• Veronica Speiser

Research Roundup April 2022

Updated: Jun 21

Public Service Broadcasting set for a shake-up, UK’s TV Market Past, Present and Future, plus ISP, government, and Ofcom updates


UK public service broadcasters (PSBs) and linear television set viewing remain a popular outlet for many viewers, but for how long? On 28 April, DCMS announced its Policy Paper - Up next - the government’s vision for the broadcasting sector which will usher in the modernisation of the public service broadcasting market. DCMS’ proposed legislative reforms aim to bring PSBs firmly into the 21st century competitive landscape, whilst ensuring that internationally recognised British productions remain a dominant player in a saturated marketplace and attractive investment opportunity.


In March 2022, Point Topic and Netgem commissioned YouGov to conduct a survey on video, ISPs and what channels people were watching. The survey revealed that the digital TV landscape has shifted significantly toward online channels, but the market is congested with choice and can result in a fragmented experience for the user. Streamlining of services will result in a changing landscape for the streaming giants, as consumers seek out curated services available via their ISPs. Whereas a wide range of choice was considered a selling point in recent years, consolidation of affordable content services will be the step-change in the marketplace in the near future.


Key findings and overviews can be found below and on our free analysis section with detailed reports available via our UK Plus subscribers service, sign-in here to access our UK Plus content.


The UK’s Television Market Past, Present and Future

Point Topic and Netgem commissioned YouGov to conduct a survey on video, ISPs and what channels people were watching. The report, published on 9 May, shows that the results paint a picture of a market in the process of fragmenting itself once more after a period of slow, stable transition from analogue aerial only delivery, via a couple of dominant online channels and providers to today’s picture, a crazy paving of subscriptions (paid and free), channels, providers and choices, choices, choices.


Key findings


• Unsurprisingly aerial ownership is on the wane with already less than 50% of respondents in London and Scotland owning an aerial • YouTube tops the charts as the most regularly viewed streaming channel amongst survey participants • Netflix still leads the SVOD market, but showing signs of decreasing its dominance as it loses a record number of subscribers and clamps down on password sharing • Consumers want choice, but they also want a consolidation of services; just over a third (33%) of respondents would change their broadband provider if they offered a bundled curated TV package • Consolidation of affordable content services will be the step-change in the marketplace in the near future.


TV Past

Delivery today is all digital, increasingly online and available on the go.

We asked survey participants, Do you own an aerial? The responses can be viewed regionally as per Figure 1 below.

Figure 1:  Regional Aerial Ownership
Figure 1: Regional Aerial Ownership

Results indicated that there were some regions (London and Scotland) already with less than 50% knowing they currently have an aerial to watch TV. This has been slipping for a few years, according to other sources , and now with a majority abandoning the long-established delivery mechanisms the traditional, linear, model with tens of millions watching event TV on a weekly basis is disappearing.


TV Present

Viewers can now view an incredible amount of content across various digital platforms. However, having more methods of access, such as Smart TV, tablet, laptop or mobile device does not necessarily equate to ease of access to content.

If you want to watch the main terrestrial channels (publicly funded or ad supported) online you need to register and sign-in to multiple platforms, sometimes just once, but still a barrier.

Survey participants were asked, Thinking specifically about how you use your TV set or monitor to watch video content...Which, if any, of the following streaming devices/services do you ever use? (Please select all that apply).


Content consumers accessing streaming services use a variety of methods (Figure 2), however nearly a quarter of respondents (23%) do so directly from their Smart TV. The TV still dominates the living room in the UK and vendors are slowly improving interfaces as well, although that can be a major challenge.


Figure 2: Usage of streaming device or OTT service to view video content
Figure 2: Usage of streaming device or OTT service to view video content

Bundled broadband and TV packages take-up

Just over a third of participants (34.8%) that do take a bundled service are opting for the larger players. For example, of those participants who have a bundled subscription service, 72.2% of them are using Sky as compared with 56% subscribing to Virgin Media. However, this is not the case for BT’s over the top service, where only 26% are subscribing to a BT TV and broadband package.


Talk Talk came in with an 18% share followed by NOW with 17.6%.


Channels and Streaming Services Viewing Today

We asked survey participants, Approximately how often, if at all, do you watch each of the following channels / streaming platforms?

Respondents had several options in terms of the frequency in which they viewed content we are looking at the number of participants who watched a service more than once a week or more


Figure 3: Channels or streaming service viewed once a week or more by age
Figure 3: Channels or streaming service viewed once a week or more by age

TV Future

In the UK, the adoption of TV and video streaming services has steadily been on the rise in recent years and saw an unprecedented rise in adoption levels during the COVID-19 pandemic. Despite viewers spending less overall time watching TV since national lockdowns have eased, they have not lost their drift to viewing content via online streaming services.

