Figure 2.1. Spend on network TV programmes: 2015

Transcription

1 1 Figure 2.1 Spend on network TV programmes: 2015 Source: Ofcom/broadcasters. Note: Figures expressed in nominal prices. Figures do not include spend on nations and regions output. BBC portfolio channels includes BBC Three, BBC Four, BBC News, BBC Parliament, CBBC and CBeebies (but not BBC HD). Commercial PSB portfolio channels include, ITV2, ITV3, ITV4, CITV, ITVBe, ITV Encore, ITV Breakfast 2, E4, More 4, Film 4, 4Seven, Five USA, 5* and Spike (and their +1 channels) Other multichannels include all genres (excluding sports and films). Programme spend comprises in-house productions, commissions from independents, acquired programmes and repeats (originations and acquisitions).

2 2 Figure 2.2 Industry metrics UK television industry Total broadcast TV industry revenue ( bn) Proportion of revenue which is BBC income allocated to TV 22% 21% 21% 20% 21% 19% Proportion of revenue generated by advertising 30% 29% 28% 29% 29% 30% Proportion of revenue generated by subscriptions 43% 44% 44% 46% 45% 45% Total online TV industry revenue ( m) Broadcaster share of total display advertising spend 43% 43% 43% 43% 43% 43% Spend on originated output by 5 main PSB channels ( bn) Spend on network content by UK broadcasters ( bn) Digital TV homes (% all households) 92% 94% 96% 95% 93% 95% Traditional pay-tv subscriptions 14.4m 14.7m 15.0m 16.0m 17.1m 17.9m Minutes spent watching TV per day (per person aged 4+) Share of the main five PSB channels in all homes 55% 54% 52% 51% 51% 51% VoD usage (% of adults 15+) 27% 43% 38% 51% 57% 59% Source: Ofcom/broadcasters/IHS/Advertising Association/Warc/BARB/GfK. Note: Expressed in nominal terms. BBC income allocated to TV includes the proportion of the licence fee that goes to S4C. Broadcaster share as a proportion of total display advertising spend excludes direct mail and classified ads and is based on Advertising Association/Warc Expenditure Report. The AA/Warc data are net of discounts, and include agency commission, but excludes production costs. Spend on originations includes spend on nations and regions programming (not Welsh or Gaelic language programmes but some Irish language). Traditional pay-tv subscriptions are from Sky, Virgin TalkTalk and BT and are provided by Enders Analysis. Sky figures include Now TV, ROI and overseas business subscriptions. TV view ing based on BARB analysis of view ing to scheduled TV programmes on TV sets up to seven days after first broadcast. After DSO in October 2012, all homes w ere required to have digital TV. From 2013, data refers to the proportion of UK homes that had a w orking TV set as defined in BARB s Establishment Survey. Data refers to Q4 of each year. BARB changed the methodology for defining a TV set home from Q and data comparisons to previous years should be treated w ith caution. VoD usage figures provided by Kantar Media TGI.

3 Figure 2.3 Weekly reach of watching activities, by time of day Weekly reach (%) 100% 90% Arrows indicate significant changes since 2014 (99% level) 80% 70% 60% 50% 40% 30% 20% 10% 0% Peak reach Live TV (72%) Recorded TV (38%) On-Demand TV* (29%) DVD/Blu-ray (13%) Online video clips (5%) 8pp 9pp 6am 9am 12pm 3pm 6pm 9pm 12am Midday Midnight Source: Ofcom Digital Day Base: Adults aged 16+ (1512) Adult diary: Chart shows the proportion of adults who recorded each watching activity (D) at each time slot across a week. *On-demand TV includes paid and free on-demand 3am 3

4 Figure 2.4 Proportion of time spent watching, attributed to activities by age group Proportion of time spent watching by activity (%) 100% 3% 3% 2% 4% 6% 6% 5% 1% 3% 1% 2% 6% 14% 4% 2% 4% 6% 12% 6% 12% 9% 80% 6% 7% 18% 17% 10% 20% 23% +14pp 21% 60% 20% 13% Percentage point change since % 20% Average weekly minutes watching* % 63% Adults % 36% 48% 55% Source: Ofcom Digital Day Base: Adults aged 16+ (1512) 16-24s (129) 25-34s (189) 34-44s (282) 45-54s (299) 55-64s (259) 65+s (354) Adult diary: Chart shows the proportion of all watching time (B2) attributed to each activity (D) by age group. *The average weekly minutes figure is among those who did any watching activity across their diary week and also includes simultaneous activity 63% 72% 83% -6pp -14pp -13pp -12pp -6pp -8pp +1pp Short online video clips Physical video Paid On-Demand TV or films Free On-Demand TV or films Recorded TV Live TV 4

5 Figure 2.5 Reach of VoD services by age, gender and socio-economic group Proportion watching VoD services in the past 12 months (%) 80% 70% 60% 50% 40% 30% 20% 51% 56% 57% 58% 59% 55% 61% 61% 62% 61% 48% 52% 53% 54% 56% 68% 74% 70% 72% 72% 64% 66% 71% 71% 70% 63% 69% 68% 69% 68% 53% 57% 58% 61% 63% 39% 49% 48% 50% 48% 23% 31% 31% 33% 35% 55% 60% 61% 62% 63% 46% 52% 53% 53% 54% H H H H H % 0% Adults 15+ Male Female ABC1 C2DE Source: Kantar Media TGI Base: GB adults aged 15+. H n=12570, H n=11657 H n= 12849, H n= 11972, H n=12310 Note: For H1 2014, 'in scope' services comprise of Channel 4.com/4oD, BBC iplayer, Blinkbox, BT TV, Demand 5, ITV.com/ITV Player, Netflix, Now TV, Sky, TalkTalk, Virgin, You View. Amazon Prime was added to the in scope services in H Note: ITV Player was rebranded as ITV Hub in November oD was rebranded All4 in March 2015.BlinkBox was renamed TalkTalk TV in early

