NEWS19 July 2018

Streaming subscriptions surpass pay TV providers, finds Ofcom

Media News Technology Trends UK

UK – Subscriptions to online streaming services such as Netflix have overtaken those of traditional pay TV providers, according to research from Ofcom.

Netflix button on TV remote control

The media regulator’s Media Nations report found that the total number of UK subscriptions to Netflix, Amazon Prime and Sky-owned Now TV reached 15.4 million in the first quarter of 2018, surpassing subscriptions to pay TV providers such as Sky, BT and Virgin Media ( 15.1 million).

Revenue generated from pay TV services has also declined, seeing a 2.7% drop in total revenue to £6.4bn last year. However, despite the decline, pay TV revenue remains higher than revenue generated via video-on-demand subscriptions, according to the research.

The trend of spending less time watching broadcast TV on a TV set has continued, averaging three hours and 22 minutes in 2017, a decline of 4.2% since 2016 and 15.7% since 2012. Although viewing declined across all age groups, it is steeper among children and adults aged 16 to 34, with those aged 65+ watching four times as much broadcast TV as children in 2017. Additionally, over-54s now account for more than half of all UK broadcast TV viewing.

The report also found that public service broadcaster spending has decreased, with the BBC, ITV, Channel 4 and Channel 5 spending a combined £2.5bn on original UK-made programmes last year, a 28% fall from the £3.4bn spent in 2004.

Sharon White, chief executive at Ofcom, said: “We have seen a decline in revenues for pay TV, a fall in spending on new programmes by our public service broadcasters, and the growth of global video streaming giants. These challenges cannot be underestimated.

“But UK broadcasters have a history of adapting to change. By making the best British programmes and working together to reach people who are turning away from TV, our broadcasters can compete in the digital age.”