Talktalk Shows Signs of Recovery As Sky Leads Paid TV Innovation

Press release Rebecca Daley / Alyona Levitin Camargue +44 (0)20 7636 7366 [email protected]

26 January 2017

TalkTalk shows signs of recovery as Sky leads paid TV innovation

The latest figures from Kantar Worldpanel ComTech on the home services market – covering broadband, fixed landline and paid television – hint at a long-awaited recovery for TalkTalk. Despite losing 14% of its customers during 2016 after its cyber security shortcomings, TalkTalk’s share of new acquisitions rose by 1.5 percentage points in the final quarter.

Ossian Robertson, consumer insight director at Kantar Worldpanel, explains: “Things are really looking up for TalkTalk. TalkTalk’s guaranteed price freeze for new broadband customers on 24 month contracts was a clever move, and is likely to pay off particularly well in light of recent price hikes from both Sky and BT. Customers are tightening their belts after the festive season and as memories of last year’s hacking scandal fade, TalkTalk has a great opportunity to firmly re-establish its value credentials at the expense of rivals.”

“Smaller providers saw a bleaker end to 2016, as their collective share dipped by 3.0 percentage points. As usual the bigger networks took full advantage of the Christmas period to send a strong message on value, in many cases drowning out the selling points of smaller providers. Already boasting a strong football package to tempt sports fans, BT’s “biggest ever sale” on broadband and TV saw the provider targeting those consumers for whom football rights are not a major draw. Successfully expanding its customer base, BT managed to increase its share year on year to account for 30.0% of new acquisitions in the final quarter.”

Sky’s 1.4 percentage point increase in market share was driven primarily by paid TV – Sky Q boxes saw a rapid increase in uptake towards the end of the year. Sky Cinema’s half price introductory discount likely added to the provider’s appeal for home entertainment enthusiasts: in fact 39% of new Sky TV subscribers this quarter chose Sky due to a promotional offer. The provider is already taking steps to build on this success, announcing today that by 2018 its Sky Q service will also be available to stream via broadband for those without a satellite dish.

Ossian Robertson, consumer insight director at Kantar Worldpanel, continues: “Although Virgin made much of its Black Friday performance it was actually the only major provider to see its share of new acquisitions drop overall. Sky was poised to pick up the slack – Sky TV benefited considerably from subscribers leaving Virgin’s television service. In response, Virgin will be hoping that its new V6 TV box can shake off the issues which dogged TiVo and go some way towards replicating the success of Sky Q. Virgin’s broadband network expansion also has an important part to play – a successful TV service relies on a fast fibre connection, and as Virgin broadband reaches more of the UK its potential TV audience expands too.” Press release Rebecca Daley / Alyona Levitin Camargue +44 (0)20 7636 7366 [email protected]

“Not to be left behind, BT has also announced improvements to its BT TV interface as it looks to enhance its user experience. The network is also tapping into the content zeitgeist with more of a focus on presenting a selection of viewers’ favourite shows via the BT Player function. Now that the likes of Netflix and Amazon Prime are firm favourites with the British public – one in five of us paid for a subscription video service in December 2016, and many also watch without paying – paid TV providers are beginning to catch on to the fact that an improved offer is necessary to justify their higher prices.”

Kantar Worldpan el ComTech GB Market share of new acquisitions, %

3 m/e 31-Dec-15 3 m/e 31-Dec-16 Percentage Point Change Sales Share %

BT 28.6 30.0 1.4 TalkTalk 9.0 10.5 1.5 Virgin Media 11.1 9.8 -1.3 Sky* 28.3 29.7 1.4 Other 23.0 20.0 -3.0

*Excludes Now TV

For all publicly-quoted Worldpanel data, users of our research (including media) must ensure that data is sourced Kantar Worldpanel . ‘Kantar’ refers to a different company in the WPP group.

About Kantar Worldpanel ComTech’s home services provider market share data Kantar Worldpanel ComTech’s home services provider data provides the most up-to-date market share figures based on sales for providers within home services. This information is based on Kantar Worldpanel ComTech’s GB consumer panel, the largest continuous consumer research / mobile phone and home services tracking Press release Rebecca Daley / Alyona Levitin Camargue +44 (0)20 7636 7366 [email protected] panel of its kind in Britain. This surveys mobile phone and home services behaviour of 15,000 demographically representative consumers each month. All consumer data in this release excludes enterprise sales.

For further information, please contact:

Rebecca Daley / Alyona Levitin Camargue +44 (0) 20 7636 7366 [email protected] / [email protected]

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Kantar is the data investment management arm of WPP and one of the world's largest insight, information and consultancy groups. By uniting the diverse talents of its 12 specialist companies, the group is the pre-eminent provider of compelling data and inspirational insights for the global business community. Its 30,000 employees work across 100 countries and across the whole spectrum of research and consultancy disciplines, enabling the group to offer clients business insights at every point of the consumer cycle. The group’s services are employed by over half of the Fortune Top 500 companies.

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