6 Figure 2.6 Reach of selected VoD services over the past 12 months Proportion watching VoD services in the past 12 months (%) BBC iplayer Sky (all) Netflix All4 ITV Hub My5 Amazon Prime Instant Video Virgin (all) Now TV BT TV TalkTalk TV H H H H Source: Kantar Media TGI Base: GB adults aged 15+. H n=12226, H n=11853, H n=11657 H n= 12849, H n= 11972, H n=12310 Note: LoveFilm was rebranded as Amazon Prime Instant Video February OD was rebranded as All4 in March

7 Figure 2.7 Weekly reach of paid-for on-demand, by age group: 2016 vs 2014 Weekly reach (%) % 57% 50% 40% 30% 26% 33% 30% 39% 32% 20% 10% 18% 18% 19% 13% 9% 14% 7% 6% 0% Adults Source: Ofcom Digital Day 2016 Adult diary: Chart shows the proportion of adults who recorded activity (D) at any point across their diary week. Base: 2016: Adults aged 16+ (1512), (129), (189), (282), (299), (259), 65+ (354); 2014: Adults aged 16+ (1644), (101), (225), (348), (400), (311), 65+ (259) Note: Arrows show were figures have significantly increased at the 99% level since

8 Figure 2.8 Weekly reach of the most popular paid-for on-demand services Proportion watching paid-for services in the last week (%) 25% 23% 20% 15% 13% % 5% 0% 5% 7% Source: Ofcom Digital Day 2016 B2. Have you used any of the following paid-for services to stream or download films or (television) programmes in the last week? Base: Adults aged 16+ (1512 in 2016, 1644 in 2014) Note: Amazon Instant Video was LoveFilm Instant in % 5% 4% 4% Netflix Amazon Instant Video Now TV itunes

9 Figure 2.9 Selected reasons for signing-up/ using an SVoD service Proportion of SVoD users (%) To access back catalogue of TV programmes To access back catalogue of movies To watch original series made by provider To access catalogue of new movie releases To watch at a time that suits To watch multiple episodes in a row To watch exclusive content not available elsewhere To watch something different to content on main TV Cheaper than renting/buying DVDs/Blu-ray discs To watch programmes missed when initially broadcast To watch programmes wanted to see again To watch specific programme Cheaper than Pay TV subscription Access provided via 3rd party To watch content suitable for children To watch content elsewhere in the home To watch content with fewer/no adverts To access niche content 23% 28% 23% 27% 31% 9% 19% 23% 27% 24% 27% 18% 20% 22% 12% 15% 21% 13% 15% 13% 19% 14% 17% 11% 12% 13% 16% 12% 12% 15% 9% 11% 15% 16% 12% 15% 22% 9% 10% 14% 7% 9% 7% 5% 9% 8% 5% 7% 3% 5% 6% 5% Source: GfK SVoD Tracker, Q October-December 2015 EW1: Reasons for signing-up for/ using service Base: Netflix users (n=2454), Amazon Prime Video users (n=1336), Now TV users (n=619) Note: Users include those who either subscribe to or are trialling an SVoD service 39% 38% Netflix Amazon Prime Video Now TV 9

10 10 Figure 2.10 Top ten television programmes consumed among all SVoD users Total consumption (minutes) Breaking Bad Orange is the New Black Sons of Anarchy Narcos The Walking Dead Once Upon a Time American Horror Story 24 House of Cards (US) The Man in the High Castle 33,142 30,385 23,339 21,302 20,786 19,804 19,195 18,622 17,432 17, Source: GfK SVoD Tracker, Q October December 2015 Base: All SVoD users

11 Figure 2.11 Proportion of SVoD users with a pay-tv service Proportion of SVoD users with pay-tv (%) % of users that have pay-tv 75% 78% 74% 69% 50% 43% 45% 47% Sky 41% Virgin 40% BT 30% 24% 21% TalkTalk 19% 19% 20% 14% 15% 16% 18% 13% EE 10% 7% 7% 7% 1% 1% 1% 2% 0% All SVoD users Netflix users Amazon Prime Video users Now TV users Source: GfK SVoD Tracker, Q October-December 2015 P7: Services currently have Base: All UK respondents (n=3259), Netflix users (n=2454), Amazon Prime Video users (n=1336), Now TV users (n=619) Note: Users include those who subscribe to or are trialling an SVoD service 11

12 12 Figure 2.12 Total broadcast TV industry revenue, by source Growth 1 year 5 year CAGR bn bn 12.4bn 12.5bn 12.8bn 13.2bn 13.6bn 3% 3% Total 5.0bn 5.4bn 5.5bn 5.9bn 6.0bn 3.5bn 3.6bn 3.5bn 3.7bn 3.8bn 6.2bn 4.1bn 2.6bn 2.6bn 2.7bn 2.6bn 2.7bn 2.6bn 3% 4% 7% 3% -4% 0% Subscription revenue Net advertising revenue BBC income allocated to TV bn 0.7bn 0.7bn 0.7bn 0.7bn 0.7bn % 0% Other revenue Source: Ofcom/broadcasters. Note: Figures expressed in nominal terms and replace previous Ofcom revenue data for TV industry, owing to restatements and improvements in methodologies. Subscription revenue includes Ofcom s estimates of Sky UK, Virgin Media, BT TV, TalkTalk and fees for broadcasting Channel 4 channels in HD as well as that of ESPN and Top Up TV in the UK where relevant (ROI revenue is excluded). Now TV revenues are not included in 2015 figures but are in previous years. It also excludes revenue generated by broadband and telephony. Other includes TV shopping, sponsorship, interactive (including premium-rate telephony services), programme sales and S4C s grant from the DCMS. Totals may not equal the sum of the components due to rounding.

