Streaming Media
The UK media landscape has its own idiosyncrasies but the broad picture remains the same as in the U.S and the rest of Europe – linear TV is in accelerated decline but overall viewing of TV and video is rising online. And as elsewhere the trends are most marked among younger people.
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The latest annual Media
Nations report into the UK sector covering 2023 by the country’s media
regulator Ofcom reveals that significantly fewer young people are tuning in to
traditional TV than ever but that the TV set itself is becoming more popular
among the same age group – only they tend to be watching YouTube and not BBC
One.
Notably, the proportion of time spent watching YouTube
in-home via TV sets increased from 29% in 2022 to 34% in 2023, while the
proportion for SVoD/AVoD rose from 81% to 85%.
The decline in broadcast TV’s reach accelerated in 2023 but
overall viewing of TV and video increased on video-sharing platforms such as
YouTube, and broadcasters’ own VOD (BVoD) services such as iPlayer and ITVX.
“Social video is poised to compete more directly with TV and
BVoD on connected TV, with YouTube in particular seeing a significant
proportion of its viewing take place via the TV set,” noted Ofcom.
For the first time, less than half of 16-24-year-olds are
now watching broadcast TV in an average week, according to Ofcom’s study.
Just 48% of young audiences tuned in in an average week last
year, down from 76% in 2018. The decline in weekly reach among middle-aged
viewers (45-54s) also accelerated, falling from 89% to 84% in a single year.
16-24 year olds aren’t just watching broadcast TV less
frequently, they’re also watching for shorter periods at only 33 minutes each
day – down 16% year on year. Of this, a mere 20 minutes is spent watching live
TV.
In comparison, they’re spending three times as long each day
(1 hour 33 minutes) watching video-sharing platforms such as TikTok and
YouTube.
YouTube the new TV
Total in-home use of YouTube was up 20% to 38 minutes per
individual per day by December 2023.
Over this period the average time spent viewing YouTube on a
TV set increased by 70% (from 9 to 15 minutes per day), while for 16-34s the
increase was even greater, at 93% (9 minutes to 17 minutes).
Children are skewing most towards the TV set for their
YouTube consumption, at 45% in 2023, up from 36% in 2022.
Videos up to 15 minutes long (excluding YouTube Shorts) were
the most popular form of content on YouTube (62%), followed by YouTube Shorts
(47%) which has grown in popularity since 2023 (36%).
BVOD switch is working
One of the idiosyncracies of the UK market is the dominance
of BVoD platforms which are a growing proportion of total viewing to
broadcasters’ content (to 13% across 2023, up 3% YoY).
Here the largest increases were among older audiences; for
example, 55-64s and over-74s increased theirs by 32% and 43% respectively (to
28 and 24 minutes per day).
Ofcom notes that the rapid growth in total BVoD viewing “was
not enough to compensate for the large decline in viewing of broadcasters’
linear channels, which nevertheless continues to account for a large majority
(87%) of total viewing of broadcaster content.”
That said, these proportions vary by broadcaster. Viewing to
Sky (Sky Now) and the BBC (iPlayer) skews more towards the broadcasters’ BVoD
services (accounting for 20% and 18% of total viewing respectively), whereas
Channel 5 remains predominantly linear-based, with 95% of all its viewing going
to its broadcast linear channels and 5% to its BVoD service, My5.
Daily average viewing time to ITV’s BVoD service ITVX
increased by 57% year on year to nearly four minutes per person per day in
2023, while the proportion of total viewing to ITV via BVoD rose from 7% to 11%.
Reorienting around VoD continues to be a key focus for
broadcasters. This has seen them expand their catalogues, experiment with
‘windows’, and refine the streaming user experience, among other initiatives.
The PSBs will also hope to benefit from new availability and
prominence rules – part of the Media Act that was passed in May 2024 and to be
implemented by Ofcom – designed to ensure online PSB services are both
available on popular TV platforms and capable of being easily found and
discovered by audiences.
