THE DYNAMICS OF THE UK TV MARKET Latest consumer and business trends 24th October 2017 ATON IK ATON IK D I GITA L D I GITA L

Nathalie Lethbridge [email protected] atonikdigital.com

2 Television and audio-visual content ofcom.org.uk

CommunicationsATON IK Market Report 2017AT O- UnitedN IK Kingdom 2 Television and audio-visual content D I GITA L D I GITA L

^ƉĞŶĚŽŶh<ͲŽƌŝŐŝŶĂƚĞĚƉƌŽŐƌĂŵŵŝŶŐďLJƚŚĞŵĂŝŶĮǀĞW^ĐŚĂŶŶĞůƐǁĂƐĂƚŝƚƐŚŝŐŚĞƐƚůĞǀĞů DĂŶLJƉĞŽƉůĞƐƵďƐĐƌŝďĞƚŽŵŽƌĞƚŚĂŶŽŶĞŽŶͲĚĞŵĂŶĚͬƐƚƌĞĂŵŝŶŐƐĞƌǀŝĐĞƐŝŶĐĞϮϬϭϮ

KǀĞƌĂůůƐƉĞŶĚŽŶĮƌƐƚͲƌƵŶh<Ͳ ^ƉĞŶĚŽŶƉĞĂŬƟŵĞƉƌŽŐƌĂŵŵŝŶŐ ŽƌŝŐŝŶĂůƐƉŽƌƚƐĐŽŶƚĞŶƚŝŶĚĂLJƟŵĞ LJƚŚĞĞŶĚŽĨϮϬϭϲ͕ĨŽƵƌŝŶƚĞŶ ŵŽƐƚƉŽƉƵůĂƌĐŽŵďŝŶĂƟŽŶǁĂƐ ŝŐŚƚƉĞƌĐĞŶƚŽĨĂůůƵƐĞƌƐŽĨEĞƞůŝdž͕ŽƌŝŐŝŶĂƚĞĚƉƌŽŐƌĂŵŵŝŶŐ;ŝŶĐůƵĚŝŶŐ ĂŶĚŶĂƟŽŶƐ͛ĂŶĚƌĞŐŝŽŶƐ͛ ĂŶĚůĂƚĞŶŝŐŚƚǁŚĞŶĐŽǀĞƌŝŶŐƚŚĞ ƵƐĞƌƐŽĨEĞƞůŝdž͕ŵĂnjŽŶWƌŝŵĞ EĞƞůŝdžĂŶĚŵĂnjŽŶWƌŝŵĞ͕ǁŝƚŚ ŵĂnjŽŶWƌŝŵĞĂŶĚEKtdsŚĂĚŶĂƟŽŶƐ͛ĂŶĚƌĞŐŝŽŶƐ͛ƉƌŽŐƌĂŵŵŝŶŐͿ ƉƌŽŐƌĂŵŵŝŶŐǁĂƐďƌŽĂĚůLJƐƚĂďůĞ͕ ϮϬϭϲh&ƵƌŽƉĞĂŶ&ŽŽƚďĂůů ĂŶĚEKtdsŚĂĚĂĐĐĞƐƐƚŽŵŽƌĞ ϮϲйŽĨƵƐĞƌƐƵƐŝŶŐďŽƚŚƐĞƌǀŝĐĞƐ ĂĐĐĞƐƐƚŽĂůůƚŚƌĞĞƐĞƌǀŝĐĞƐŝŶƚŚĞďLJƚŚĞŵĂŝŶĮǀĞW^ĐŚĂŶŶĞůƐʹ ǁŚŝůĞƐƉĞŶĚŽŶůĂƚĞͲŶŝŐŚƚĂŶĚ ŚĂŵƉŝŽŶƐŚŝƉƐĂŶĚƚŚĞZŝŽ KŶĞ͕dǁŽ͕/ds;ŝŶĐůƵĚŝŶŐ ĚĂLJƟŵĞƉƌŽŐƌĂŵŵŝŶŐŐƌĞǁďLJ KůLJŵƉŝĐĂŶĚWĂƌĂůLJŵƉŝĐ'ĂŵĞƐ͘ ƚŚĂŶŽŶĞŽĨƚŚĞƐĞƐĞƌǀŝĐĞƐ͘dŚĞ ŝŶƚŚĞĮŶĂůƋƵĂƌƚĞƌŽĨϮϬϭϲ͘ ĮŶĂůƚŚƌĞĞŵŽŶƚŚƐŽĨϮϬϭϲ͘/dsƌĞĂŬĨĂƐƚͿͬ^dsͬhds͕ŚĂŶŶĞůϰ ϯϭйĂŶĚϰйƌĞƐƉĞĐƟǀĞůLJŝŶƌĞĂů KǀĞƌůĂƉďĞƚǁĞĞŶƐƵďƐĐƌŝďĞƌƐŽĨĂŶĚŚĂŶŶĞůϱʹŝŶĐƌĞĂƐĞĚďLJϰй ƚĞƌŵƐ͘dŚŝƐŵĂLJďĞĚƵĞŝŶƉĂƌƚƚŽ ƚŚĞŵĂŝŶƚĞůĞǀŝƐŝŽŶƐƵďƐĐƌŝƉƟŽŶŝŶƌĞĂůƚĞƌŵƐƚŽάϮ͕ϳϬϴŵŝŶϮϬϭϲ͘ ďƌŽĂĚĐĂƐƚĞƌƐŝŶĐƌĞĂƐŝŶŐƐƉĞŶĚŽŶ &ŝŐƵƌĞϮ͘ϰ͗^ƵďƐĐƌŝƉƟŽŶŽŶͲĚĞŵĂŶĚĂŶĚƐƚƌĞĂŵŝŶŐƐĞƌǀŝĐĞƐŽǀĞƌůĂƉ services in the UK &ŝŐƵƌĞϮ͘ϭϴ͗^ƉĞŶĚŽŶĮƌƐƚͲƌƵŶh<ŽƌŝŐŝŶĂƚĞĚŽƵƚƉƵƚŽŶƚŚĞĮǀĞŵĂŝŶW^ĐŚĂŶŶĞůƐ

Growth 1 year 5 year £2,702m £2,712m £2,708m CAGR £2,610m £2,595m £2,506m Total Amazon £288m £279m £276m 4% 0% 36% £286m £272m 20% EĞƞůŝdž £269m £267m £269m £212m £277m Prime 26% £234m £245m 2% -0.9% Nat i ons & £607m £591m £562m £495m £553m £541m Regions 8% 31% 0.8% Late night 2% 4% 4% -1.5% Day t i me 4% £1,541m £1,574m £1,509m £1,526m £1,569m £1,592m Now TV 1% 0.7% Peak time 2011 2012 2013 2014 2015 2016 Source: 'Ĩ<^sŽdƌĂĐŬĞƌ͕YϰϮϬϭϲKĐƚŽďĞƌͲĞĐĞŵďĞƌϮϬϭϲ Source: KĨĐŽŵͬďƌŽĂĚĐĂƐƚĞƌƐ͘ Notes:tϭ͗ZĞĂƐŽŶƐĨŽƌƐŝŐŶŝŶŐƵƉĨŽƌͬƵƐŝŶŐƐĞƌǀŝĐĞ Note: &ŝŐƵƌĞƐĂƌĞĞdžƉƌĞƐƐĞĚŝŶƌĞĂůƚĞƌŵƐ;ϮϬϭϲƉƌŝĐĞƐͿ͘dŚĞLJŝŶĐůƵĚĞ/dsďƌĞĂŬĨĂƐƚ͕ƐƉĞŶĚŝŶŐŝŶƚŚĞŶĂƟŽŶƐĂŶĚƌĞŐŝŽŶƐŽŶŶŐůŝƐŚͲ Base:EĞƞůŝdžƵƐĞƌƐ;ŶсϭϲϳϬ;ϭϯϴƚƌŝĂůůŝƐƚƐͿͿ͕ŵĂnjŽŶWƌŝŵĞsŝĚĞŽƵƐĞƌƐ;ŶсϭϮϱϱ;ϭϱϲƚƌŝĂůůŝƐƚƐͿͿ͕EKtdsƵƐĞƌƐ;ŶсϰϮϯůĂŶŐƵĂŐĞƉƌŽŐƌĂŵŵŝŶŐ;ĂŶĚĂƐŵĂůůĂŵŽƵŶƚŽĨ/ƌŝƐŚͲůĂŶŐƵĂŐĞƉƌŽŐƌĂŵŵĞƐͿďƵƚĚŽŶŽƚŝŶĐůƵĚĞƚŚĞ͛ƐƉŽƌƞŽůŝŽĐŚĂŶŶĞůƐ͕ůďĂ ;ϴϬƚƌŝĂůůŝƐƚƐͿͿ Žƌ^ϰ͘ Note:hƐĞƌƐŝŶĐůƵĚĞƚŚŽƐĞǁŚŽĞŝƚŚĞƌƐƵďƐĐƌŝďĞƚŽŽƌĂƌĞƚƌŝĂůůŝŶŐĞĂĐŚƐĞƌǀŝĐĞĂŶĚƵƐĞŝƚĂƚůĞĂƐƚŽŶĐĞĂĨŽƌƚŶŝŐŚƚ͘ 58

58

58

58

58

58

58

58

41

41

41

41

41

41

41

41 1 United Kingdom’s communications market Communications Market Report 2017 - United Kingdom

