Television

UK TV industry sees revenue growth: Ofcom report

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MUMBAI: The Communication Market 2014 report of Ofcom, an independent regulator and competition authority for the UK communications industries, highlights that TV industry generated ?12.9 billion in revenue during 2013, an increase of ?426 million (3.4 per cent).

The increase was driven by growth in subscription revenues and net advertising revenues. However, there was a small decline in publicly-funded television programming in 2013, following an eventful year in 2012, including the London Olympic and Paralympic Games.

The report examines the key developments and trends seen in the UK television market during the past year. Some of them include:

Pay-TV subscription revenue continues to drive the growth as subscription revenues increased by 6.7 per cent in 2013 to reach almost ?5.9 billion. Subscriptions now account for 46 per cent of all television industry revenues in the UK.

As far as broadcast-based TV advertising income is concerned, it returned to growth in 2013, increasing by 4 per cent (or ?146 million) to reach almost ?3.7 billion, its highest level in the past five years. The largest proportional growth was in the commercial PSBs’ portfolio channels, where revenues increased by 14 per cent to reach a combined total of ?669 million.

Online TV revenue saw an increase of 41 per cent in 2013 to reach ?364 million. The subscription model saw the steepest growth; revenue rose by 76 per cent to ?112 million, possibly indicating that online streaming services are gaining traction in the UK market.

Spend on content by all UK TV channels rose by 3.7 per cent to reach ?5.8 billion. In a year  of English Premier League broadcast rights renewal, spend on sports programming grew by 19 per cent to reach ?1,808 million or 59.1 per cent of all programme spend on commercial non-Public service broadcasting (PSB) channels. Spend on BBC digital channels and the other PSBs’ portfolio channels also increased, rising by 6 per cent and 4 per cent, respectively. However, spend on first-run originated programming for the main five PSB channels declined by 5 per cent; from ?2,588 million in 2012 to ?2,451 million in 2013, partly due to there being no major sporting events that year.

In Q1 2014, 12 per cent of TV households had a smart TV, an increase of five percentage points on the previous year. Among smart TV owners, use of the internet functionality is increasing. 82 per cent used the internet connection on their TV in 2014 compared to 77 per cent in 2013 and 65 per cent in 2012.

Nonetheless, the TV viewing has remained resilient, although there was a decline in 2013 across all age groups. According to broadcaster audience research board (BARB), average viewing dropped from 241 minutes in 2012 to 232 in 2013 among all individuals, with all age groups experiencing declines. This may be due in part to changing media habits, but it might also have been influenced by the hotter summer in 2013 and a lack of ‘event’ viewing – in previous years viewing was boosted by major sports events such as the 2010 Football World Cup or the Olympic Games in 2012. However, among 16 to 24 year olds viewing has declined for three consecutive years: from 169 minutes in 2010 to 148 in 2013.

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