Huge disruption to media consumption and production makes 2020’s Ofcom Media Nations report (released today) quite the oddity, with long stints at home plus surges in free time and digital consumption shaking up ingrained behaviours.
We’ve adopted new habits. The big question, however, is whether they will stick should normality return.
Here, The Drum dives into Ofcom’s 101-page report to pick out some of the UK media trends you need to be aware of.
In April 2020, when the UK was in full lockdown, AV content consumption per person per day rose an hour and a half year-on-year, reaching 6 hours and 25 minutes.
Broadcast TV secured 3 hours and 46 minutes a day of live, recorded or on-demand watching, which was up half an hour. News consumption drove much of this.
SVOD services were up 37 minutes to 1 hour and 11 minutes a day. This medium boasted the greatest increase.
By the end of June, TV viewing slowly plateaued at +11% year-on-year.
The report makes a prediction about overall TV set viewing. Once lockdowns and restrictions ease,“it is likely to return to something close to pre-lockdown levels”, it says. “There could be an accelerated shift within total viewing away from broadcaster content as people increasingly use on-demand services.”
There will be a 12% year-on-year bounce-back in traditional TV spot advertising revenue by 2021 accordint to a forecast by Warc. We won't see it recover to pre-pandemic levels, however.
Broadcasters have made deep cuts: ITV announced a £100m cut to its programming budget (9%), Channel 4 will cut £150m in 2020 (around 22%) and Channel 5 will cut 10%.
12 million adults took up a new SVOD subscription, 3 million did so for the first time.
In pay TV, despite the loss of sport, Sky said it retained 99% of total customers across all markets since the start of the crisis. 95% of Sky Sports customers kept their subscriptions, although many paused them.
News and public service broadcasters
Demand for news programming helped the public service broadcasters (BBC, ITV, Channel 4) achieve their highest combined monthly viewing share in more than six years.
Eight in 10 people consumed the BBC News product in the first week of lockdown.
News broadcasters made up most of the top programmes.
By June 2020, public service broadcasters’ combined viewing share had fallen to 54.6% as the lack of soaps and the loss of key sporting events and entertainment programmes were keenly felt.
The resumption of Premier League football in June 2020 boosted multichannel broadcasters’ combined monthly viewing share to 30.3%, up from 27.9% in March.
Public service broadcasters’ cumulative revenues declined by 3.5% in 2019 to £2.2bn. An expected decline in TV spot advertising of between 17% and 19% in 2020 will increase pressure.
Broadcaster video-on-demand (BVOD) ad revenue increased by an average of 24% a year in real terms between 2015 and 2019, reaching £452m last year.
15m homes subscribed to at least Netflix, Amazon Prime Video or Now TV in the first quarter of 2020. Disney+ surpassed Now TV to become the third most subscribed to SVOD service. It has hit 60 million subscribers four years earlier than it expected to.
16% of online adults had subscribed to Disney+ by early July. Netflix was subscribed to by 45% of online adults at this time and Amazon Prime Video by 39%.
(95%) of Disney+ subscribers also subscribe to one or both of the two main SVOD services. In the coming recession, competition for spend will be rife.
As per Rajar data, live radio reached almost nine in 10 adults (88.8%) at the start of 2020.
Time spent listening through digital platforms accounted for 58.6% of all listening hours, up from 56.4% in Q1 2019.
Reduced in-car listening and the closure of workplaces hurt radio, with 14% of adults stopping listening altogether.
Radio broadcasters will be affected by reduced radio advertising expenditure, which fell by 3% in real terms over 2019 to £703m, with a further decline of 21% forecast for 2020.
Some of radio’s largest sources of advertising revenue, such as entertainment and leisure (which accounted for 14% of 2019 radio advertising expenditure) and the motor industry (which accounted for 13%), won’t be returning any time soon.
Linear broadcast TV ad revenues are down around £1bn since 2015 (nearly a fifth). That money’s broadly moving into the digital space. It is the impetus of said broadcasters to ensure they are active in these categories to recapture audiences and spend.
In 2019, 92% of TV advertising revenues came from TV spots (down from 95% in 2010), while combined sponsorship, product placement and other revenues represented only 8%. The linear spot is less important as time passes.
However, during the pandemic, the price of a TV spot was greatly reduced and broadcasters were working to remove most of the friction from the production process.
Meanwhile, online video advertising has grown 51% since 2015 to £2.9bn.
There’s risk ahead. Warc data states that the total UK advertising market will contract by 15.6% in 2020. It thinks TV spot advertising in Q2 2020 will decline by an unprecedented 43%.
Group M’s mid-year forecast (June 2020) predicts that UK advertising spend will contract by 12.5% in 2020.
The Ofcom report concludes: ”Whatever the shape of the advertising recovery, it is anticipated that online video advertising will continue to increase at a faster rate than linear TV advertising. By the end of 2021 it is estimated that the online video ad market will be almost as valuable as TV spot advertising.”