1.4.2 The services people use

KŶͲĚĞŵĂŶĚĂŶĚƐƚƌĞĂŵŝŶŐĂƌĞďĞĐŽŵŝŶŐŵŽƌĞŵĂŝŶƐƚƌĞĂŵ 2 tŚŝůĞϵϭйŽĨh<ĂĚƵůƚƐǁĂƚĐŚĞĚ ĂĚƵůƚ;ϭϲнͿƉĞƌĚĂLJŝŶϮϬϭϲϮ͘ ĂĚƵůƚƐĐŝƟŶŐƚŚŝƐ͕ĨŽůůŽǁĞĚďLJ/ds ůŝǀĞdsŝŶĂŶĂǀĞƌĂŐĞǁĞĞŬŝŶ ,Ƶď;ϰϬйͿĂŶĚzŽƵdƵďĞ;ϯϴйͿ͘ Strong decrease of live TV tŚĞŶƌĞƐƉŽŶĚĞŶƚƐƚŽŽƵƌϮϬϭϳ ϮϬϭϲϭ͕ĚĂƚĂĨƌŽŵZƐŚŽǁƚŚĂƚ ůŵŽƐƚĂƚŚŝƌĚ;ϯϭйͿƐĂŝĚƚŚĞLJƵƐĞĚ viewing with youngest survey were asked what services ƚŚĞĂŵŽƵŶƚŽĨƟŵĞh<ĂĚƵůƚƐ EĞƞůŝdžĨŽƌǁĂƚĐŚŝŶŐƉƌŽŐƌĂŵŵĞƐ 1 United Kingdom’s communications marketŽƚŚĞƌƚŚĂŶůŝǀĞďƌŽĂĚĐĂƐƚdsƚŚĞLJCommunications Market Report 2017 - United Kingdom 66% of ƐƉĞŶĚǁĂƚĐŚŝŶŐŚĂƐĨĂůůĞŶƐŝŶĐĞ ĂŶĚĮůŵƐĨŽůůŽǁĞĚďLJůůϰ;ϮϲйͿ demographics. ƵƐĞĚƚŽǁĂƚĐŚdsƉƌŽŐƌĂŵŵĞƐĂŶĚ ϮϬϭϬ͕ǁŝƚŚĂĚĞĐůŝŶĞŝŶĂǀĞƌĂŐĞ ĂŶĚŵĂnjŽŶWƌŝŵĞ;ϮϬйͿ͕DLJϱ 94% of UK TV HH teens use Youtube to ĮůŵƐ͕ŝWůĂLJĞƌǁĂƐƚŚĞŵŽƐƚ ĚĂŝůLJǀŝĞǁŝŶŐƟŵĞŽĨϯϲŵŝŶƵƚĞƐ ;ϭϴйͿĂŶĚ&ĂĐĞŬ;ϭϲйͿ͕ǁŝƚŚ ƉŽƉƵůĂƌĐŚŽŝĐĞ͕ǁŝƚŚϲϯйŽĨh< own a digital TV watch TV programmes and ;ͲϭϰйͿƚŽϯŚŽƵƌƐϱϭŵŝŶƵƚĞƐƉĞƌ ĂůůŽƚŚĞƌƐĞƌǀŝĐĞƐďĞůŽǁϭϱй͘ movies vs 38% of all 1.4.2 The services people use Communications Market Report 2017 - United Kingdom 1 1 UnitedUnited Kingdom’s Kingdom’s communications communications&ŝŐƵƌĞϭ͘ϲ͗dŚĞƉƌŽƉŽƌƟŽŶŽĨĂĚƵůƚƐǁŚŽƵƐĞĚŝīĞƌĞŶƚƐĞƌǀŝĐĞƐĨŽƌǁĂƚĐŚŝŶŐdsƉƌŽŐƌĂŵŵĞƐͬĮůŵƐ;йͿ market market Communications Market Report 2017 - United Kingdom adults 1 United Kingdom’s communications market Communications Market Report 2017 - United Kingdom KŶͲĚĞŵĂŶĚĂŶĚƐƚƌĞĂŵŝŶŐĂƌĞďĞĐŽŵŝŶŐŵŽƌĞŵĂŝŶƐƚƌĞĂŵ 3.51 average daily 63% 40% 38% 31% 28% tŚŝůĞϵϭйŽĨh<ĂĚƵůƚƐǁĂƚĐŚĞĚ ĂĚƵůƚ;ϭϲнͿƉĞƌĚĂLJŝŶϮϬϭϲϮ͘ ĂĚƵůƚƐĐŝƟŶŐƚŚŝƐ͕ĨŽůůŽǁĞĚďLJ/ds ůŝǀĞdsŝŶĂŶĂǀĞƌĂŐĞǁĞĞŬŝŶ ,Ƶď;ϰϬйͿĂŶĚzŽƵdƵďĞ;ϯϴйͿ͘ minutes for live 1.4.2 The services people use tŚĞŶƌĞƐƉŽŶĚĞŶƚƐƚŽŽƵƌϮϬϭϳ TV 1.4.2 The servicesϮϬϭϲϭ͕ĚĂƚĂĨƌŽŵZƐŚŽǁƚŚĂƚ people use ůŵŽƐƚĂƚŚŝƌĚ;ϯϭйͿƐĂŝĚƚŚĞLJƵƐĞĚ 1.4.2 The services people use survey were asked what services ZĞĐŽƌĚĞĚds broadcast TV viewing ƚŚĞĂŵŽƵŶƚŽĨƟŵĞh<ĂĚƵůƚƐ EĞƞůŝdžĨŽƌǁĂƚĐŚŝŶŐƉƌŽŐƌĂŵŵĞƐ ŽƚŚĞƌƚŚĂŶůŝǀĞďƌŽĂĚĐĂƐƚdsƚŚĞLJ KŶͲĚĞŵĂŶĚĂŶĚƐƚƌĞĂŵŝŶŐĂƌĞďĞĐŽŵŝŶŐŵŽƌĞŵĂŝŶƐƚƌĞĂŵƐƉĞŶĚǁĂƚĐŚŝŶŐŚĂƐĨĂůůĞŶƐŝŶĐĞ ĂŶĚĮůŵƐĨŽůůŽǁĞĚďLJůůϰ;ϮϲйͿ per adult per day in KŶͲĚĞŵĂŶĚĂŶĚƐƚƌĞĂŵŝŶŐĂƌĞďĞĐŽŵŝŶŐŵŽƌĞŵĂŝŶƐƚƌĞĂŵƵƐĞĚƚŽǁĂƚĐŚdsƉƌŽŐƌĂŵŵĞƐĂŶĚ 91% of UK TV HH view KŶͲĚĞŵĂŶĚĂŶĚƐƚƌĞĂŵŝŶŐĂƌĞďĞĐŽŵŝŶŐŵŽƌĞŵĂŝŶƐƚƌĞĂŵϮϬϭϬ͕ǁŝƚŚĂĚĞĐůŝŶĞŝŶĂǀĞƌĂŐĞ ĂŶĚŵĂnjŽŶWƌŝŵĞ;ϮϬйͿ͕DLJϱ ĮůŵƐ͕ŝWůĂLJĞƌǁĂƐƚŚĞŵŽƐƚϮ tŚŝůĞϵϭйŽĨh<ĂĚƵůƚƐǁĂƚĐŚĞĚtŚŝůĞϵϭйŽĨh<ĂĚƵůƚƐǁĂƚĐŚĞĚĚĂŝůLJǀŝĞǁŝŶŐƟŵĞŽĨϯϲŵŝŶƵƚĞƐ26% ĂĚƵůƚ;ϭϲнͿƉĞƌĚĂLJŝŶϮϬϭϲĂĚƵůƚ;ϭϲнͿƉĞƌĚĂLJŝŶϮϬϭϲ20% Ϯ͘ ͘ 18%ĂĚƵůƚƐĐŝƟŶŐƚŚŝƐ͕ĨŽůůŽǁĞĚďLJ/dsĂĚƵůƚƐĐŝƟŶŐƚŚŝƐ͕ĨŽůůŽǁĞĚďLJ/ds16%;ϭϴйͿĂŶĚ&ĂĐĞŬ;ϭϲйͿ͕ǁŝƚŚ12% 2016 tŚŝůĞϵϭйŽĨh<ĂĚƵůƚƐǁĂƚĐŚĞĚůŝǀĞdsŝŶĂŶĂǀĞƌĂŐĞǁĞĞŬŝŶĂĚƵůƚ;ϭϲнͿƉĞƌĚĂLJŝŶϮϬϭϲϮ͘ ĂĚƵůƚƐĐŝƟŶŐƚŚŝƐ͕ĨŽůůŽǁĞĚďLJ/dsƉŽƉƵůĂƌĐŚŽŝĐĞ͕ǁŝƚŚϲϯйŽĨh<,Ƶď;ϰϬйͿĂŶĚzŽƵdƵďĞ;ϯϴйͿ͘ live TV in an average Widening gap ůŝǀĞdsŝŶĂŶĂǀĞƌĂŐĞǁĞĞŬŝŶ;ͲϭϰйͿƚŽϯŚŽƵƌƐϱϭŵŝŶƵƚĞƐƉĞƌtŚĞŶƌĞƐƉŽŶĚĞŶƚƐƚŽŽƵƌϮϬϭϳ ,Ƶď;ϰϬйͿĂŶĚzŽƵdƵďĞ;ϯϴйͿ͘ĂůůŽƚŚĞƌƐĞƌǀŝĐĞƐďĞůŽǁϭϱй͘ ϭ tŚĞŶƌĞƐƉŽŶĚĞŶƚƐƚŽŽƵƌϮϬϭϳ ůŝǀĞdsŝŶĂŶĂǀĞƌĂŐĞǁĞĞŬŝŶϮϬϭϲϭ ͕ĚĂƚĂĨƌŽŵZƐŚŽǁƚŚĂƚ ,Ƶď;ϰϬйͿĂŶĚzŽƵdƵďĞ;ϯϴйͿ͘ůŵŽƐƚĂƚŚŝƌĚ;ϯϭйͿƐĂŝĚƚŚĞLJƵƐĞĚ ϮϬϭϲ ͕ĚĂƚĂĨƌŽŵZƐŚŽǁƚŚĂƚtŚĞŶƌĞƐƉŽŶĚĞŶƚƐƚŽŽƵƌϮϬϭϳsurvey were asked what services ůŵŽƐƚĂƚŚŝƌĚ;ϯϭйͿƐĂŝĚƚŚĞLJƵƐĞĚ week - 13% decline in ϮϬϭϲϭ͕ĚĂƚĂĨƌŽŵZƐŚŽǁƚŚĂƚƚŚĞĂŵŽƵŶƚŽĨƟŵĞh<ĂĚƵůƚƐ survey were askedůŵŽƐƚĂƚŚŝƌĚ;ϯϭйͿƐĂŝĚƚŚĞLJƵƐĞĚ what services EĞƞůŝdžĨŽƌǁĂƚĐŚŝŶŐƉƌŽŐƌĂŵŵĞƐ between viewing ƚŚĞĂŵŽƵŶƚŽĨƟŵĞh<ĂĚƵůƚƐsurvey were&ŝŐƵƌĞϭ͘ϲ͗ asked dŚĞƉƌŽƉŽƌƟŽŶŽĨĂĚƵůƚƐǁŚŽƵƐĞĚŝīĞƌĞŶƚƐĞƌǀŝĐĞƐĨŽƌǁĂƚĐŚŝŶŐdsƉƌŽŐƌĂŵŵĞƐͬĮůŵƐ;йͿwhat servicesŽƚŚĞƌƚŚĂŶůŝǀĞďƌŽĂĚĐĂƐƚdsƚŚĞLJ EĞƞůŝdžĨŽƌǁĂƚĐŚŝŶŐƉƌŽŐƌĂŵŵĞƐ ƚŚĞĂŵŽƵŶƚŽĨƟŵĞh<ĂĚƵůƚƐƐƉĞŶĚǁĂƚĐŚŝŶŐŚĂƐĨĂůůĞŶƐŝŶĐĞ ŽƚŚĞƌƚŚĂŶůŝǀĞďƌŽĂĚĐĂƐƚdsƚŚĞLJEĞƞůŝdžĨŽƌǁĂƚĐŚŝŶŐƉƌŽŐƌĂŵŵĞƐĂŶĚĮůŵƐĨŽůůŽǁĞĚďLJůůϰ;ϮϲйͿ daily viewing time ƐƉĞŶĚǁĂƚĐŚŝŶŐŚĂƐĨĂůůĞŶƐŝŶĐĞŽƚŚĞƌƚŚĂŶůŝǀĞďƌŽĂĚĐĂƐƚdsƚŚĞLJƵƐĞĚƚŽǁĂƚĐŚdsƉƌŽŐƌĂŵŵĞƐĂŶĚ ĂŶĚĮůŵƐĨŽůůŽǁĞĚďLJůůϰ;ϮϲйͿ habits of youngest ƐƉĞŶĚǁĂƚĐŚŝŶŐŚĂƐĨĂůůĞŶƐŝŶĐĞϮϬϭϬ͕ǁŝƚŚĂĚĞĐůŝŶĞŝŶĂǀĞƌĂŐĞ ƵƐĞĚƚŽǁĂƚĐŚdsƉƌŽŐƌĂŵŵĞƐĂŶĚĂŶĚĮůŵƐĨŽůůŽǁĞĚďLJůůϰ;ϮϲйͿĂŶĚŵĂnjŽŶWƌŝŵĞ;ϮϬйͿ͕DLJϱ ϮϬϭϬ͕ǁŝƚŚĂĚĞĐůŝŶĞŝŶĂǀĞƌĂŐĞƵƐĞĚƚŽǁĂƚĐŚdsƉƌŽŐƌĂŵŵĞƐĂŶĚĮůŵƐ͕ŝWůĂLJĞƌǁĂƐƚŚĞŵŽƐƚ ĂŶĚŵĂnjŽŶWƌŝŵĞ;ϮϬйͿ͕DLJϱ ϮϬϭϬ͕ǁŝƚŚĂĚĞĐůŝŶĞŝŶĂǀĞƌĂŐĞĚĂŝůLJǀŝĞǁŝŶŐƟŵĞŽĨϯϲŵŝŶƵƚĞƐ63% ĮůŵƐ͕ŝWůĂLJĞƌǁĂƐƚŚĞŵŽƐƚ40%ĂŶĚŵĂnjŽŶWƌŝŵĞ;ϮϬйͿ͕DLJϱ38% ;ϭϴйͿĂŶĚ&ĂĐĞŬ;ϭϲйͿ͕ǁŝƚŚ31% 28% since 2010, 1% in past ĚĂŝůLJǀŝĞǁŝŶŐƟŵĞŽĨϯϲŵŝŶƵƚĞƐĮůŵƐ͕ŝWůĂLJĞƌǁĂƐƚŚĞŵŽƐƚƉŽƉƵůĂƌĐŚŽŝĐĞ͕ǁŝƚŚϲϯйŽĨh< ;ϭϴйͿĂŶĚ&ĂĐĞŬ;ϭϲйͿ͕ǁŝƚŚ and oldest audience ĚĂŝůLJǀŝĞǁŝŶŐƟŵĞŽĨϯϲŵŝŶƵƚĞƐ;ͲϭϰйͿƚŽϯŚŽƵƌƐϱϭŵŝŶƵƚĞƐƉĞƌ ƉŽƉƵůĂƌĐŚŽŝĐĞ͕ǁŝƚŚϲϯйŽĨh<;ϭϴйͿĂŶĚ&ĂĐĞŬ;ϭϲйͿ͕ǁŝƚŚĂůůŽƚŚĞƌƐĞƌǀŝĐĞƐďĞůŽǁϭϱй͘ ;ͲϭϰйͿƚŽϯŚŽƵƌƐϱϭŵŝŶƵƚĞƐƉĞƌƉŽƉƵůĂƌĐŚŽŝĐĞ͕ǁŝƚŚϲϯйŽĨh< ĂůůŽƚŚĞƌƐĞƌǀŝĐĞƐďĞůŽǁϭϱй͘ year alone (33% for ;ͲϭϰйͿƚŽϯŚŽƵƌƐϱϭŵŝŶƵƚĞƐƉĞƌ tŚĞŶǁĞŐƌŽƵƉƚŚĞƐĞƚŽŐĞƚŚĞƌŝŶƚŽĂůůŽƚŚĞƌƐĞƌǀŝĐĞƐďĞůŽǁϭϱй͘,Ƶď͕DLJϱͿƵƐĞĚďLJϲϳйŽĨĂĚƵůƚƐ sŝƌŐŝŶDĞĚŝĂ;ϮϯйͿ͘ĚƵůƚƐĂŐĞĚϭϲͲTV &ŝŐƵƌĞϭ͘ϲ͗dŚĞƉƌŽƉŽƌƟŽŶŽĨĂĚƵůƚƐǁŚŽƵƐĞĚŝīĞƌĞŶƚƐĞƌǀŝĐĞƐĨŽƌǁĂƚĐŚŝŶŐdsƉƌŽŐƌĂŵŵĞƐͬĮůŵƐ;йͿtypes of services, we can see that ĐŽŵďŝŶĞĚ͕ĨŽůůŽǁĞĚďLJƐƵďƐĐƌŝƉƟŽŶ ϮϰĂƌĞŵŽƐƚůŝŬĞůLJƚŽƵƐĞŵŽƐƚƚLJƉĞƐ &ŝŐƵƌĞϭ͘ϲ͗dŚĞƉƌŽƉŽƌƟŽŶŽĨĂĚƵůƚƐǁŚŽƵƐĞĚŝīĞƌĞŶƚƐĞƌǀŝĐĞƐĨŽƌǁĂƚĐŚŝŶŐdsƉƌŽŐƌĂŵŵĞƐͬĮůŵƐ;йͿ ZĞĐŽƌĚĞĚds 16-24, 6% in past year &ŝŐƵƌĞϭ͘ϲ͗dŚĞƉƌŽƉŽƌƟŽŶŽĨĂĚƵůƚƐǁŚŽƵƐĞĚŝīĞƌĞŶƚƐĞƌǀŝĐĞƐĨŽƌǁĂƚĐŚŝŶŐdsƉƌŽŐƌĂŵŵĞƐͬĮůŵƐ;йͿƚŚĞŵŽƐƚƉŽƉƵůĂƌŽŶͲĚĞŵĂŶĚĂŶĚ ŽŶͲĚĞŵĂŶĚĂŶĚƐƚƌĞĂŵŝŶŐƐĞƌǀŝĐĞƐ ŽĨƐĞƌǀŝĐĞƐ͕ŝŶĐůƵĚŝŶŐƚŚƌĞĞͲƋƵĂƌƚĞƌƐ ƐƚƌĞĂŵŝŶŐƐĞƌǀŝĐĞƐĨŽƌǁĂƚĐŚŝŶŐ ƐƵĐŚĂƐŵĂnjŽŶWƌŝŵĞĂŶĚEĞƞůŝdž ǁŚŽƐĂLJƚŚĞLJƵƐĞƐƵďƐĐƌŝƉƟŽŶ 73% of 18-24 63% 40% 38% 31% 28% alone) 63% ƉƌŽŐƌĂŵŵĞƐĂŶĚĮůŵƐĂƌĞƚŚĞ40% 38% ;ϰϱйͿ͕ƐŽĐŝĂůŵĞĚŝĂƉůĂƞŽƌŵƐƐƵĐŚ31% 28% ŽŶͲĚĞŵĂŶĚĂŶĚƐƚƌĞĂŵŝŶŐƐĞƌǀŝĐĞƐ 63% 40% 38% 31% 28% year olds watch ƉƵďůŝĐƐĞƌǀŝĐĞďƌŽĂĚĐĂƐƚĞƌƐ͛ŽŶůŝŶĞ26% 20% ĂƐ&ĂĐĞŬĂŶĚzŽƵdƵďĞ;ϰϭйͿĂŶĚ18% 16% ;ϳϲйͿĂŶĚďƌŽĂĚĐĂƐƚĞƌŽŶͲĚĞŵĂŶĚ12% ƐĞƌǀŝĐĞƐ;ŝWůĂLJĞƌ͕ůůϰ͕/ds ƉĂLJdsƐĞƌǀŝĐĞƐƐƵĐŚĂƐ^ŬLJdsĂŶĚ TVTVĂŶĚƐƚƌĞĂŵŝŶŐƐĞƌǀŝĐĞƐ;ϳϱйͿ͘ online video TV ZĞĐŽƌĚĞĚdsZĞĐŽƌĚĞĚds daily 13 ZĞĐŽƌĚĞĚds 13 26%26% 20%20% 18%18% 16%16% 12%12% 26% 20% 13 18% 16% 12% tŚĞŶǁĞŐƌŽƵƉƚŚĞƐĞƚŽŐĞƚŚĞƌŝŶƚŽ ,Ƶď͕DLJϱͿƵƐĞĚďLJϲϳйŽĨĂĚƵůƚƐ sŝƌŐŝŶDĞĚŝĂ;ϮϯйͿ͘ĚƵůƚƐĂŐĞĚϭϲͲ 13 types of services, we can see that ĐŽŵďŝŶĞĚ͕ĨŽůůŽǁĞĚďLJƐƵďƐĐƌŝƉƟŽŶ ϮϰĂƌĞŵŽƐƚůŝŬĞůLJƚŽƵƐĞŵŽƐƚƚLJƉĞƐ ƚŚĞŵŽƐƚƉŽƉƵůĂƌŽŶͲĚĞŵĂŶĚĂŶĚ ŽŶͲĚĞŵĂŶĚĂŶĚƐƚƌĞĂŵŝŶŐƐĞƌǀŝĐĞƐ ŽĨƐĞƌǀŝĐĞƐ͕ŝŶĐůƵĚŝŶŐƚŚƌĞĞͲƋƵĂƌƚĞƌƐ 13 52% of adults enjoy the PROFILE OF UK TV CONSUMER 2017 ƐƚƌĞĂŵŝŶŐƐĞƌǀŝĐĞƐĨŽƌǁĂƚĐŚŝŶŐ ƐƵĐŚĂƐŵĂnjŽŶWƌŝŵĞĂŶĚEĞƞůŝdž ǁŚŽƐĂLJƚŚĞLJƵƐĞƐƵďƐĐƌŝƉƟŽŶ freedom of watching TV 13 ƉƌŽŐƌĂŵŵĞƐĂŶĚĮůŵƐĂƌĞƚŚĞ ;ϰϱйͿ͕ƐŽĐŝĂůŵĞĚŝĂƉůĂƞŽƌŵƐƐƵĐŚ ŽŶͲĚĞŵĂŶĚĂŶĚƐƚƌĞĂŵŝŶŐƐĞƌǀŝĐĞƐ ƉƵďůŝĐƐĞƌǀŝĐĞďƌŽĂĚĐĂƐƚĞƌƐ͛ŽŶůŝŶĞ ĂƐ&ĂĐĞŬĂŶĚzŽƵdƵďĞ;ϰϭйͿĂŶĚ ;ϳϲйͿĂŶĚďƌŽĂĚĐĂƐƚĞƌŽŶͲĚĞŵĂŶĚ anywhere tŚĞŶǁĞŐƌŽƵƉƚŚĞƐĞƚŽŐĞƚŚĞƌŝŶƚŽtŚĞŶǁĞŐƌŽƵƉƚŚĞƐĞƚŽŐĞƚŚĞƌŝŶƚŽ13 ƐĞƌǀŝĐĞƐ;ŝWůĂLJĞƌ͕ůůϰ͕/ds,Ƶď͕DLJϱͿƵƐĞĚďLJϲϳйŽĨĂĚƵůƚƐ,Ƶď͕DLJϱͿƵƐĞĚďLJϲϳйŽĨĂĚƵůƚƐƉĂLJdsƐĞƌǀŝĐĞƐƐƵĐŚĂƐ^ŬLJdsĂŶĚsŝƌŐŝŶDĞĚŝĂ;ϮϯйͿ͘ĚƵůƚƐĂŐĞĚϭϲͲsŝƌŐŝŶDĞĚŝĂ;ϮϯйͿ͘ĚƵůƚƐĂŐĞĚϭϲͲĂŶĚƐƚƌĞĂŵŝŶŐƐĞƌǀŝĐĞƐ;ϳϱйͿ͘ tŚĞŶǁĞŐƌŽƵƉƚŚĞƐĞƚŽŐĞƚŚĞƌŝŶƚŽtypestypes of ofservices, services,,Ƶď͕DLJϱͿƵƐĞĚďLJϲϳйŽĨĂĚƵůƚƐ we we can can seeϭŚƩƉƐ͗ͬͬǁǁǁ͘ŽĨĐŽŵ͘ŽƌŐ͘ƵŬͬƌĞƐĞĂƌĐŚͲĂŶĚͲĚĂƚĂͬŵƵůƟͲƐĞĐƚŽƌͲƌĞƐĞĂƌĐŚͬĚŝŐŝƚĂůͲĚĂLJ see that that ĐŽŵďŝŶĞĚ͕ĨŽůůŽǁĞĚďLJƐƵďƐĐƌŝƉƟŽŶĐŽŵďŝŶĞĚ͕ĨŽůůŽǁĞĚďLJƐƵďƐĐƌŝƉƟŽŶsŝƌŐŝŶDĞĚŝĂ;ϮϯйͿ͘ĚƵůƚƐĂŐĞĚϭϲͲϮϰĂƌĞŵŽƐƚůŝŬĞůLJƚŽƵƐĞŵŽƐƚƚLJƉĞƐϮϰĂƌĞŵŽƐƚůŝŬĞůLJƚŽƵƐĞŵŽƐƚƚLJƉĞƐ types of services, we can seeƚŚĞŵŽƐƚƉŽƉƵůĂƌŽŶͲĚĞŵĂŶĚĂŶĚ that 13ĐŽŵďŝŶĞĚ͕ĨŽůůŽǁĞĚďLJƐƵďƐĐƌŝƉƟŽŶϮĚƵůƚƐϭϲн͘ĂƐĞĚŽŶǀŝĞǁŝŶŐƚŽŶͲĚĞŵĂŶĚĂŶĚƐƚƌĞĂŵŝŶŐƐĞƌǀŝĐĞƐŽƐĐŚĞĚƵůĞĚ͕ďƌŽĂĚĐĂƐƚdsŽŶdsƐĞƚƐŝŶĐůƵĚŝŶŐůŝǀĞĂƚƚŚĞƟŵĞŽĨďƌŽĂĚĐĂƐƚƉůƵƐϮϰĂƌĞŵŽƐƚůŝŬĞůLJƚŽƵƐĞŵŽƐƚƚLJƉĞƐŽĨƐĞƌǀŝĐĞƐ͕ŝŶĐůƵĚŝŶŐƚŚƌĞĞͲƋƵĂƌƚĞƌƐ 2 Television and audio-visual content Communications Market Report 2017 - United Kingdom ƚŚĞŵŽƐƚƉŽƉƵůĂƌŽŶͲĚĞŵĂŶĚĂŶĚ13 ƟŵĞͲƐŚŝŌĞĚǀŝĞǁŝŶŐƚŚƌŽƵŐŚsZƐĂŶĚĐĂƚĐŚͲƵƉdsƵƉƚŽƐĞǀĞŶĚĂLJƐĂŌĞƌƚƌĂŶƐŵŝƐƐŝŽŶ͘ŽŶͲĚĞŵĂŶĚĂŶĚƐƚƌĞĂŵŝŶŐƐĞƌǀŝĐĞƐ ŽĨƐĞƌǀŝĐĞƐ͕ŝŶĐůƵĚŝŶŐƚŚƌĞĞͲƋƵĂƌƚĞƌƐ ATON IK ATON IK 7 out of 10 UK adults ATON IK ƚŚĞŵŽƐƚƉŽƉƵůĂƌŽŶͲĚĞŵĂŶĚĂŶĚATONƐƚƌĞĂŵŝŶŐƐĞƌǀŝĐĞƐĨŽƌǁĂƚĐŚŝŶŐƐƚƌĞĂŵŝŶŐƐĞƌǀŝĐĞƐĨŽƌǁĂƚĐŚŝŶŐIK ŽŶͲĚĞŵĂŶĚĂŶĚƐƚƌĞĂŵŝŶŐƐĞƌǀŝĐĞƐƐƵĐŚĂƐŵĂnjŽŶWƌŝŵĞĂŶĚEĞƞůŝdžƐƵĐŚĂƐŵĂnjŽŶWƌŝŵĞĂŶĚEĞƞůŝdžŽĨƐĞƌǀŝĐĞƐ͕ŝŶĐůƵĚŝŶŐƚŚƌĞĞͲƋƵĂƌƚĞƌƐǁŚŽƐĂLJƚŚĞLJƵƐĞƐƵďƐĐƌŝƉƟŽŶǁŚŽƐĂLJƚŚĞLJƵƐĞƐƵďƐĐƌŝƉƟŽŶ D I GITAL D I GITAL D I GITA L ƐƚƌĞĂŵŝŶŐƐĞƌǀŝĐĞƐĨŽƌǁĂƚĐŚŝŶŐD I GITƉƌŽŐƌĂŵŵĞƐĂŶĚĮůŵƐĂƌĞƚŚĞAƉƌŽŐƌĂŵŵĞƐĂŶĚĮůŵƐĂƌĞƚŚĞL 13 ƐƵĐŚĂƐŵĂnjŽŶWƌŝŵĞĂŶĚEĞƞůŝdž;ϰϱйͿ͕ƐŽĐŝĂůŵĞĚŝĂƉůĂƞŽƌŵƐƐƵĐŚ;ϰϱйͿ͕ƐŽĐŝĂůŵĞĚŝĂƉůĂƞŽƌŵƐƐƵĐŚǁŚŽƐĂLJƚŚĞLJƵƐĞƐƵďƐĐƌŝƉƟŽŶŽŶͲĚĞŵĂŶĚĂŶĚƐƚƌĞĂŵŝŶŐƐĞƌǀŝĐĞƐŽŶͲĚĞŵĂŶĚĂŶĚƐƚƌĞĂŵŝŶŐƐĞƌǀŝĐĞƐ watch TV programmes ƉƌŽŐƌĂŵŵĞƐĂŶĚĮůŵƐĂƌĞƚŚĞƉƵďůŝĐƐĞƌǀŝĐĞďƌŽĂĚĐĂƐƚĞƌƐ͛ŽŶůŝŶĞƉƵďůŝĐƐĞƌǀŝĐĞďƌŽĂĚĐĂƐƚĞƌƐ͛ŽŶůŝŶĞ;ϰϱйͿ͕ƐŽĐŝĂůŵĞĚŝĂƉůĂƞŽƌŵƐƐƵĐŚĂƐ&ĂĐĞŬĂŶĚzŽƵdƵďĞ;ϰϭйͿĂŶĚĂƐ&ĂĐĞŬĂŶĚzŽƵdƵďĞ;ϰϭйͿĂŶĚŽŶͲĚĞŵĂŶĚĂŶĚƐƚƌĞĂŵŝŶŐƐĞƌǀŝĐĞƐ;ϳϲйͿĂŶĚďƌŽĂĚĐĂƐƚĞƌŽŶͲĚĞŵĂŶĚ;ϳϲйͿĂŶĚďƌŽĂĚĐĂƐƚĞƌŽŶͲĚĞŵĂŶĚ ƉƵďůŝĐƐĞƌǀŝĐĞďƌŽĂĚĐĂƐƚĞƌƐ͛ŽŶůŝŶĞƐĞƌǀŝĐĞƐ;ŝWůĂLJĞƌ͕ůůϰ͕/dsƐĞƌǀŝĐĞƐ;ŝWůĂLJĞƌ͕ůůϰ͕/ds13 ĂƐ&ĂĐĞŬĂŶĚzŽƵdƵďĞ;ϰϭйͿĂŶĚƉĂLJdsƐĞƌǀŝĐĞƐƐƵĐŚĂƐ^ŬLJdsĂŶĚƉĂLJdsƐĞƌǀŝĐĞƐƐƵĐŚĂƐ^ŬLJdsĂŶĚ;ϳϲйͿĂŶĚďƌŽĂĚĐĂƐƚĞƌŽŶͲĚĞŵĂŶĚĂŶĚƐƚƌĞĂŵŝŶŐƐĞƌǀŝĐĞƐ;ϳϱйͿ͘ĂŶĚƐƚƌĞĂŵŝŶŐƐĞƌǀŝĐĞƐ;ϳϱйͿ͘ or films on demand with ƐĞƌǀŝĐĞƐ;ŝWůĂLJĞƌ͕ůůϰ͕/ds ƉĂLJdsƐĞƌǀŝĐĞƐƐƵĐŚĂƐ^ŬLJdsĂŶĚ ĂŶĚƐƚƌĞĂŵŝŶŐƐĞƌǀŝĐĞƐ;ϳϱйͿ͘ 13 35% bingewatching 1313 13 13 weekly 2.2.3 Spend on UK television programmes 1313 13 13 1313 13 13 1313 ϭŚƩƉƐ͗ͬͬǁǁǁ͘ŽĨĐŽŵ͘ŽƌŐ͘ƵŬͬƌĞƐĞĂƌĐŚͲĂŶĚͲĚĂƚĂͬŵƵůƟͲƐĞĐƚŽƌͲƌĞƐĞĂƌĐŚͬĚŝŐŝƚĂůͲĚĂLJ ƌŽĂĚĐĂƐƚĞƌƐƐƉĞŶƚάϳ͘ϯďŶŽŶŶĞƚǁŽƌŬƉƌŽŐƌĂŵŵŝŶŐŝŶϮϬϭϲ 13 13 ϮĚƵůƚƐϭϲн͘ĂƐĞĚŽŶǀŝĞǁŝŶŐƚŽƐĐŚĞĚƵůĞĚ͕ďƌŽĂĚĐĂƐƚdsŽŶdsƐĞƚƐŝŶĐůƵĚŝŶŐůŝǀĞĂƚƚŚĞƟŵĞŽĨďƌŽĂĚĐĂƐƚƉůƵƐ 1313 ƟŵĞͲƐŚŝŌĞĚǀŝĞǁŝŶŐƚŚƌŽƵŐŚsZƐĂŶĚĐĂƚĐŚͲƵƉdsƵƉƚŽƐĞǀĞŶĚĂLJƐĂŌĞƌƚƌĂŶƐŵŝƐƐŝŽŶ͘ 13 ϭ Ϯ 2 Television and audio-visual content Spendofcom.org.uk in key genres ďLJĐŚĂŶŶĞůƐ ƉƌŽŐƌĂŵŵŝŶŐ͕ƵƉĨƌŽŵϯϲйŝŶϮϬϭϱ͘ ŚĂǀĞďĞĞŶĮƌƐƚƐŚŽǁŶŽŶ 1313 13 ATON IK ATON IK ďƌŽĂĚĐĂƐƟŶŐŝŶƚŚĞh<ǁĂƐάϳ͘ϯďŶ dŚƌĞĞ͖ƐƉĞŶĚŝƐŶŽǁƌĞĐŽƌĚĞĚATON IK AT1313 ON IK dŚĞƉŽƌƞŽůŝŽĐŚĂŶŶĞůƐƌĞƉŽƌƚĞĚ 13 ϭŚƩƉƐ͗ͬͬǁǁǁ͘ŽĨĐŽŵ͘ŽƌŐ͘ƵŬͬƌĞƐĞĂƌĐŚͲĂŶĚͲĚĂƚĂͬŵƵůƟͲƐĞĐƚŽƌͲƌĞƐĞĂƌĐŚͬĚŝŐŝƚĂůͲĚĂLJ 2 Television and audio-visual content Communications Market Report 2017 - United Kingdom ϭŚƩƉƐ͗ͬͬǁǁǁ͘ŽĨĐŽŵ͘ŽƌŐ͘ƵŬͬƌĞƐĞĂƌĐŚͲĂŶĚͲĚĂƚĂͬŵƵůƟͲƐĞĐƚŽƌͲƌĞƐĞĂƌĐŚͬĚŝŐŝƚĂůͲĚĂLJ D I GITAL D I GITAL D I GITA L D I GITAϮ L ŝŶϮϬϭϲ͕ĂŶŝŶĐƌĞĂƐĞŽĨϭϭйLJĞĂƌ ĂŐĂŝŶƐƚƚŚĞĐŚĂŶŶĞůŽŶǁŚŝĐŚ ϭ 13 Ϯ ĚƵůƚƐϭϲн͘ĂƐĞĚŽŶǀŝĞǁŝŶŐƚŽƐĐŚĞĚƵůĞĚ͕ďƌŽĂĚĐĂƐƚdsŽŶdsƐĞƚƐŝŶĐůƵĚŝŶŐůŝǀĞĂƚƚŚĞƟŵĞŽĨďƌŽĂĚĐĂƐƚƉůƵƐ ŚƩƉƐ͗ͬͬǁǁǁ͘ŽĨĐŽŵ͘ŽƌŐ͘ƵŬͬƌĞƐĞĂƌĐŚͲĂŶĚͲĚĂƚĂͬŵƵůƟͲƐĞĐƚŽƌͲƌĞƐĞĂƌĐŚͬĚŝŐŝƚĂůͲĚĂLJ13 ĚƵůƚƐϭϲн͘ĂƐĞĚŽŶǀŝĞǁŝŶŐƚƟŵĞͲƐŚŝŌĞĚǀŝĞǁŝŶŐƚŚƌŽƵŐŚsZƐĂŶĚĐĂƚĐŚͲƵƉdsƵƉƚŽƐĞǀĞŶĚĂLJƐĂŌĞƌƚƌĂŶƐŵŝƐƐŝŽŶ͘ŽƐĐŚĞĚƵůĞĚ͕ďƌŽĂĚĐĂƐƚdsŽŶdsƐĞƚƐŝŶĐůƵĚŝŶŐůŝǀĞĂƚƚŚĞƟŵĞŽĨďƌŽĂĚĐĂƐƚƉůƵƐ ĂƌĞĂůͲƚĞƌŵƐĚĞĐƌĞĂƐĞŝŶƐƉĞŶĚĨŽƌ Ϯ ƟŵĞͲƐŚŝŌĞĚǀŝĞǁŝŶŐƚŚƌŽƵŐŚsZƐĂŶĚĐĂƚĐŚͲƵƉdsƵƉƚŽƐĞǀĞŶĚĂLJƐĂŌĞƌƚƌĂŶƐŵŝƐƐŝŽŶ͘ Source: Ofcom, The Communication Market Report Aug 2017 / Ampere analysis uk consumer report 2017 13 ĚƵůƚƐϭϲн͘ĂƐĞĚŽŶǀŝĞǁŝŶŐƚŽƐĐŚĞĚƵůĞĚ͕ďƌŽĂĚĐĂƐƚdsŽŶdsƐĞƚƐŝŶĐůƵĚŝŶŐůŝǀĞĂƚƚŚĞƟŵĞŽĨďƌŽĂĚĐĂƐƚƉůƵƐ ŽŶLJĞĂƌŝŶƌĞĂůƚĞƌŵƐ͘DƵĐŚŽĨƚŚŝƐ ƉƌŽŐƌĂŵŵĞƐĂƌĞĮƌƐƚďƌŽĂĚĐĂƐƚ͘ ƟŵĞͲƐŚŝŌĞĚǀŝĞǁŝŶŐƚŚƌŽƵŐŚsZƐĂŶĚĐĂƚĐŚͲƵƉdsƵƉƚŽƐĞǀĞŶĚĂLJƐĂŌĞƌƚƌĂŶƐŵŝƐƐŝŽŶ͘ barb, Ofcom Technology Tracker 2017 ƚŚĞƐĞĐŽŶĚLJĞĂƌƌƵŶŶŝŶŐ͘^ŽŵĞ ŝŶĐƌĞĂƐĞǁĂƐĚƌŝǀĞŶďLJƚŚĞϮϰй /ds͛ƐŝŶǀĞƐƚŵĞŶƚŝŶƉƌŽŐƌĂŵŵŝŶŐĨĞůů ŽĨƚŚŝƐŵĂLJďĞĂƩƌŝďƵƚĂďůĞƚŽ ƌŝƐĞŝŶƐƉĞŶĚŽŶƐƉŽƌƚƐĐŚĂŶŶĞůƐ ďLJϱйŝŶƌĞĂůƚĞƌŵƐLJĞĂƌŽŶLJĞĂƌ͘ dŚƌĞĞ͛ƐŵŽǀĞŽŶůŝŶĞŝŶ&ĞďƌƵĂƌLJ ŝŶƚŚĞŵƵůƟĐŚĂŶŶĞůƐĞĐƚŽƌ͘ϮϬϭϲ ϮϬϭϲ͕ǁŚŝĐŚǁĂƐĐĂƌƌŝĞĚŽƵƚƉĂƌƚůLJ dŚĞW^ĐŚĂŶŶĞůƐŵĂĚĞƵƉϯϳйŽĨ ŵĂƌŬĞĚƚŚĞƐƚĂƌƚŽĨƚŚĞŶĞǁŶŐůŝƐŚ ^ƉĞŶĚŽŶh<ͲŽƌŝŐŝŶĂƚĞĚƉƌŽŐƌĂŵŵŝŶŐďLJƚŚĞŵĂŝŶĮǀĞW^ĐŚĂŶŶĞůƐǁĂƐĂƚŝƚƐŚŝŐŚĞƐƚůĞǀĞů ƚŽŵĂŬĞďƌŽĂĚĐĂƐƚƐĂǀŝŶŐƐϰ͘dŚĞ ĂůůŶĞƚǁŽƌŬƉƌŽŐƌĂŵŵĞƐƉĞŶĚŝŶ WƌĞŵŝĞƌ>ĞĂŐƵĞ&ŽŽƚďĂůůďƌŽĂĚĐĂƐƚ ĐŚĂŶŶĞů͛ƐďƵĚŐĞƚǁĂƐƌĞĚƵĐĞĚĨƌŽŵ ϮϬϭϲ͕ĚŽǁŶďLJƚŚƌĞĞƉĞƌĐĞŶƚĂŐĞ DĂŶLJƉĞŽƉůĞƐƵďƐĐƌŝďĞƚŽŵŽƌĞƚŚĂŶŽŶĞŽŶͲĚĞŵĂŶĚͬƐƚƌĞĂŵŝŶŐƐĞƌǀŝĐĞƐŝŶĐĞϮϬϭϮ ƌŝŐŚƚƐĚĞĂůƐ͕ĨŽƌǁŚŝĐŚ^ŬLJĂŶĚ άϴϱŵƚŽάϮϱŵĂƐƉĂƌƚŽĨƚŚĞŵŽǀĞϱ͘ ƉŽŝŶƚƐŽŶϮϬϭϱ͘dŚĞŝŶĐƌĞĂƐĞŝŶ dƉĂŝĚĂŚŝŐŚĞƌƉƌŝĐĞƚŚĂŶŝŶ KǀĞƌĂůůƐƉĞŶĚŽŶĮƌƐƚͲƌƵŶh<Ͳ ^ƉĞŶĚŽŶƉĞĂŬƟŵĞƉƌŽŐƌĂŵŵŝŶŐ ŽƌŝŐŝŶĂůƐƉŽƌƚƐĐŽŶƚĞŶƚŝŶĚĂLJƟŵĞ ƐƉĞŶĚŝŶƐƉŽƌƚƐƌŝŐŚƚƐŵĞĂŶƚƚŚĂƚ ƉƌĞǀŝŽƵƐLJĞĂƌƐ͘dŚĞƚǁŽĐŽŵƉĂŶŝĞƐ ^ƉĞŶĚŽŶKŶĞƉƌŽŐƌĂŵŵŝŶŐ LJƚŚĞĞŶĚŽĨϮϬϭϲ͕ĨŽƵƌŝŶƚĞŶ ŵŽƐƚƉŽƉƵůĂƌĐŽŵďŝŶĂƟŽŶǁĂƐ ŝŐŚƚƉĞƌĐĞŶƚŽĨĂůůƵƐĞƌƐŽĨEĞƞůŝdž͕ŽƌŝŐŝŶĂƚĞĚƉƌŽŐƌĂŵŵŝŶŐ;ŝŶĐůƵĚŝŶŐ ĂŶĚŶĂƟŽŶƐ͛ĂŶĚƌĞŐŝŽŶƐ͛ ĂŶĚůĂƚĞŶŝŐŚƚǁŚĞŶĐŽǀĞƌŝŶŐƚŚĞ ĮůŵĂŶĚƐƉŽƌƚĐŚĂŶŶĞůƐĐŽŵďŝŶĞĚ ƚŽŐĞƚŚĞƌƉĂŝĚĂƌĞĐŽƌĚάϱ͘ϭϯϲďŶ ŽǀĞƌƚŽŽŬ/dsƐƉĞŶĚŝŶϮϬϭϲ͕ ƵƐĞƌƐŽĨEĞƞůŝdž͕ŵĂnjŽŶWƌŝŵĞ EĞƞůŝdžĂŶĚŵĂnjŽŶWƌŝŵĞ͕ǁŝƚŚ ŵĂnjŽŶWƌŝŵĞĂŶĚEKtdsŚĂĚŶĂƟŽŶƐ͛ĂŶĚƌĞŐŝŽŶƐ͛ƉƌŽŐƌĂŵŵŝŶŐͿ ƉƌŽŐƌĂŵŵŝŶŐǁĂƐďƌŽĂĚůLJƐƚĂďůĞ͕ ϮϬϭϲh&ƵƌŽƉĞĂŶ&ŽŽƚďĂůů ;ƉƌŝŶĐŝƉĂůůLJ^ŬLJ^ƉŽƌƚƐ͕^ŬLJŝŶĞŵĂ ĨŽƌůŝǀĞWƌĞŵŝĞƌ>ĞĂŐƵĞdsƌŝŐŚƚƐ ƌŝƐŝŶŐďLJϭϬйŝŶƌĞĂůƚĞƌŵƐĂŌĞƌ ďLJƚŚĞŵĂŝŶĮǀĞW^ĐŚĂŶŶĞůƐʹ ǁŚŝůĞƐƉĞŶĚŽŶůĂƚĞͲŶŝŐŚƚĂŶĚ ŚĂŵƉŝŽŶƐŚŝƉƐĂŶĚƚŚĞZŝŽ ĂŶĚd^ƉŽƌƚͿŵĂĚĞƵƉϰϰйŽĨƚŚĞ ĂŶĚEKtdsŚĂĚĂĐĐĞƐƐƚŽŵŽƌĞ ϮϲйŽĨƵƐĞƌƐƵƐŝŶŐďŽƚŚƐĞƌǀŝĐĞƐ ĂĐĐĞƐƐƚŽĂůůƚŚƌĞĞƐĞƌǀŝĐĞƐŝŶƚŚĞ ĨŽƌƚŚƌĞĞƐĞĂƐŽŶƐƐƚĂƌƟŶŐĨƌŽŵ ĂĚŝƉŝŶϮϬϭϱ͕ǁŚĞŶƚŚĞƌĞǁĂƐ KŶĞ͕dǁŽ͕/ds;ŝŶĐůƵĚŝŶŐ ĚĂLJƟŵĞƉƌŽŐƌĂŵŵŝŶŐŐƌĞǁďLJ KůLJŵƉŝĐĂŶĚWĂƌĂůLJŵƉŝĐ'ĂŵĞƐ͘ ƚŽƚĂů͕ƵƉďLJϰƉƉŽŶƚŚĞƉƌĞǀŝŽƵƐ ϮϬϭϲͲϭϳ3͘dŚŝƐŝƐĂϱϵйŝŶĐƌĞĂƐĞŽŶ ŶŽKůLJŵƉŝĐƐŽƌtŽƌůĚƵƉͬ ƚŚĂŶŽŶĞŽĨƚŚĞƐĞƐĞƌǀŝĐĞƐ͘dŚĞ ŝŶƚŚĞĮŶĂůƋƵĂƌƚĞƌŽĨϮϬϭϲ͘ ĮŶĂůƚŚƌĞĞŵŽŶƚŚƐŽĨϮϬϭϲ͘/dsƌĞĂŬĨĂƐƚͿͬ^dsͬhds͕ŚĂŶŶĞůϰ ϯϭйĂŶĚϰйƌĞƐƉĞĐƟǀĞůLJŝŶƌĞĂů LJĞĂƌ͘ŚĂŶŶĞůϰ͕ŚĂŶŶĞůϱ͕ĂŶĚƚŚĞ ƚŚĞάϯ͘ϬϭϴďŶƚŚĞLJƉĂŝĚĨŽƌƚŚƌĞĞ ƵƌŽƉĞĂŶŚĂŵƉŝŽŶƐŚŝƉĨŽŽƚďĂůů͘ KǀĞƌůĂƉďĞƚǁĞĞŶƐƵďƐĐƌŝďĞƌƐŽĨĂŶĚŚĂŶŶĞůϱʹŝŶĐƌĞĂƐĞĚďLJϰй ƚĞƌŵƐ͘dŚŝƐŵĂLJďĞĚƵĞŝŶƉĂƌƚƚŽ ĐŽŵŵĞƌĐŝĂůW^ƉŽƌƞŽůŝŽĐŚĂŶŶĞůƐ͕ ƐĞĂƐŽŶƐŝŶϮϬϭϮ͘^ƉŽƌƚƐĐŚĂŶŶĞůƐ ŶŽƚŚĞƌĨĂĐƚŽƌŝƐƚŚĞĐŽƐƚŽĨƚŚĞ ŝŶƌĞĂůƚĞƌŵƐƚŽάϮ͕ϳϬϴŵŝŶϮϬϭϲ͘ ďƌŽĂĚĐĂƐƚĞƌƐŝŶĐƌĞĂƐŝŶŐƐƉĞŶĚŽŶ ĂůůŝŶǀĞƐƚĞĚƐŝŐŶŝĮĐĂŶƚůLJŵŽƌĞŽŶ ĂĐĐŽƵŶƚĞĚĨŽƌϰϬйŽĨƐƉĞŶĚŽŶh< ĮƌƐƚƐŚŽǁŝŶŐŽĨƉƌŽŐƌĂŵŵĞƐ ƉƌŽŐƌĂŵŵŝŶŐƚŚĂŶŝŶϮϬϭϱ͘ ƚŚĞŵĂŝŶƚĞůĞǀŝƐŝŽŶƐƵďƐĐƌŝƉƟŽŶ ǁŚŝĐŚ͕ŝŶƉƌĞǀŝŽƵƐLJĞĂƌƐ͕ǁŽƵůĚ &ŝŐƵƌĞϮ͘ϰ͗^ƵďƐĐƌŝƉƟŽŶŽŶͲĚĞŵĂŶĚĂŶĚƐƚƌĞĂŵŝŶŐƐĞƌǀŝĐĞƐŽǀĞƌůĂƉ services in the UK &ŝŐƵƌĞϮ͘ϭϴ͗^ƉĞŶĚŽŶĮƌƐƚͲƌƵŶh<ŽƌŝŐŝŶĂƚĞĚŽƵƚƉƵƚŽŶƚŚĞĮǀĞŵĂŝŶW^ĐŚĂŶŶĞůƐ &ŝŐƵƌĞϮ͘ϭϳ͗^ƉĞŶĚŽŶŶĞƚǁŽƌŬdsƉƌŽŐƌĂŵŵĞƐ͗ϮϬϭϱʹϮϬϭϲ