13 13 Figure 2.13 Online TV revenues m Growth 1 year 5 year CAGR 1, m 23% 40% Total m 574m 190m 795m 241m 318m 283m 451m 238m 145m 207m 180m 113m 104m 81m 83m 74m 57m 18m 23m 25m 25m 38m 66m 75m 92m 121m 156m 159m % 31% 42% 82% 3% 36% 2% 19% FTV Ad revenues Subscriptions PPV transactions DTO transactions Source: IHS. All figures are nominal. FTV (free to view) revenues include advertising revenues only and include all services delivering online video free to the end consumer. Subscription includes digital-only subscribers and users of bundled services. PPV (pay-per-view) refers to a method of renting digital content and pay to watch it for a limited period including all content consumed on an on-demand basis. DTO (download-to-own) gives the customer ownership over the files they have downloaded. Includes only revenue from long form video content and excludes revenues generated from online user generated content.

14 14 Figure 2.14 Total TV industry revenue, by sector bn bn 12.4bn 12.5bn 11.8bn bn 13.6bn Growth 1 year 5 year CAGR 3% 3% Total bn 5.4bn 5.5bn 5.9bn 6.0bn 6.2bn 3% 4% Platform operators bn 1.9bn 1.9bn 2.0bn 2.1bn 2.4bn 12% 6% Commercial multichannels 4 2.4bn 2.4bn 2.3bn 2.4bn 2.4bn 2.4bn 1% 1% Commercial PSB channels bn 2.7bn 2.8bn 2.6bn 2.7bn 2.6bn % 0% Publicly-funded channels Source: Ofcom/broadcasters. Note: Figures expressed in nominal terms and replace previous Ofcom revenue data for TV industry, ow ing to restatements and improvements in methodologies. The platform operators are Sky UK, Virgin Media, BT TV and TalkTalkTV as w ell as, in previous years, ESPN and Top Up TV in the UK (Republic of Ireland revenue is excluded). Now TV revenues are not included in 2015 figures but are in previous years. Commercial PSB channels comprise ITV/ITV Breakfast, STV, UTV, Channel 4, Channel 5 and S4C. Commercial multichannels comprise all multichannels including the commercial PSB portfolio channels. Publiclyfunded channels comprise BBC One, BBC Tw o, the BBC portfolio channels and S4C. The commercial revenues of S4C are included w ith the main commercial PSB channels w hile their licence fee revenue and DCMS grants come under publicly-funded channels. Totals may not equal the sum of the components due to rounding.

15 15 Figure 2.15 TV net advertising revenues, by source: Source: Ofcom/broadcasters. Note: Figures expressed are in nominal terms and replace previous data published by Ofcom. Commercial PSB channels comprise ITV, STV, UTV, ITV Breakfast, Channel 4, Channel 5 and S4C (and their +1 channels); Commercial PSB portfolio channels include, where relevant, ITV2, ITV3, ITV4, CITV, ITVBe, ITV Encore, ITV Breakfast 2, E4, More 4, Film 4, 4Seven, Five USA, 5* and Spike (and their +1 channels). For previous years closed channels have also been included. Sponsorship revenue not included. Totals may not equal the sum of the components due to rounding.

16 16 Figure 2.16 Total cross-platform advertising and sponsorship revenue bn bn 0.2bn 3.9bn 0.2bn 3.9bn 0.2bn 4.1bn 0.2bn 0.2bn 4.3bn 0.2bn 0.2bn 4.6bn 0.3bn 0.2bn Growth 1 Year 5 Year CAGR 7% 4% 18% 31% Total FTV Online Ad revenues 2 3.5bn 3.6bn 3.5bn 3.7bn 3.8bn 4.1bn -1% 3% Broadcaster sponsorship 1 7% 3% Broadcaster NAR Source: Ofcom/broadcasters/IHS. All figures are nominal.

17 Figure 2.17 Broadcaster percentage share of all display advertising expenditure bn bn bn 8.7bn 8.8bn 8.9bn 9.5bn 9.7bn 9.6bn 9.9bn 9.6bn 8.5bn 10.8bn 9.6bn 9.8bn 9.8bn 10.0bn % 59% 58% 58% 58% 58% 59% 60% 59% 58% 57% 57% 57% 57% 57% 57% % 41% 42% 42% 42% 42% 41% 40% 41% 42% 43% 43% 43% 43% 43% 43% Broadcaster display ad spend All other display advertising Source: AA/Warc Expenditure Report. Note: Total display advertising expenditure includes television ads, TV sponsorship, TV VoD, radio, out of home, cinema, national and regional press display, internet and consumer magazines, but does not include response advertising such as direct mail or classified ads. Broadcaster display ads include advertising, sponsorship and online VoD ad revenue. Figures are net of discounts, and include agency commission, but excludes production costs. Figures are nominal. 17

18 Figure 2.18 Breakdown of other commercial TV channel revenue: m m 712m 723m 667m 675m 694m 126m 165m 194m 190m 190m 191m 102m 91m 84m 48m 45m 46m 20m 31m 34m 8m 8m 45m 166m 164m 157m 156m 55m 47m 48m 33m 36m 34m 38m 44m 146m 157m 40m 41m 48m 47m 179m 176m 184m 192m 209m 206m Other S4C PPV TV Shopping Interactive Programme Sales Sponsorship Source: Ofcom/broadcasters. TV shopping represents aggregate operating margin of products sold via television. A funding agreement which was reached in April 2013 meant that the majority of S4C funding now comes out of the BBC s licence fee income. Totals may not equal the sum of the components due to rounding. Owing to the nature of these revenue components, annual changes may be a function of a higher number of broadcaster returns being made by the time of writing, rather than material changes in the contributions that these revenue components are making to total industry income. 18

