelling this rise reached an inaugural milestone in 2025.
For the first time, the number of streaming subscribers on packages which included ads overtook those on higher-priced, but ad-free plans.
Richard Broughton, executive director at Ampere Analysis, said we are “now reaching an inflection point in the streaming world”, marking a huge about turn from the earlier days of streaming.
Not long ago, streamers eschewed advertising in favour of pure, ad-free subscription models.
The number of UK subscribers on ad-supported plans globally has hit the 26 million threshold, as consumers looked to mitigate the rising costs of so-called ‘bundle fatigue’.
A typical subscriber paying for a standard monthly tier across players like Netflix or Amazon prime now faces a monthly bill of £64, a 14 per cent increase from 2022.
That shift fuelled a quickly expanding ad market in the UK, which hit the £1.38bn mark just this year.
The creative heavyweights
Video remains the largest of the three sectors surveyed by ERA, with growth increasing to eight per cent to reach £5.4bn.
Kim Bayley highlighted the weight of these platforms, noting that the video business is now nearly twice the size it was at the height of the DVD boom in 2004.
Growth was driven largely by streaming-video-on-demand services, with the film Wicked coming out as the year’s top seller, with nearly one million units sold.
The gaming sector also saw a successful return to form, growing 7.4 per cent to reach £5.4bn, fuelled by an 8.8 per cent increase in revenues from mobile games.
Notably, games remain the last bastion of the “ownership” model, with 45 per cent of revenue generated by fans buying titles outright, instead of accessing them through subscription.