Growth 1 year change 1 year 5 year 11% Total £2,702m £2,712m £2,708m CAGR £7,293m £2,610m £2,595m £2,506m Total £6,572m £213m 13% Channel 5 Amazon £288m £279m £276m 4% 0% £314m 36% £286m £272m £189m £183m 20% EĞƞůŝdž £269m £269m £326m 17% Commercial PSB portfolio channels £267m £269m £277m £217m £553m Prime £245m £212m £318m 26% £234m 2% -0.9% BBC portfolio channels Nat i ons & £511m £1,177m -16% £607m £591m £553m £541m £562m Regions £495m £1,133m 3% BBC Two £788m 31% 0.8% 8% Late night £825m 8% Channel 4 2% £845m 4% £768m 4% Other multichannels 4% -1.5% Day t i me £1,541m £1,574m £1,509m £1,526m £1,569m £1,592m -5% ITV ITV/ Breakfast 4% 57 £2,894m £2,341m 10% BBC One 1%57 0.7% Peak time Now TV 24% Sports channels 2015 2016 2011 2012 2013 2014 2015 2016 57 Source:'Ĩ<^sŽdƌĂĐŬĞƌ͕YϰϮϬϭϲKĐƚŽďĞƌͲĞĐĞŵďĞƌϮϬϭϲ Source: KĨĐŽŵͬďƌŽĂĚĐĂƐƚĞƌƐ͘ Source: KĨĐŽŵͬďƌŽĂĚĐĂƐƚĞƌƐ͘ 57 Note:&ŝŐƵƌĞƐĞdžƉƌĞƐƐĞĚŝŶƌĞĂůƚĞƌŵƐ͘&ŝŐƵƌĞƐĚŽŶŽƚŝŶĐůƵĚĞƐƉĞŶĚŽŶŶĂƟŽŶƐ͛ĂŶĚƌĞŐŝŽŶƐ͛ŽƵƚƉƵƚ͘ƉŽƌƞŽůŝŽĐŚĂŶŶĞůƐ Notes:tϭ͗ZĞĂƐŽŶƐĨŽƌƐŝŐŶŝŶŐƵƉĨŽƌͬƵƐŝŶŐƐĞƌǀŝĐĞ Note: &ŝŐƵƌĞƐĂƌĞĞdžƉƌĞƐƐĞĚŝŶƌĞĂůƚĞƌŵƐ;ϮϬϭϲƉƌŝĐĞƐͿ͘dŚĞLJŝŶĐůƵĚĞ/dsďƌĞĂŬĨĂƐƚ͕ƐƉĞŶĚŝŶŐŝŶƚŚĞŶĂƟŽŶƐĂŶĚƌĞŐŝŽŶƐŽŶŶŐůŝƐŚͲŝŶĐůƵĚĞƐdŚƌĞĞ͕&ŽƵƌ͕EĞǁƐ͕WĂƌůŝĂŵĞŶƚ͕ĂŶĚĞĞďŝĞƐ;ďƵƚŶŽƚ,Ϳ͚͘KƚŚĞƌŵƵůƟĐŚĂŶŶĞůƐ͛ŝŶĐůƵĚĞĂůů Base:EĞƞůŝdžƵƐĞƌƐ;ŶсϭϲϳϬ;ϭϯϴƚƌŝĂůůŝƐƚƐͿͿ͕ŵĂnjŽŶWƌŝŵĞsŝĚĞŽƵƐĞƌƐ;ŶсϭϮϱϱ;ϭϱϲƚƌŝĂůůŝƐƚƐͿͿ͕EKtdsƵƐĞƌƐ;ŶсϰϮϯůĂŶŐƵĂŐĞƉƌŽŐƌĂŵŵŝŶŐ;ĂŶĚĂƐŵĂůůĂŵŽƵŶƚŽĨ/ƌŝƐŚͲůĂŶŐƵĂŐĞƉƌŽŐƌĂŵŵĞƐͿďƵƚĚŽŶŽƚŝŶĐůƵĚĞƚŚĞ͛ƐƉŽƌƞŽůŝŽĐŚĂŶŶĞůƐ͕ůďĂ57 ŐĞŶƌĞƐ;ĞdžĐůƵĚŝŶŐƐƉŽƌƚƐĂŶĚĮůŵƐͿ͘WƌŽŐƌĂŵŵĞƐƉĞŶĚĐŽŵƉƌŝƐĞƐŝŶͲŚŽƵƐĞƉƌŽĚƵĐƟŽŶƐ͕ĐŽŵŵŝƐƐŝŽŶƐĨƌŽŵŝŶĚĞƉĞŶĚĞŶƚƐ͕ĂĐƋƵŝƌĞĚ ;ϴϬƚƌŝĂůůŝƐƚƐͿͿ Žƌ^ϰ͘ ƉƌŽŐƌĂŵŵĞƐĂŶĚƌĞƉĞĂƚƐ;ŽƌŝŐŝŶĂƟŽŶƐĂŶĚĂĐƋƵŝƐŝƟŽŶƐͿ͘ 57 Note: 58 hƐĞƌƐŝŶĐůƵĚĞƚŚŽƐĞǁŚŽĞŝƚŚĞƌƐƵďƐĐƌŝďĞƚŽŽƌĂƌĞƚƌŝĂůůŝŶŐĞĂĐŚƐĞƌǀŝĐĞĂŶĚƵƐĞŝƚĂƚůĞĂƐƚŽŶĐĞĂĨŽƌƚŶŝŐŚƚ͘ ϭ^ƉĞŶĚĮŐƵƌĞƐŚĞƌĞĚŽŶŽƚƌĞƉƌĞƐĞŶƚƚŚĞĞŶƟƌĞĐŽƐƚŽĨƉƌŽŐƌĂŵŵĞƉƌŽĚƵĐƟŽŶŝŶƚŚĞh<ĂƐƚŚĞLJĚŽŶŽƚŝŶĐůƵĚĞƚŚŝƌĚͲƉĂƌƚLJĨƵŶĚŝŶŐŽƌƚŚĞĨƵůůĐŽƐƚŽĨĐŽͲƉƌŽĚƵĐƟŽŶƐǁŝƚŚŽǀĞƌƐĞĂƐďƌŽĂĚĐĂƐƚĞƌƐ͘ 57 Ϯ^ĞĞ&ŝŐƵƌĞϮ͘ϭϵĨŽƌĚĞƚĂŝůĞĚƐƉĞŶĚĂŶĂůLJƐŝƐŽĨŬĞLJŐĞŶƌĞƐ͘ 3 ^ŽƵƌĐĞ͗ŚƩƉ͗ͬͬǁǁǁ͘ďďĐ͘ĐŽ͘ƵŬͬƐƉŽƌƚͬĨŽŽƚďĂůůͬϯϭϯϱϳϰϬϵ58 57 ϰ^ŽƵƌĐĞ͗ŚƩƉ͗ͬͬǁǁǁ͘ďďĐ͘ĐŽ͘ƵŬͬŶĞǁƐͬĞŶƚĞƌƚĂŝŶŵĞŶƚͲĂƌƚƐͲϯϱϱϳϴϴϲϳ ϱ^ŽƵƌĐĞ͗ŚƩƉ͗ͬͬǁǁǁ͘ďďĐ͘ĐŽ͘ƵŬͬŶĞǁƐͬĞŶƚĞƌƚĂŝŶŵĞŶƚͲĂƌƚƐͲϯϰϵϯϮϲϴϴ58