19 19 Figure 2.19 Spend on network TV programmes: m 7,000 6,000 5,000 4,000 3,000 2,000 1,000 6,368m 6,528m 181m 188m 269m 299m 236m 215m 311m 316m 492m 507m 800m 819m 818m 820m 813m 763m 2,448m 2,601m 1 year change 3% 4% 11% -9% 2% 3% 2% 0% -6% Channel 5 Commercial PSB portfolio channels BBC portfolio channels BBC Two Channel 4 Other multichannels ITV ITV/Breakfast BBC One % Film/sport channels Source: Ofcom/broadcasters. Note: Figures expressed in nominal prices. Figures do not include spend on nations and regions output. BBC portfolio channels includes BBC Three, BBC Four, BBC News, BBC Parliament, CBBC and CBeebies (but not BBC HD). Other multichannels include main channel genres (excluding sports and films). Programme spend comprises in-house productions, commissions from independents, acquired programmes and repeats (originations and acquisitions).

20 Figure 2.20 Spend on first-run UK originated output on the five main PSB channels m 3,000 2,500 2,000 1,500 2,516m 2,506m 261m 267m 212m 247m 624m 563m 2,588m 266m 257m 564m 2,451m 263m 229m 484m 2,592m 2,576m 284m 270m 244m 211m 549m 537m Growth 1 year 5 year CAGR -1% 0% -5% 1% -13% 0% Total Nations & Regions Late night 1, ,419m 1,429m 1,502m 1,476m 1,515m 1,558m -2% -3% 3% 2% Day time Peak time Source: Ofcom/broadcasters. Note: Figures are expressed in nominal terms. They include ITV breakfast, spending in the nations and regions on English-language programming (and a small amount of Irishlanguage programmes) but not the BBC portfolio channels, BBC Alba or S4C. 20

21 21 Figure 2.21 Multichannel content spend in key genres: m 4,000 3,517m 3,060m 81m 3, m 2,670m 2,714m 77m 2,456m 285m 784m 61m 90m 66m 248m 246m 277m 726m 2, m 668m 561m 3,719m 87m 307m 841m 1,000 1,379m 1,487m 1,526m 1,800m 2,178m 2,318m Sport Entertainment Movies Factual News Children's Music Leisure Source: Ofcom/broadcasters. Note: Spend expressed in nominal terms. Excludes BBC portfolio channels but includes commercial PSB portfolio channels.

22 22 Figure 2.22 Independent producer TV-related revenues m 3,000 2,779m 2,796m 2,708m 2,588m 2,500 2,227m 2,145m 755m 694m 670m 851m 2, m 652m 156m 152m 180m 139m 147m 185m 184m 195m 1,500 87m 154m 119m 165m 1,000 1,539m 1,668m 1,586m 1,570m 1,356m 1,247m 500 Growth 1 year 5 year CAGR 3% 5% -60% -18% -21% 3% 23% 11% -23% 10% 6% 5% Total Other UK Pre-production Other international income International sales of UK finished programmes UK rights income % 3% Primary UK commissions Source: Pact Independent Production Sector Financial Census and Survey Note: Other international income refers to revenue from companies overseas operations and any primary commissions received from non-uk broadcasters; International sales of UK finished programmes : sales of first-run UK programming sold as finished product abroad; UK rights income : UK secondary sales, publishing, formats, DVD sales etc. There was a change in reporting methodology of some of the sampled companies in To help reflect the market Pact have used reported average year-on-year growth figures to forecast international sales on a like-for-like basis from the previous year. Forecast sales for 2015 were 347m for other international income and 34m for international sales of UK finished programmes in 2015, both of which are represented by the lighter shade in the above chart.

23 55 Figure 2.23 Relative share of spend on first-run originated content by genre, inhouse vs. external producers: 2010 and 2015 Total spend on first-run originations ( m) ,500 2,463 44% 47% 37% 50% 22% 25% 47% 48% 69% 57% 72% 74% 64% 67% 37% 36% 9% 8% 42% 48% 56% 53% 63% 50% 78% 75% 53% 52% 31% 43% 28% 26% 36% 33% 100% 100% 63% 64% 91% 92% 58% 52% Arts & Classical Music Childrens News & Current Affairs Drama & Soaps Education Entertainment & Comedy Internal External Factual Feature Films Religion & Ethics Source: Ofcom/broadcasters. Note: Figures are expressed in nominal terms. Includes spend by the main five PSB channels and BBC portfolio channels on first-run originated content broadcast, all day, and excludes nations /regions output. Sports Grand Total 23

24 24 Figure 2.24 Total and first-run UK originated hours of output on the PSB channels: 2015 Proportion of hours 100% 80% 60% 40% 86,769 43,050 11,643 32,717 11,076 12,661 Total hours YOY Change First-run UK originations -2% -1% 0% -5% Programmes for nations and regions BBC portfolio channels 20% 42,409 19,313 0% 1% Main five PSB channels (network) 0% Total Hours Total first-run UK originated hours Source: Ofcom/broadcasters. Note: ITV Breakfast is included within the figures for the main five channels. Regional hours exclude Welsh and Gaelic-language programming but include a small amount of Irish-language programmes.

25 25 Figure 2.25 Hours of first-run UK originated output on the five main PSB channels hours 35,000 30,000 30,041 30,681 30,052 30,049 30,406 30,389 Growth 1 year 5 year CAGR 0% 0% Total 25,000 20,000 11,060 11,647 11,002 11,232 11,199 11,076-1% 0% Nations & Regions 15,000 10,000 13,316 13,338 13,365 13,137 13,463 13,494 0% 0% Non-peak time (network) 5, ,665 5,696 5,685 5,680 5,744 5, % 1% Peak time (network) Source: Ofcom/broadcasters. Note: Figures include ITV breakfast and a small amount of Irish-language programmes but do not include the BBC s portfolio channels, BBC Alba or S4C.