With the diversity, choice, and fragmentation of online streaming services available to UK consumers the future of these services as standalone products will start to slowly lose their appeal. As HBO found out in the 80’s your subscribers can churn away quickly.

Given that a large proportion of UK households subscribe to at least one SVOD service (e.g. Netflix, Prime Video, Disney+) whilst also accessing catch-up BVOD (iPlayer, ITV Hub) content (87% of all respondents asked), users personal TV habits are beginning to focus on a handful of services that cater to their needs.


The savvier and more wallet conscious UK TV consumer is likely to subscribe to a service that is more fit for purpose and curated by an Internet service provider, such as Sky who for several years have been market leaders in providing an all-in-one curated service for broadband and TV consumers.


With streamlining of operations, exclusive channel partnership agreements and slick marketing campaigns Sky has succeeded in providing a one-stop shop for subscribers who want to avoid the fragmentation and costliness of individual stand-alone subscription services. Considering this trend for the future, the winners in the UK TV market will be the ones that offer consumers a curated choice at an affordable price and a convenient way of accessing the content.


Bearing this in mind, we looked at survey respondents’ propensity to switch providers and asked, Please imagine that a broadband provider were to offer all/most of the video channels you would like to watch as a bundled subscription, with one bill covering all of the services and devices you use. How likely or unlikely would you be to change your existing broadband provider to receive the above bundle?


As we’ve seen a third of respondents would be likely to change ISPs if they offered a more bespoke service that appealed to their viewing habits (33%) of which a quarter of participants stated that they would be somewhat likely (25%). Eight per cent stated they would be very likely to change, and the same proportion said they are currently signed up to a bundled broadband and TV service of their choice.


When looking at this topic by region (Figure 4), consumers in the North East (41%), South East (36%), Scotland (35%) and the North West (34%) would be most likely to switch if the right service was offered in their area. Worth noting is that Scotland (15%) and both the North East (15%) and North West (19%) are among the regions whose TV viewers never use their TV aerials to view video content.

Figure 4: Regional propensity to switch ISPs for bundled curated TV and broadband service
Figure 4: Regional propensity to switch ISPs for bundled curated TV and broadband service

Conversely, survey participants in the East of England had the largest proportion respondents who would also be unlikely to switch (50%), followed by Yorkshire & the Humber (48%) and Wales (48%). The latter two regions have the largest percentage of participants who use their TV aerials every day, coming in at 54.2% and 56.2%, respectively.


Survey results regional ISP market shares unweighted and weighted by footprint

There are some significant regional variations in market share from the survey data. While this is in part due to the relative coverage of those areas by different ISPs, we cannot ignore the potential of actual local variations in which ISP is adopted. Perhaps they have marketed particularly well, or they offer services that appeal to a locally dominant demographic.

Care should be taken reviewing or using these outputs. We hope to repeat this survey later in 2022 which will result in additional data for better analysis.


Figure 5 shows the regional market shares for BT, Sky, Virgin Media O2 (VMO2), Plusnet, TalkTalk, EE and Vodafone. Both BT and VMO2 have the largest market share in five of the twelve regions (excluding England as nine of the regions comprise England as a whole). This is likely due to the size of their footprints along with the faster speed packages available.

Figure 5: Regional market shares for ISPs – weighted survey data
Figure 5: Regional market shares for ISPs – weighted survey data

Conclusion

The digital TV landscape has shifted significantly toward a fragmented congested place for the consumer. Streamlining of services will result in a changing landscape for the streaming giants, as consumers seek out curated services available via their ISPs.

  • More consumers using more online channels – we expect to see this increase in our next survey round expected Q4 2022

  • More users getting their video via IP and putting more traffic through their ISPs – but the OTT picture is changing

  • More and more the giants like Netflix are signing deals with ISPs to offer their services in a bundle…which it turns out many consumers like

  • The power is shifting. Where once the ISPs were just the passive vehicles for video now, they are increasingly the gatekeepers and even profit makers using content to attract subscribers and curated bundles to keep them.

For further details head to our Free Analysis section.


News

News Round Up

BT Group News

Virgin Media O2 (VMO2) News

CityFibre (CF) News

Independent Operators (AltNets) News


Other key news items throughout the month can be found below.


[1] ITS Technology Group citing data source: ‘Ordinance Survey OS Open UPRN’ data set.

 

The data used in this report is taken from Point Topic’s UK Plus service that allows customers to receive comprehensive, accurate and regularly updated broadband market information to support strategic decision making.​


Please telephone +44 (0)20 3301 3303 or e-mail isabelle.anderson@point-topic.com for more details.

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