UK TV Market

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UK TV Market

Six trends for the future of the UK TV market are VoD penetration through the generations, SVoD subscriptions continuing to grow, TV advertising remaining resilient, alternative screen consumption, retro content and AI in media production.

VOD Penetration Through the Generations

  • Deloitte sees steady growth in a less 'expected' age group of VoD viewers — the 50+ group. They predict that within three years, 15% of content viewed by this group will be from on-demand.
  • While the younger generation is known for their more sharp shift in viewing patterns, the slow but steady adoption of VoD from over-50s is significant, as they have traditionally been the stalwart of TV viewing habits.
  • This growth is being driven by the steady pace of smartphone adoption, app use and social media use.
  • Additionally, as broadband infrastructure becomes more pervasive and cheaper, and its adoption 'standard', on-demand media consumption is a more realistic possibility for older age groups.
  • More VoD sports offerings like golf, as well as the influence of younger generations (especially as more and more young adults still live at home) will also influence the over-50s.
  • Ofcom found a 5% increase in the number of 55-64 year olds answering yes to the question, "I can see my household no longer watching broadcast TV within the next five years." A further 4% moved from "disagree" to neutral.

SVoD Subscriptions Will Continue to Surge

  • As widely reported, the number of pay TV subscribers and revenue from SVoD providers will continue to rise. This is because Brits are subscribing to these services more than ever and the rise of multi-subscription households continues.
  • Teens are targeted as new potential subscribers, as prices continue to remain at a point they can afford with their 'pocket money'.
  • Deloitte predicts that by 2023, UK households will generally have 3 SVoD subscriptions (among those who subscribe at all).
  • New entrants like Disney+ and AppleTV are expected to gain at least 2 million subscriptions (5% of all UK households) by 2023, maybe as many as 10 million.
  • With this growth, the number of content hours and content spending continues to increase dramatically. Netflix alone grew from around 9,000 content hours in 2015 to 32,500 in 2019.

Despite SVoD Growth, TV Advertising Revenue to Remain Resilient

  • Despite possible expectations given the rise of SVoD and other forms of pay TV, TV advertising revenue has remained fairly consistent.
  • The UK specifically does have some unknowns for advertisers, as Brexit and the economic downturn could play a factor, as well as increasing regulation (such as the new law about junk food ads for children).
  • It becomes a self-fulfilling prophecy as advertisers see the resilience of ad revenue now, so continue to invest in TV as a robust advertising medium.
  • Net TV advertising revenue has only declined 0.8% CAGR over the past five years in the UK.

Alternative Screen Consumption

  • As SVoD grows, so do the alternative screen consumption habits of UK viewers.
  • Importantly, though, the traditional living room TV set is not expected to see its demise.
  • As 5G continues to rollout in the UK, as well as 4K tablet screens become a realistic and affordable possibility, long-form watching on other devices will grow.
  • On the other hand, the price of high-quality TV sets continues to drop. The sharp difference in an affordable 70-inch TV versus a 10-inch tablet keeps Brits turning to their TVs in addition to alternative screens.
  • 95.2% of British households own a TV set, which has only declined minimally from earlier years.

"Retro" Content is in Style

  • Deloitte predicts that in the next five years, both broadcasters and SVoD providers will continue to increase their 'retro' content offerings. This means both increasing availability of their back catalogue (older shows) and rebooting vintage series.
  • Consumers no longer want to purchase many-disc DVD box sets, but instead they now enjoy instant access to their nostalgic favorites on-demand.
  • As overall dissatisfaction with the direction of the country grows, this feeds into a sense of nostalgia for 'better times'. Vintage TV viewing helps consumers exercise this nostalgia.
  • The most watched series across the whole UK in 2019 was Friends, a show which ended 14 years ago. Also, for example, the BBC made available several classic comedies like The League of Gentleman.
  • Many US series reboots were broadcast via UK SVoD providers. Further UK series reboots are reported, such as Queer as Folk.

AI in Production

  • AI in content personalisation and SVoD platforms is well-discussed, but AI in actual content production is also predicted to affect the UK market.
  • While earlier experiments, like BBC Four's producing an actual TV show with AI, were not wildly successful, producers are predicted to continue to try to refine this technology.
  • For example, the use of AI in subtitling and people/places/object recognition (within the show) is already happening.
  • BBC's R&D division is actively working on AI in media production. They have successfully developed a system that can edit and crop footage from multiple video feeds to product human-quality output.
  • They anticipate that improving this type of technology will increase accessibility to cultural and political events that are normally too expensive to broadcast.
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