26 26 Figure 2.26 Total and first-run originated/acquired hours of output in the multichannel sector: 2015 Proportion of hours 100% 80% 60% 40% 20% 1,725, , , , , ,270 32, , ,089 20,902 3,717 76,226 50,894 5, ,739 57,803 Proportion of hours that were first-run 7% 1% 30% 48% 2% 1% 5% Music Movies Sport News Leisure Children's Factual 0% Total Hours First-run hours 12% Entertainment Source: Ofcom/broadcasters. Note: Broadcast hours exclude Sky Box Office and barker channels which promote TV content. First-run hours include first-run in-house, commissioned and acquired content.

27 27 Figure 2.27 Summary of retail offerings from traditional pay-tv providers Source: Providers websites. Subscriber numbers are from Enders Analysis, with Sky figures including Now TV, Republic of Ireland and business overseas.

28 28 Figure 2.28 Summary of Sky Sports and BT Sport availability from pay-tv providers BT TV (YouView) Sky (DSat) TalkTalk YouView Virgin Media Other Sky Sports 1&2 (no HD) Sky Sports 3, 4, 5 & F1 NOW TV (Sky Sports passes) BT Sport Pack (all BT Sport channels) BT Sport Lite (BT Sport 1 only) (no HD) EE TV (BT retails) (BT retails) (BT retails) Source: Providers websites.

29 29 Figure 2.29 Launch dates of Local TV services 31/03: London Live 02/06: STV Glasgow 23/09: SLTV (Sheffield) 12/11: Made in Tyne and Wear (Newcastle) 15/10: Made in Cardiff 04/12: Bay TV Liverpool 12/01: STV Edinburgh 31/05: That s Manchester 18/08: Cambridge Presents 26/11: Estuary TV (Grimsby) 2014 Latest TV /03: Mustard TV (Norwich) 27/05: Notts TV (Nottingham) 28/08: (Brighton) 29/09: Northern Visions (Belfast) 08/10: Made in Bristol 06/11: Made in Leeds 28/02: Big Centre TV (Birmingham) 26/11: That s Solent (Southampton) 17/04: That s Oxfordshire 24/08: That s Lancashire (Preston) /07: Bay TV Swansea Source: Ofcom

30 30 Figure 2.30 Income and expenditure information for local TV services broadcasting in 2015 ms Proportion of funding (%) 11% 5% 2% Advertising BBC Income Income Expenditure 29% 53% Noncommercial income Other commercial income Teleshopping Source: Ofcom/broadcasters. Includes services which launched in 2015.

31 31 Figure 2.31 Hours of first-run local programming on local TV services: 2015 hours News & Current Affairs Other local programming 5,000 4,615 4,000 3,000 2,000 1, ,732 1,807 1, , , ,082 2,078 2,191 2,138 1,433 1,433 1,541 1,441 2, ,176 1,408 2, , ,565 2, ,906 1, ,494 1,121 Source: Ofcom/broadcasters. Figures calculated on the basis of the hours that were required in 2015 according to the licence, with the addition of the average weekly over-delivery reported by the service in its local return. * indicates channels that launched during 2015.

32 32 Figure 2.32 Platform availability of local TV services broadcasting in 2015 Channel Virgin Media Sky Internet DTT London Live Made in Leeds STV Glasgow Made in Tyne and Wear (New castle) STV Edinburgh Made in Cardiff Channel Virgin Media Sky Internet DTT Estuary TV (Grimsby) SLTV (Sheffield) Mustard TV (Norw ich) Northern Visions (Belfast) Latest TV (Brighton) Cambridge Presents Made in Bristol Notts TV (Nottingham) Big Centre TV That s Manchester That s Solent (Southampton) That s Oxford Bay TV Liverpool That s Lancashire (Preston) Source: Ofcom/broadcasters. indicates availability on platform.

33 33 Figure 2.33 Average weekly three-minute reach (000s) of local TV stations: April 2015 April 2016 BARB Households (000s) 2,500 All platforms DTT 2,000 Average across the period: 1,516 1,500 1,000 Average across the period: /04/ /04/ /04/ /05/2016 Source: BARB, all homes. Based on viewing through the reception mode of DTT and all platforms (DTT, DSAT, DCAB and Other). Full weeks are used for the correct calculation of weekly averages.

34 Figure 2.34 Platform take-up: TV households (m) % 39.4% 45.3% 52.9% 61.8% 69.4% 77.3% 84.3% 88.2% 91.5% 94.4% 95.5% 94.7% 92.9% 95.4% Analogue Terrestrial Only IPTV digital terrestrial only Digital Terrestrial only Digital cable Free to view digital satellite Pay digital satellite Analogue cable Multichannel take-up/tv homes* (% all households Source: BARB Establishment Survey. Household level data based on all TV sets in home therefore there may be platform overlaps. Data points are based on Q4 of each year. Notes: From Q BARB changed its methodology and its definition of a TV set-ow ning household. The main change w as that up to Q a home w as defined as a TV home if it ow ned a TV set w hich had been used to w atch TV programmes in the last six months. Since Q the claimed usage element w as removed, w hich led to an increase in the TV set homes population. BARB did not re-state the TV homes population before the methodology change, so comparisons w ith previous data should be made w ith caution. *Digital sw itchover w as completed across the UK in October Data from 2013 therefore refers to TV households as a % of all households. Digital terrestrial TV = digital TV through an aerial (this could include Freeview, BT TV/ TalkTalk/ YouView ) and not through DSAT/DCAB or other platforms. IPTV digital terrestrial only = receives digital terrestrial TV through any of BT TV/ TalkTalk/ YouView (but may have Freeview integrated TV) and not DSAT/DCAB/other platforms. 34