The amount of content available on BVoD has increased
significantly over the past two years. Cumulative catalogue hours available
across BBC iPlayer, ITVX, Channel 4 streaming and My5 totalled 65,923 in May
2024, up by 47% compared to May 2022, as charted in the report.
SVOD hits a plateau
SVoD was the primary driver of overall UK market growth,
generating about £700m more than in the previous year, just under £4bn in
total, with this increase largely 30 driven by price rises.
However, with the rate of stacking holding steady at 2.3
subscriptions per household throughout 2023, the pure subscription market is
believed to have plateaued. The next phase of market growth is set to come from
ad-supported tiers.
Netflix remains the #1 SVoD provider in the country with 58%
of households. Over two million of Netflix’s 16.7 million UK households were
estimated to be on the streamer’s advertising-supported tier.
Netflix also remains the most-watched SVoD, averaging 21
minutes per person per day in 2023 and accounting for over half of total
SVoD/AVoD viewing time for all age groups. Disney+, while in third place in
terms of household penetration of these services, ranked second in terms of
daily viewing (9 minutes), slightly ahead of Amazon Prime Video (7 minutes).
While British audiences are satisfied overall with SVoD
packages, some viewers express dissatisfaction with elements of it. Ofcom’s
survey found that nearly half of adults and teens (46%) agreed with the
statement: ‘there are too many video-on-demand services’ and 42% agreed
with ‘I find the amount of content available on video-on-demand services
overwhelming’.
While some audiences are unsubscribing, most (68%) said ‘they
would miss video-on-demand services if they were no longer available’.
Audiences’ reluctance to give up these services, despite the cost, may explain
the plateauing of subscriptions to SVoD services, according to Ofcom.
Sports up and news down
Live broadcast TV dominating the viewing diets of the
over-45s. Big TV ‘moments’ capturing live national and international events
rank highly in 2023’s list of most-watched programmes, including the New Year’s
Eve Fireworks (12.1 million viewers), The Coronation of The King and Queen
Camilla (12 million viewers) and the Eurovision Song Contest (10.1 million
viewers).
The most-watched event so far in 2024 has been the UEFA Euro
2024 men’s final between England and Spain, with the BBC's and ITV's coverage
together averaging 15.1 million viewers that day.
“But while live TV may not have the universal pull it once
did, its role in capturing those big moments that bring the nation together
remains vital,” notes Ian Macrae, Ofcom’s Director of Market Intelligence.
News was the genre with the largest year-on-year viewing
decline on linear. Current affairs programming also exhibited decline.
Ofcom reckons this trend may be driven by factors including
an increase in the use of social media platforms for news (which includes PSBs’
social media channels) and a decrease in the overall level of interest in news.
On SVoDs Brits prefer to watch films, with Netflix’s Chicken
Run: Dawn of The Nugget and Disney+’s Elemental topping the list of
most watched content (measured over a 28-day period to be comparable to
broadcast TV programme audiences). Films account for over a quarter of viewing,
while drama remains the largest genre with about two-fifths of viewing.
Tough financial situation
The extent of the difficulties facing broadcasters was
evidenced by a 7.5% year-on-year decline in combined revenues for commercial
PSBs, digital multichannels and pay-TV operators, falling by £824m to £10.2bn. Linear
ad spend fell by 13.6% and total TV ad spend (linear plus BVoD) by 8.9%.
“The challenging macro-economic environment significantly
coloured the performance of the commercial PSBs, as well as many digital
multichannels (which rely primarily on income from advertising),” said Ofcom.
Pay-TV operators including Sky, Virgin Media and EE (BT) saw
their collective revenue decline by 3.6% to £6.2bn, as continued subscriber
declines failed to offset price rises.
Although connected TV advertising grew by 21% in 2023 to
£1.2bn, a survey of marketers conducted by ad-tech provider Teads
revealed some hesitancy to invest in this format, which suggests
unrealised potential.
However, improved trading conditions this year, aided by
higher levels of consumer confidence and inflation now slowing, could see the
market return to growth. The Advertising
Association / WARC is
forecasting a 3.9% increase in total TV ad spend in 2024, driven by a
projected 14% increase in BVoD spend.
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