Ofcom's New Reference Publication unveils decline of Pay TV revenues

posted on 26 July, 2018   (public)

High level of investment in original content is a key driver

On 18 July 2018, Ofcom published the very first edition of Media Nations 2018, a comprehensive study of major trends in the UK’s television, radio and audio sectors. Media Nations is a reference publication for industry, stakeholders, academics and consumers which provides data and analysis on traditional broadcast television and radio services, and on the take-up and impact of subscription on-demand and streaming services. Of particular interest is the data report accompanying the study which provides interactive access to an extensive range of data.

The report highlights a competitive shift within the UK television industry, driven by the rise of the major global internet companies and the changing habits and preferences of UK audiences. The study finds that:

  • The take-up of superfast broadband and connected TV sets is changing how people watch television programmes: Viewing of broadcast television on the TV set fell in 2017 to an average 3 hours 23 min per day; since 2012, there has been a total decline of 38 min (15.7%). However, time spent using the TV set overall remains constant as viewing of non-broadcast content increases. Non-broadcast content (incl. SVoD such as Netflix, and YouTube viewing) makes up 42 mins (17%) of the 4 hours 9 minutes of total TV and AV content watched per day on a TV set. Younger viewers drive the change in viewing habits while the profile of broadcast TV viewers continues to get older.
  • The rise of online video is changing the picture for the TV industry: there are now more subscriptions to Netflix, Amazon and NOW TV than there are to ‘traditional’ pay-TV services. 11.1 mio households (39.3%) have at least one of either Netflix, Amazon or NOW TV. The high level of investment in original content is a key driver. Pay TV revenues have declined for the first time, after a period of sustained growth.
  • Audiences continue to watch and value public service broadcasting, especially news, children’s programming and UK-made programmes. PSM remain a trusted source of news in the digital age. Providing 'news programmes which are trustworthy’ continues to be considered the most important PSB purpose by regular viewers (84% in 2017). However some worrying trends indicate that spending on new, UK made programmes by the public service broadcasters fell to a record low. Spend on some PSB genres such as new UK children’sprogramming is also at a record low.
  • The viability of local TV services remains uncertain with many local TV services continuing to face challenges in generating revenue.
  • While digital listening is transforming the radio landscape, radio continues to be resilient.

Media Nations 2018

News release on the report

Key trends in Northern Ireland, Scotland and Wales.

Source: Ofcom's Website