35 Figure 2.35 Platform demographics by age, socio-economic group and viewing hours 100% 80% 60% 40% 20% 0% % platform profile AB C1 C2 DE 13% 20% 16% 25% 34% 31% 22% 20% 31% 32% 36% 22% 23% 24% 18% 30% 35% 27% 25% 27% 28% 41% 33% 24% 14% 27% 26% 28% 28% 12% 14% 15% Average minutes per day Source: Platform profile: Ofcom Technology Tracker H Average minutes: BARB 2015 data. 35

36 36 Figure 2.36 Take-up of HDTV sets and HD services, smart TVs and DVRs % of UK homes with a TV 100% % 60% 75% 75% 76% 74% 50% 53% 57% 59% 53% 61% 63% 64% 40% 20% 12% 21% 28% 0% Have HD ready TV Have HDTV service Have smart TV Total DVR take-up Source: Ofcom Technology Tracker, data as at Q1 2014, then H Base: All adults aged 16+ w ith a TV in the household: 2013 (3661), 2014 (3635), 2015 (3616), 2016 (3606) QH53: Is the main TV in your household an HDTV set or HD ready? / QH54: Although you have an HDTV-ready set, to actually w atch TV channels and programmes that are broadcast in high definition, you need an HD set-top box or a TV w ith built-in HDTV receiver. For the main TV set, does your household have an HDTV service - f rom either Sky, Virgin Media, Freesat or Freeview? QH62: Are any of your TV sets 'smart TVs'? QR1A: Does your household have Sky+? / QR1B: Does your household have Virgin TiVo (pronounced tee-vo) or V+? / QR1C/D/E: Does your Freesat/ Freeview box of Freeview TV/ broadband TV service allow you to record and store TV programmes, and also pause and rew ind live TV programmes?

37 Figure 2.37 Activities undertaken on a connected TV, by age Respondents (%) 80 All ANY OF THESE Broadcaster catch-up services Clips through websites (FB, YouTube) Free VOD content through TV service Browse online Online subscription services (Netflix, Amazon etc) Paid VOD content through TV (PPV) Source: Ofcom Media Tracker Base: All respondents in 2015 (2,107); aged (620), (675), (344), 65+ (468). Q7/ Q9C/ Q10C/ Q11C/ Q13 - And which, if any of these devices have been connected to your home broadband service as well as a TV set in the home in the last 12 months to view something on the TV screen? Q14A-H/ Q15 Which, if any, of these activities have you used your device for in the last 12 months when connected to a TV? 37

38 38 Figure 2.38 Average weekly reach and average daily minutes total broadcast TV: Average daily minutes Average daily minutes and average weekly reach% % 92.2% 92.6% 92.4% 92.9% 93.1% 94.1% 94.0% 93.4% 92.4% Average daily minutes Average weekly reach, % % mins -11mins -4mins -4% -5% -2% 100% 80% 60% 40% 20% Average weekly reach, % % Source: BARB, individuals 4+, network, total TV. Reach criterion= 15 consecutive minutes of viewing at least once in the average week. Full weeks used for the correct calculation of averages. Note: New BARB panel introduced 1 Jan As a result pre- and post-panel change data must be treated with caution (see dotted line).

39 39 Figure 2.39 Change in average minutes per day of TV viewing, by age group: Audience Change Change % change % change Adults minute +2 minutes -0.3% +0.5% Adults minutes -2 minutes -3.4% -0.6% Adults minutes -5 minutes -4.4% -2.2% Individuals minutes -4 minutes -4.9% -1.9% Adults minutes -5 minutes -8.0% -2.4% Adults minutes -7 minutes -8.8% -4.2% Adults minutes -15 minutes -6.2% -10.5% Children minutes -6 minutes -12.4% -5.4% Source: BARB.

40 40 Figure 2.40 Average minutes of viewing per day, by activity: total TV Average minutes per day Live Time-shifted total daily viewing Time-shifted Live viewing Source: BARB, individuals 4+, network, total TV. Average minutes of viewing per day. Chart figures may not add up due to rounding. Note: New BARB panel introduced 1 Jan As a result pre- and post-panel change data must be treated with caution (see dotted line).chart figures may not add up due to rounding.

41 41 Figure 2.41 Viewing by genre across all channels: Total hours per person per year ,203 1,215 1,219 1,177 1,127 1,108 Total hours Entertainment Documentaries Source: BARB, individuals 4+, network programming based on 4+ area filter, total TV. Total hours of viewing per year. Note: There have been large increases in total viewing hours to the other: new programme genre over the last few years. Programmes that fall into other genres may be coded as other: new programme. News Hobbies and Leisure Cinema films Sport Other UK drama Children's Other drama UK soaps Current Affairs Comedy All other genres

42 42 Figure 2.42 Average daily minutes of TV screen time, total TV: by activity type: Average minutes per day Total TV screen time mins min mins Unmatched* Time-shifted: 8-28 days Time-shifted: up to 7 days Live viewing BARB Gold Standard Source: BARB, individuals 4+. Average minutes of viewing/day. *Note: Unmatched = TV in use but content cannot be audio-matched or otherwise identified. Includes gaming, viewing to DVDs/box sets/archives, SVoD, time-shifted viewing beyond 28 days, apps on smart TVs and navigation around EPG guides where there is no in-picture broadcast content. Chart figures may not add up due to rounding. The majority of unreported viewing time came from the TV set or games consoles.

