More people in the UK now subscribe to streaming video services, such as Netflix and Amazon, than pay-television, underscoring the challenges cable, satellite and public service broadcasters are facing in the digital age.
A new Media Nations report from Ofcom, the UK media regulator, found there had been a “major shift in the UK’s viewing habits” as viewers moved to new digital services.
The number of UK subscriptions to the three largest streaming services — Netflix, Amazon Prime and Sky’s Now TV — hit 15.4m in the first quarter of 2018, eclipsing the number of pay TV subscriptions, which was 15.1m, the report found.
“Today’s research finds that what we watch and how we watch it are changing rapidly, which has profound implications for UK television,” said Sharon White, Ofcom’s chief executive.
Social networks and competing video services, such as YouTube, are drawing viewers away from television. Average daily viewing on the television set fell by nine minutes, to three hours 22 minutes, in 2017, continuing a five-year downward trend, with average viewing time falling by 38 minutes since 2012.
The shift to new platforms and services is beginning to hit pay-TV providers in the pocket, with total revenues among the competing services falling 2.7 per cent in 2017, to £6.4bn. Television advertising income fell 7 per cent, to £3.9bn.
The growth of new platforms and services has also hit spending by the UK’s public service broadcasters — the BBC, ITV, Channel 4 and Channel 5 — with total spending of £2.5bn hitting a “record low,” according to Ofcom.
“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,” said Ms White. “These challenges cannot be underestimated.”
She urged UK broadcasters to collaborate in order to contend with the threat posed by wealthy competitors from Silicon Valley.
“UK broadcasters have a history of adapting to change,” she said. “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.”
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