43 43 Figure 2.43 Unmatched viewing on the TV set, by device used: January-May 2016 Proportion of unmatched daily viewing minutes TV (integrated tuner and apps) Games consoles Individuals 34 minutes 26% 27% 8% 6% 6% 5% 4% 4% 4% 3% 7% TiVo Unknown device Sky PVR Internet set-top-box YouView Adults % 45% 5% 3% 4% 3% 3% 1% 2% 2% 3% DTR PVR 50 minutes Blu-Ray/DVD/DVDR/VCR PCTV (online through the TV set) 0% 20% 40% 60% 80% 100% All other devices Source: BARB. Unmatched viewing by device use, based on average daily minutes of viewing. 01/01/2016 to 31/05/2016 (34 mins for individuals and 50 mins for Adults 16-24).

44 44 Figure 2.44 Average daily minutes to total TV, by age group: Average minutes per day Adults 65+ Adults Adults Individuals Adults Adults Adults Children Source: BARB, Network, total TV. Average minutes of viewing per person per day. New BARB panel introduced 1 Jan As a result, pre- and post-panel change data must be compared with caution (see dotted line).

45 45 Figure Average weekly reach of total broadcast TV, by age group, Individuals 4+ Children (4-15) Adults Adults Source: BARB, total TV. Reach criteria: 15 consecutive minutes, full weeks used. Adults Adults Adults Adults % 90% 84% 92% 94% 95% 96% 96% % 89% 83% 92% 94% 94% 95% 96% % 91% 83% 92% 94% 95% 96% 96% % 90% 82% 91% 94% 95% 96% 96% % 91% 83% 92% 94% 96% 96% 96% % 90% 85% 91% 95% 96% 96% 97% % 92% 87% 93% 95% 96% 97% 97% % 92% 86% 93% 95% 96% 97% 97% % 91% 85% 92% 94% 96% 97% 97% % 88% 83% 90% 94% 95% 96% 97% % 87% 82% 89% 93% 95% 96% 97%

46 46 Figure 2.46 Average weekly TV reach in all homes, by channel: minute consecutive weekly reach - full weeks 100% 80% 60% 40% 20% 0% 89.5% 88.6% 88.5% 88.2% 88.1% 88.4% 89.0% 88.2% 86.7% 84.0% 85.2% 80.3% 86.1% 78.6% 78.3% 77.8% 78.6% 79.0% 77.3% 77.8% 73.7% 75.5% 73.6% 71.0% 70.0% 72.5% 69.1% 68.0% 68.0% 59.6% 57.0% 57.9% 57.9% 66.7% 63.8% 62.7% 62.5% 60.6% 55.9% 55.2% 60.2% 58.8% 56.7% 54.6% 57.5% 51.8% 56.9% 54.1% 53.3% 53.3% 49.9% 48.1% 50.6% 47.1% 48.0% 45.5% 44.8% 43.8% 41.8% 41.1% 39.5% 39.6% 40.3% 40.3% 39.0% 36.9% 35.9% 34.7% BBC One BBC Two ITV Channel 4 (incl S4C to 2009) Channel 5 Main five PSB channels Others Source: BARB, all individuals (4+), Network. Note: A new BARB panel was introduced in As a result, pre- and post-panel change data must be compared with caution. Note: Following digital switchover in Wales in 2010 S4C ceased to carry Channel 4 content. S4C is therefore included in the Channel 4 figure in and prior to 2009 but not from 2010 onwards. S4C weekly reach in 2015 was 0.5% (all homes). The main five PSB channels include viewing to their HD channel variants but exclude viewing to their +1 channels.

47 47 Figure 2.47 Channel shares in all homes: 1988 to Main five PSB channels total (%) 100% 80% 60% 40% 20% 0% Channel share 9.0% 8.0% 9.0% 10.0% 42.0% 42.0% 44.0% 43.0% 11.0% 11.0% 10.0% 11.0% 38.0% 39.0% 37.0% 36.0% 34.0% 11.0% 41.0% 10.0% 33.0% 10.0% 40.0% 11.0% 32.0% 11.0% 40.0% 11.0% 32.0% 11.0% 37.0% 11.0% 33.0% 12.0% 35.0% 11.0% 2.0% 4.0% 5.0% 6.0% 11.0% 10.0% 10.0% 11.0% 33.0% 32.0% 31.0% 29.0% 12.0% 11.0% 11.0% 11.0% 31.0% 29.0% 28.0% 27.0% 10.0% 2.9% 10.0% 3.6% 4.5% 6.0% 6.3% 6.5% 6.6% 9.6% 9.7% 27.0% 24.1% 23.7% 22.8% 11.0% 11.4% 11.0% 10.0% 27.0% 26.2% 25.6% 24.7% 6.9% 6.4% 5.7% 5.1% 9.7% 9.3% 9.8% 12.0% 8.6% 21.5% 19.6% 19.2% 9.4% 8.8% 8.5% 23.3% 22.8% 22.0% 14.3% 15.8% 5.0% 4.9% 4.5% 4.4% 4.2% 4.1% 4.0% 3.9% 7.5% 6.8% 18.4% 17.8% 18.0% 20.2% 6.2% 5.9% 5.6% 21.3% 21.4% 20.7% 4.9% 17.0% 16.0% 14.9% 15.3% 7.8% 7.5% 6.9% 6.6% 6.1% 5.8% 4.8% 14.7% 20.2% 4.8% 14.2% 6.1% 5.7% 21.8% 20.9% 20.8% 20.7% 21.3% 21.0% 21.7% 21.9% All other channels PSB portfolios Channel 5 Channel 4 ITV BBC Two BBC One Source: BARB, TAM JICTAR and Ofcom estimates, individuals (4+) Notes: a new BARB panel was introduced in 2002 and 2010, as a result, pre- and post-panel change data must be compared with caution (see dotted line) ; following digital switchover in Wales in 2010 S4C ceased to carry Channel 4 content, S4C is therefore included in the Channel 4 figure in and prior to 2009 but not from 2010 onwards; the main five PSB channels include viewing to their HD channel variants but exclude viewing to their +1 channels.

48 Figure 2.48 Age and socio-economic audience profile of the 20 most viewed 100 channels: 2015 Higher % ABC Lower % 35+ CBeebies E Sky1 BBC Three Channel 4 Dave ITV2 Channel Sky Sports 1 50 Film4 30 ITV BBC One BBC Two More4 ITV4 5 USA BBC Four BBC News Drama ITV3 Higher % Lower % ABC1 Source: BARB/InfoSys+/TRP Research. Individuals 4+. Based on the top 20 channels ranked by share, excluding individually reported +1 channels. Profile based on age: % 35+, SEG: % ABC1 individuals. Axes cross at the average age/seg profile of Total TV. Includes HD variants, where applicable

49 49 Figure 2.49 DVR take-up and time-shifted viewing: all individuals and individuals in DVR homes: % 80% 60% 40% 37% 48% 61% 65% 69% 73% 74% DVR owners as % of population Time-shifted viewing among DVR individuals 20% 0% 11% 15% 24% 15% 15% 14% 15% 16% 16% 17% 18% 3% 4% 6% 7% 9% 10% 11% 12% 13% Time-shifted viewing among all individuals Source: BARB, Network. New BARB panel introduced 1 Jan As a result pre and post panel change data must be treated with caution (see dotted line).

50 50 Figure 2.50 Proportion of all AV viewing: live TV, DVR and VoD: Live Recorded VoD Awaiting update 92% 7% 2% % 8% 2% % 9% 3% % 10% 4% % 10% 6% % 10% 7% 0% 20% 40% 60% 80% 100% Proportion of viewing minutes across all devices Source: 3 Reasons estimates (including BARB data). Base: All devices, long-form professional audio-visual content, Live includes simulcast. Excludes physical consumption (e.g. DVDs), and short-form

51 51 Figure 2.51 Opinion on the quality of programmes over the past 12 months (% of adults with a TV) Don't know Stayed the same Improved Got worse ABC1 C2DE Source: Ofcom Media Tracker, Q20 - Do you feel that over the past year television programmes have improved, got worse or stayed about the same? Base: All with any TV sets in 2015 (2,052); aged (589); (666); (335); 65+ (462); ABC1 (1,055); C2DE (993). Significance testing shows any difference between any age group and all adults and any difference between socio-economic groups.

52 Figure 2.52 Top reasons given for programmes having improved or got worse Source: Ofcom Media Tracker, Q21 - In what ways do you think that the television programmes have improved over the past year? Q22 - In what ways do you think that the television programmes have got worse over the past year? Base: All saying programmes improved over past year (320); (130); 35+ (190); All saying programmes got worse over past year (646); (139); 35+ (507) Unprompted, multicode.. 52

53 Figure 2.53 Opinion on the amount of sex, violence and swearing on TV among viewers Don't know Too little An acceptable amount Too much Sex Violence Swearing Source: Ofcom Media Tracker, Q46 - Do you think, in general, that there is too much, too little or an acceptable amount of each of the following on television: a) sex? b) violence? c) swearing? Base: All with any TV sets (2,052). Prompted, single code. 53

54 54 Figure 2.2 Industry metrics UK television industry Total broadcast TV industry revenue 11.8bn 12.4bn 12.5bn 12.8bn 13.2bn 13.6bn Proportion of revenue which is BBC income allocated to TV 22% 21% 21% 20% 21% 19% Proportion of revenue generated by advertising 30% 29% 28% 29% 29% 30% Proportion of revenue generated by subscriptions 43% 44% 44% 46% 45% 45% Total online TV industry revenue 180m 238m 379m 574m 795m 976m Broadcaster share of total display advertising spend 43% 43% 43% 43% 43% 43% Spend on originated output by main five PSB channels 2.5bn 2.5bn 2.6bn 2.5bn 2.6bn 2.6bn Spend on network content by UK broadcasters 5.4bn 5.5bn 5.6bn 5.8bn 6.4bn 6.5bn Digital TV homes (proportion of all households) 92% 94% 96% 95% 93% 95% Traditional pay-tv subscriptions 14.4m 14.7m 15.0m 16.0m 17.1m 17.9m Weekly reach of broadcast TV (proportion of people 4+) 93% 94% 94% 93% 92% 92% Minutes spent watching TV per day (per person aged 4+) Share of the main five PSB channels in all homes 55% 54% 52% 51% 51% 51% Source: Ofcom/broadcasters/IHS/Advertising Association/Warc/BARB/GfK. Note: Expressed in nominal terms. BBC income allocated to TV includes the proportion of the licence fee that goes to S4C. Broadcaster share as a proportion of total display advertising spend excludes direct mail and classified ads and is based on Advertising Association/Warc Expenditure VoD usage Report. (proportion The AA/Warc data of adults are net of 15+) discounts, and include agency commission, 27% but excludes 43% production costs. 38% Spend on 51% originations includes 57% spend on 59% nations and regions programming (not Welsh or Gaelic language programmes but some Irish language). Traditional pay-tv subscriptions are from Sky, Virgin TalkTalk and BT and are provided by Enders Analysis. Sky figures include Now TV, ROI and overseas business subscriptions. TV view ing based on BARB analysis of view ing to scheduled TV programmes on TV sets up to seven days after first broadcast. After DSO in October 2012, all homes w ere required to have digital TV. From 2013, data refers to the proportion of UK homes that had a w orking TV set as defined in BARB s Establishment Survey. Data refers to Q4 of each year. BARB changed the methodology for defining a TV set home from Q and data comparisons to previous years should be treated w ith caution. VoD usage figures provided by Kantar Media TGI.