58

58

58

58

58

41

41

41

41

41

41

41

41 1 United Kingdom’s communications market 1 1 UnitedUnited Kingdom’s Kingdom’s communications communicationsCommunications market marketMarket Report 2017 - United Kingdom CommunicationsCommunications Market Market Report Report 2017 2017 - United - United Kingdom Kingdom

1.4.2 The services people use1.4.21.4.2 The The services services people people use use 1 United Kingdom’s communications market Communications Market Report 2017 - United Kingdom 1 United Kingdom’s communications market Communications Market Report 2017 - United Kingdom KŶͲĚĞŵĂŶĚĂŶĚƐƚƌĞĂŵŝŶŐĂƌĞďĞĐŽŵŝŶŐŵŽƌĞŵĂŝŶƐƚƌĞĂŵKŶͲĚĞŵĂŶĚĂŶĚƐƚƌĞĂŵŝŶŐĂƌĞďĞĐŽŵŝŶŐŵŽƌĞŵĂŝŶƐƚƌĞĂŵKŶͲĚĞŵĂŶĚĂŶĚƐƚƌĞĂŵŝŶŐĂƌĞďĞĐŽŵŝŶŐŵŽƌĞŵĂŝŶƐƚƌĞĂŵ

Ϯ 3 tŚŝůĞϵϭйŽĨh<ĂĚƵůƚƐǁĂƚĐŚĞĚ ĂĚƵůƚ;ϭϲнͿƉĞƌĚĂLJŝŶϮϬϭϲtŚŝůĞϵϭйŽĨh<ĂĚƵůƚƐǁĂƚĐŚĞĚtŚŝůĞϵϭйŽĨh<ĂĚƵůƚƐǁĂƚĐŚĞĚϮ͘ ĂĚƵůƚƐĐŝƟŶŐƚŚŝƐ͕ĨŽůůŽǁĞĚďLJ/dsĂĚƵůƚ;ϭϲнͿƉĞƌĚĂLJŝŶϮϬϭϲĂĚƵůƚ;ϭϲнͿƉĞƌĚĂLJŝŶϮϬϭϲ͘ Ϯ͘ ĂĚƵůƚƐĐŝƟŶŐƚŚŝƐ͕ĨŽůůŽǁĞĚďLJ/dsĂĚƵůƚƐĐŝƟŶŐƚŚŝƐ͕ĨŽůůŽǁĞĚďLJ/ds ůŝǀĞdsŝŶĂŶĂǀĞƌĂŐĞǁĞĞŬŝŶůŝǀĞdsŝŶĂŶĂǀĞƌĂŐĞǁĞĞŬŝŶ ,Ƶď;ϰϬйͿĂŶĚzŽƵdƵďĞ;ϯϴйͿ͘,Ƶď;ϰϬйͿĂŶĚzŽƵdƵďĞ;ϯϴйͿ͘ ůŝǀĞdsŝŶĂŶĂǀĞƌĂŐĞǁĞĞŬŝŶ ,Ƶď;ϰϬйͿĂŶĚzŽƵdƵďĞ;ϯϴйͿ͘tŚĞŶƌĞƐƉŽŶĚĞŶƚƐƚŽŽƵƌϮϬϭϳtŚĞŶƌĞƐƉŽŶĚĞŶƚƐƚŽŽƵƌϮϬϭϳ tŚĞŶƌĞƐƉŽŶĚĞŶƚƐƚŽŽƵƌϮϬϭϳϭ ϭ 1.4.2 The services people use ϮϬϭϲϭ͕ĚĂƚĂĨƌŽŵZƐŚŽǁƚŚĂƚ ϮϬϭϲϮϬϭϲ͕ĚĂƚĂĨƌŽŵZƐŚŽǁƚŚĂƚ͕ĚĂƚĂĨƌŽŵZƐŚŽǁƚŚĂƚůŵŽƐƚĂƚŚŝƌĚ;ϯϭйͿƐĂŝĚƚŚĞLJƵƐĞĚ ůŵŽƐƚĂƚŚŝƌĚ;ϯϭйͿƐĂŝĚƚŚĞLJƵƐĞĚůŵŽƐƚĂƚŚŝƌĚ;ϯϭйͿƐĂŝĚƚŚĞLJƵƐĞĚ 1.4.2 The servicessurvey were askedpeople what services use surveysurvey were were asked asked what what services services ƚŚĞĂŵŽƵŶƚŽĨƟŵĞh<ĂĚƵůƚƐ ƚŚĞĂŵŽƵŶƚŽĨƟŵĞh<ĂĚƵůƚƐƚŚĞĂŵŽƵŶƚŽĨƟŵĞh<ĂĚƵůƚƐ EĞƞůŝdžĨŽƌǁĂƚĐŚŝŶŐƉƌŽŐƌĂŵŵĞƐCommunications Market Report 2017 - UnitedEĞƞůŝdžĨŽƌǁĂƚĐŚŝŶŐƉƌŽŐƌĂŵŵĞƐEĞƞůŝdžĨŽƌǁĂƚĐŚŝŶŐƉƌŽŐƌĂŵŵĞƐ Kingdom 1 United Kingdom’s communications1 United marketKingdom’sŽƚŚĞƌƚŚĂŶůŝǀĞďƌŽĂĚĐĂƐƚdsƚŚĞLJ communications market Communications MarketŽƚŚĞƌƚŚĂŶůŝǀĞďƌŽĂĚĐĂƐƚdsƚŚĞLJŽƚŚĞƌƚŚĂŶůŝǀĞďƌŽĂĚĐĂƐƚdsƚŚĞLJ Report 2017 - United Kingdom ƐƉĞŶĚǁĂƚĐŚŝŶŐŚĂƐĨĂůůĞŶƐŝŶĐĞ The proportionƐƉĞŶĚǁĂƚĐŚŝŶŐŚĂƐĨĂůůĞŶƐŝŶĐĞƐƉĞŶĚǁĂƚĐŚŝŶŐŚĂƐĨĂůůĞŶƐŝŶĐĞ of adults whoĂŶĚĮůŵƐĨŽůůŽǁĞĚďLJůůϰ;ϮϲйͿ use different ĂŶĚĮůŵƐĨŽůůŽǁĞĚďLJůůϰ;ϮϲйͿĂŶĚĮůŵƐĨŽůůŽǁĞĚďLJůůϰ;ϮϲйͿ ƵƐĞĚƚŽǁĂƚĐŚdsƉƌŽŐƌĂŵŵĞƐĂŶĚKŶͲĚĞŵĂŶĚĂŶĚƐƚƌĞĂŵŝŶŐĂƌĞďĞĐŽŵŝŶŐŵŽƌĞŵĂŝŶƐƚƌĞĂŵƵƐĞĚƚŽǁĂƚĐŚdsƉƌŽŐƌĂŵŵĞƐĂŶĚƵƐĞĚƚŽǁĂƚĐŚdsƉƌŽŐƌĂŵŵĞƐĂŶĚ Ownership of Internet Enabled Devices ϮϬϭϬ͕ǁŝƚŚĂĚĞĐůŝŶĞŝŶĂǀĞƌĂŐĞKŶͲĚĞŵĂŶĚĂŶĚƐƚƌĞĂŵŝŶŐĂƌĞďĞĐŽŵŝŶŐŵŽƌĞŵĂŝŶƐƚƌĞĂŵϮϬϭϬ͕ǁŝƚŚĂĚĞĐůŝŶĞŝŶĂǀĞƌĂŐĞϮϬϭϬ͕ǁŝƚŚĂĚĞĐůŝŶĞŝŶĂǀĞƌĂŐĞ ĂŶĚŵĂnjŽŶWƌŝŵĞ;ϮϬйͿ͕DLJϱ ĂŶĚŵĂnjŽŶWƌŝŵĞ;ϮϬйͿ͕DLJϱĂŶĚŵĂnjŽŶWƌŝŵĞ;ϮϬйͿ͕DLJϱ ĮůŵƐ͕ŝWůĂLJĞƌǁĂƐƚŚĞŵŽƐƚ ĮůŵƐ͕ŝWůĂLJĞƌǁĂƐƚŚĞŵŽƐƚĮůŵƐ͕ŝWůĂLJĞƌǁĂƐƚŚĞŵŽƐƚ services forĚĂŝůLJǀŝĞǁŝŶŐƟŵĞŽĨϯϲŵŝŶƵƚĞƐ watching TV programmes/films (%) ;ϭϴйͿĂŶĚ&ĂĐĞŬ;ϭϲйͿ͕ǁŝƚŚϮ ĚĂŝůLJǀŝĞǁŝŶŐƟŵĞŽĨϯϲŵŝŶƵƚĞƐ ĚĂŝůLJǀŝĞǁŝŶŐƟŵĞŽĨϯϲŵŝŶƵƚĞƐtŚŝůĞϵϭйŽĨh<ĂĚƵůƚƐǁĂƚĐŚĞĚ;ϭϴйͿĂŶĚ&ĂĐĞŬ;ϭϲйͿ͕ǁŝƚŚƉŽƉƵůĂƌĐŚŽŝĐĞ͕ǁŝƚŚϲϯйŽĨh<ĂĚƵůƚ;ϭϲнͿƉĞƌĚĂLJŝŶϮϬϭϲ;ϭϴйͿĂŶĚ&ĂĐĞŬ;ϭϲйͿ͕ǁŝƚŚ͘HouseholdĂĚƵůƚƐĐŝƟŶŐƚŚŝƐ͕ĨŽůůŽǁĞĚďLJ/ds Take-up and year-on-year difference tŚŝůĞϵϭйŽĨh<ĂĚƵůƚƐǁĂƚĐŚĞĚƉŽƉƵůĂƌĐŚŽŝĐĞ͕ǁŝƚŚϲϯйŽĨh<ĂĚƵůƚ;ϭϲнͿƉĞƌĚĂLJŝŶϮϬϭϲƉŽƉƵůĂƌĐŚŽŝĐĞ͕ǁŝƚŚϲϯйŽĨh<Ϯ͘ ĂĚƵůƚƐĐŝƟŶŐƚŚŝƐ͕ĨŽůůŽǁĞĚďLJ/ds ;ͲϭϰйͿƚŽϯŚŽƵƌƐϱϭŵŝŶƵƚĞƐƉĞƌ ;ͲϭϰйͿƚŽϯŚŽƵƌƐϱϭŵŝŶƵƚĞƐƉĞƌ;ͲϭϰйͿƚŽϯŚŽƵƌƐϱϭŵŝŶƵƚĞƐƉĞƌůŝǀĞdsŝŶĂŶĂǀĞƌĂŐĞǁĞĞŬŝŶĂůůŽƚŚĞƌƐĞƌǀŝĐĞƐďĞůŽǁϭϱй͘ ĂůůŽƚŚĞƌƐĞƌǀŝĐĞƐďĞůŽǁϭϱй͘ĂůůŽƚŚĞƌƐĞƌǀŝĐĞƐďĞůŽǁϭϱй͘,Ƶď;ϰϬйͿĂŶĚzŽƵdƵďĞ;ϯϴйͿ͘ ůŝǀĞdsŝŶĂŶĂǀĞƌĂŐĞǁĞĞŬŝŶ ,Ƶď;ϰϬйͿĂŶĚzŽƵdƵďĞ;ϯϴйͿ͘tŚĞŶƌĞƐƉŽŶĚĞŶƚƐƚŽŽƵƌϮϬϭϳ 1.4.2 The services peopletŚĞŶƌĞƐƉŽŶĚĞŶƚƐƚŽŽƵƌϮϬϭϳ useϮϬϭϲϭ͕ĚĂƚĂĨƌŽŵZƐŚŽǁƚŚĂƚ ůŵŽƐƚĂƚŚŝƌĚ;ϯϭйͿƐĂŝĚƚŚĞLJƵƐĞĚ 1.4.2 The servicesϮϬϭϲϭ ͕ĚĂƚĂĨƌŽŵZƐŚŽǁƚŚĂƚpeople use ůŵŽƐƚĂƚŚŝƌĚ;ϯϭйͿƐĂŝĚƚŚĞLJƵƐĞĚsurvey were asked what services 1 United Kingdom’s communications&ŝŐƵƌĞϭ͘ϲ͗dŚĞƉƌŽƉŽƌƟŽŶŽĨĂĚƵůƚƐǁŚŽƵƐĞĚŝīĞƌĞŶƚƐĞƌǀŝĐĞƐĨŽƌǁĂƚĐŚŝŶŐdsƉƌŽŐƌĂŵŵĞƐͬĮůŵƐ;йͿ market &ŝŐƵƌĞϭ͘ϲ͗Communications&ŝŐƵƌĞϭ͘ϲ͗dŚĞƉƌŽƉŽƌƟŽŶŽĨĂĚƵůƚƐǁŚŽƵƐĞĚŝīĞƌĞŶƚƐĞƌǀŝĐĞƐĨŽƌǁĂƚĐŚŝŶŐdsƉƌŽŐƌĂŵŵĞƐͬĮůŵƐ;йͿdŚĞƉƌŽƉŽƌƟŽŶŽĨĂĚƵůƚƐǁŚŽƵƐĞĚŝīĞƌĞŶƚƐĞƌǀŝĐĞƐĨŽƌǁĂƚĐŚŝŶŐdsƉƌŽŐƌĂŵŵĞƐͬĮůŵƐ;йͿ Marketsurvey Report wereƚŚĞĂŵŽƵŶƚŽĨƟŵĞh<ĂĚƵůƚƐ 2017 asked - United what Kingdom services EĞƞůŝdžĨŽƌǁĂƚĐŚŝŶŐƉƌŽŐƌĂŵŵĞƐ 1 United Kingdom’s communications market ƚŚĞĂŵŽƵŶƚŽĨƟŵĞh<ĂĚƵůƚƐCommunications Market Report 2017 - United Kingdom EĞƞůŝdžĨŽƌǁĂƚĐŚŝŶŐƉƌŽŐƌĂŵŵĞƐŽƚŚĞƌƚŚĂŶůŝǀĞďƌŽĂĚĐĂƐƚdsƚŚĞLJ 1 United Kingdom’s communications market Communications Market Report 2017 - United KingdomŽƚŚĞƌƚŚĂŶůŝǀĞďƌŽĂĚĐĂƐƚdsƚŚĞLJƐƉĞŶĚǁĂƚĐŚŝŶŐŚĂƐĨĂůůĞŶƐŝŶĐĞ ĂŶĚĮůŵƐĨŽůůŽǁĞĚďLJůůϰ;ϮϲйͿ ƐƉĞŶĚǁĂƚĐŚŝŶŐŚĂƐĨĂůůĞŶƐŝŶĐĞKŶͲĚĞŵĂŶĚĂŶĚƐƚƌĞĂŵŝŶŐĂƌĞďĞĐŽŵŝŶŐŵŽƌĞŵĂŝŶƐƚƌĞĂŵ ĂŶĚĮůŵƐĨŽůůŽǁĞĚďLJůůϰ;ϮϲйͿƵƐĞĚƚŽǁĂƚĐŚdsƉƌŽŐƌĂŵŵĞƐĂŶĚ KŶͲĚĞŵĂŶĚĂŶĚƐƚƌĞĂŵŝŶŐĂƌĞďĞĐŽŵŝŶŐŵŽƌĞŵĂŝŶƐƚƌĞĂŵ63% ƵƐĞĚƚŽǁĂƚĐŚdsƉƌŽŐƌĂŵŵĞƐĂŶĚϮϬϭϬ͕ǁŝƚŚĂĚĞĐůŝŶĞŝŶĂǀĞƌĂŐĞ40% 38% 31% 28% ĂŶĚŵĂnjŽŶWƌŝŵĞ;ϮϬйͿ͕DLJϱ 63% ϮϬϭϬ͕ǁŝƚŚĂĚĞĐůŝŶĞŝŶĂǀĞƌĂŐĞ40% 38%63% 31%40% 28%38%ĂŶĚŵĂnjŽŶWƌŝŵĞ;ϮϬйͿ͕DLJϱĮůŵƐ͕ŝWůĂLJĞƌǁĂƐƚŚĞŵŽƐƚ31% 28% ĮůŵƐ͕ŝWůĂLJĞƌǁĂƐƚŚĞŵŽƐƚĚĂŝůLJǀŝĞǁŝŶŐƟŵĞŽĨϯϲŵŝŶƵƚĞƐ ;ϭϴйͿĂŶĚ&ĂĐĞŬ;ϭϲйͿ͕ǁŝƚŚ ĚĂŝůLJǀŝĞǁŝŶŐƟŵĞŽĨϯϲŵŝŶƵƚĞƐtŚŝůĞϵϭйŽĨh<ĂĚƵůƚƐǁĂƚĐŚĞĚ ϮĂĚƵůƚ;ϭϲнͿƉĞƌĚĂLJŝŶϮϬϭϲϮ͘ ;ϭϴйͿĂŶĚ&ĂĐĞŬ;ϭϲйͿ͕ǁŝƚŚĂĚƵůƚƐĐŝƟŶŐƚŚŝƐ͕ĨŽůůŽǁĞĚďLJ/dsƉŽƉƵůĂƌĐŚŽŝĐĞ͕ǁŝƚŚϲϯйŽĨh< tŚŝůĞϵϭйŽĨh<ĂĚƵůƚƐǁĂƚĐŚĞĚ ĂĚƵůƚ;ϭϲнͿƉĞƌĚĂLJŝŶϮϬϭϲƉŽƉƵůĂƌĐŚŽŝĐĞ͕ǁŝƚŚϲϯйŽĨh<͘ ;ͲϭϰйͿƚŽϯŚŽƵƌƐϱϭŵŝŶƵƚĞƐƉĞƌĂĚƵůƚƐĐŝƟŶŐƚŚŝƐ͕ĨŽůůŽǁĞĚďLJ/ds ĂůůŽƚŚĞƌƐĞƌǀŝĐĞƐďĞůŽǁϭϱй͘ ůŝǀĞdsŝŶĂŶĂǀĞƌĂŐĞǁĞĞŬŝŶ;ͲϭϰйͿƚŽϯŚŽƵƌƐϱϭŵŝŶƵƚĞƐƉĞƌůŝǀĞdsŝŶĂŶĂǀĞƌĂŐĞǁĞĞŬŝŶ ,Ƶď;ϰϬйͿĂŶĚzŽƵdƵďĞ;ϯϴйͿ͘ĂůůŽƚŚĞƌƐĞƌǀŝĐĞƐďĞůŽǁϭϱй͘,Ƶď;ϰϬйͿĂŶĚzŽƵdƵďĞ;ϯϴйͿ͘ TVTV 1.4.2 The services people use tŚĞŶƌĞƐƉŽŶĚĞŶƚƐƚŽŽƵƌϮϬϭϳtŚĞŶƌĞƐƉŽŶĚĞŶƚƐƚŽŽƵƌϮϬϭϳ TV 1.4.2 The servicesϮϬϭϲϭ͕ĚĂƚĂĨƌŽŵZƐŚŽǁƚŚĂƚ people use ϮϬϭϲϭ͕ĚĂƚĂĨƌŽŵZƐŚŽǁƚŚĂƚ ůŵŽƐƚĂƚŚŝƌĚ;ϯϭйͿƐĂŝĚƚŚĞLJƵƐĞĚůŵŽƐƚĂƚŚŝƌĚ;ϯϭйͿƐĂŝĚƚŚĞLJƵƐĞĚ 1.4.2 The services people use survey were asked what servicessurvey were&ŝŐƵƌĞϭ͘ϲ͗ asked whatdŚĞƉƌŽƉŽƌƟŽŶŽĨĂĚƵůƚƐǁŚŽƵƐĞĚŝīĞƌĞŶƚƐĞƌǀŝĐĞƐĨŽƌǁĂƚĐŚŝŶŐdsƉƌŽŐƌĂŵŵĞƐͬĮůŵƐ;йͿ services ZĞĐŽƌĚĞĚds ZĞĐŽƌĚĞĚdsZĞĐŽƌĚĞĚds ƚŚĞĂŵŽƵŶƚŽĨƟŵĞh<ĂĚƵůƚƐ&ŝŐƵƌĞϭ͘ϲ͗ƚŚĞĂŵŽƵŶƚŽĨƟŵĞh<ĂĚƵůƚƐdŚĞƉƌŽƉŽƌƟŽŶŽĨĂĚƵůƚƐǁŚŽƵƐĞĚŝīĞƌĞŶƚƐĞƌǀŝĐĞƐĨŽƌǁĂƚĐŚŝŶŐdsƉƌŽŐƌĂŵŵĞƐͬĮůŵƐ;йͿEĞƞůŝdžĨŽƌǁĂƚĐŚŝŶŐƉƌŽŐƌĂŵŵĞƐEĞƞůŝdžĨŽƌǁĂƚĐŚŝŶŐƉƌŽŐƌĂŵŵĞƐ ŽƚŚĞƌƚŚĂŶůŝǀĞďƌŽĂĚĐĂƐƚdsƚŚĞLJŽƚŚĞƌƚŚĂŶůŝǀĞďƌŽĂĚĐĂƐƚdsƚŚĞLJ KŶͲĚĞŵĂŶĚĂŶĚƐƚƌĞĂŵŝŶŐĂƌĞďĞĐŽŵŝŶŐŵŽƌĞŵĂŝŶƐƚƌĞĂŵƐƉĞŶĚǁĂƚĐŚŝŶŐŚĂƐĨĂůůĞŶƐŝŶĐĞƐƉĞŶĚǁĂƚĐŚŝŶŐŚĂƐĨĂůůĞŶƐŝŶĐĞ ĂŶĚĮůŵƐĨŽůůŽǁĞĚďLJůůϰ;ϮϲйͿĂŶĚĮůŵƐĨŽůůŽǁĞĚďLJůůϰ;ϮϲйͿ KŶͲĚĞŵĂŶĚĂŶĚƐƚƌĞĂŵŝŶŐĂƌĞďĞĐŽŵŝŶŐŵŽƌĞŵĂŝŶƐƚƌĞĂŵƵƐĞĚƚŽǁĂƚĐŚdsƉƌŽŐƌĂŵŵĞƐĂŶĚƵƐĞĚƚŽǁĂƚĐŚdsƉƌŽŐƌĂŵŵĞƐĂŶĚ KŶͲĚĞŵĂŶĚĂŶĚƐƚƌĞĂŵŝŶŐĂƌĞďĞĐŽŵŝŶŐŵŽƌĞŵĂŝŶƐƚƌĞĂŵϮϬϭϬ͕ǁŝƚŚĂĚĞĐůŝŶĞŝŶĂǀĞƌĂŐĞϮϬϭϬ͕ǁŝƚŚĂĚĞĐůŝŶĞŝŶĂǀĞƌĂŐĞ 63%ĂŶĚŵĂnjŽŶWƌŝŵĞ;ϮϬйͿ͕DLJϱ40%ĂŶĚŵĂnjŽŶWƌŝŵĞ;ϮϬйͿ͕DLJϱ38% 31% Games Console28% Smartphone Smart Watch Tablet 63% ĮůŵƐ͕ŝWůĂLJĞƌǁĂƐƚŚĞŵŽƐƚϮ 26%40%26% ĮůŵƐ͕ŝWůĂLJĞƌǁĂƐƚŚĞŵŽƐƚ20%38%20% 18%31%18% 16%28% 12%12% Internet Connected tŚŝůĞϵϭйŽĨh<ĂĚƵůƚƐǁĂƚĐŚĞĚ26% ĂĚƵůƚ;ϭϲнͿƉĞƌĚĂLJŝŶϮϬϭϲĚĂŝůLJǀŝĞǁŝŶŐƟŵĞŽĨϯϲŵŝŶƵƚĞƐ20% Ϯ ͘ 18% ĂĚƵůƚƐĐŝƟŶŐƚŚŝƐ͕ĨŽůůŽǁĞĚďLJ/ds16% 12%;ϭϴйͿĂŶĚ&ĂĐĞŬ;ϭϲйͿ͕ǁŝƚŚ16% tŚŝůĞϵϭйŽĨh<ĂĚƵůƚƐǁĂƚĐŚĞĚĚĂŝůLJǀŝĞǁŝŶŐƟŵĞŽĨϯϲŵŝŶƵƚĞƐĂĚƵůƚ;ϭϲнͿƉĞƌĚĂLJŝŶϮϬϭϲ ͘ ĂĚƵůƚƐĐŝƟŶŐƚŚŝƐ͕ĨŽůůŽǁĞĚďLJ/dsƉŽƉƵůĂƌĐŚŽŝĐĞ͕ǁŝƚŚϲϯйŽĨh<;ϭϴйͿĂŶĚ&ĂĐĞŬ;ϭϲйͿ͕ǁŝƚŚ tŚŝůĞϵϭйŽĨh<ĂĚƵůƚƐǁĂƚĐŚĞĚůŝǀĞdsŝŶĂŶĂǀĞƌĂŐĞǁĞĞŬŝŶĂĚƵůƚ;ϭϲнͿƉĞƌĚĂLJŝŶϮϬϭϲϮ͘ ĂĚƵůƚƐĐŝƟŶŐƚŚŝƐ͕ĨŽůůŽǁĞĚďLJ/dsƉŽƉƵůĂƌĐŚŽŝĐĞ͕ǁŝƚŚϲϯйŽĨh<,Ƶď;ϰϬйͿĂŶĚzŽƵdƵďĞ;ϯϴйͿ͘ 44% with 52.4 m 4G Dongle 10% +5pp 9% +4pp 58% ůŝǀĞdsŝŶĂŶĂǀĞƌĂŐĞǁĞĞŬŝŶ;ͲϭϰйͿƚŽϯŚŽƵƌƐϱϭŵŝŶƵƚĞƐƉĞƌtŚĞŶƌĞƐƉŽŶĚĞŶƚƐƚŽŽƵƌϮϬϭϳ;ͲϭϰйͿƚŽϯŚŽƵƌƐϱϭŵŝŶƵƚĞƐƉĞƌ,Ƶď;ϰϬйͿĂŶĚzŽƵdƵďĞ;ϯϴйͿ͘ĂůůŽƚŚĞƌƐĞƌǀŝĐĞƐďĞůŽǁϭϱй͘ĂůůŽƚŚĞƌƐĞƌǀŝĐĞƐďĞůŽǁϭϱй͘ TV ϭ tŚĞŶƌĞƐƉŽŶĚĞŶƚƐƚŽŽƵƌϮϬϭϳ ůŝǀĞdsŝŶĂŶĂǀĞƌĂŐĞǁĞĞŬŝŶϮϬϭϲϭ ͕ĚĂƚĂĨƌŽŵZƐŚŽǁƚŚĂƚ ,Ƶď;ϰϬйͿĂŶĚzŽƵdƵďĞ;ϯϴйͿ͘ůŵŽƐƚĂƚŚŝƌĚ;ϯϭйͿƐĂŝĚƚŚĞLJƵƐĞĚ TV ϮϬϭϲ ͕ĚĂƚĂĨƌŽŵZƐŚŽǁƚŚĂƚtŚĞŶƌĞƐƉŽŶĚĞŶƚƐƚŽŽƵƌϮϬϭϳsurvey were asked what services ůŵŽƐƚĂƚŚŝƌĚ;ϯϭйͿƐĂŝĚƚŚĞLJƵƐĞĚ subcriptions ϮϬϭϲϭ͕ĚĂƚĂĨƌŽŵZƐŚŽǁƚŚĂƚƚŚĞĂŵŽƵŶƚŽĨƟŵĞh<ĂĚƵůƚƐ survey were askedůŵŽƐƚĂƚŚŝƌĚ;ϯϭйͿƐĂŝĚƚŚĞLJƵƐĞĚ what services EĞƞůŝdžĨŽƌǁĂƚĐŚŝŶŐƉƌŽŐƌĂŵŵĞƐ ZĞĐŽƌĚĞĚds ƚŚĞĂŵŽƵŶƚŽĨƟŵĞh<ĂĚƵůƚƐsurvey were&ŝŐƵƌĞϭ͘ϲ͗ asked dŚĞƉƌŽƉŽƌƟŽŶŽĨĂĚƵůƚƐǁŚŽƵƐĞĚŝīĞƌĞŶƚƐĞƌǀŝĐĞƐĨŽƌǁĂƚĐŚŝŶŐdsƉƌŽŐƌĂŵŵĞƐͬĮůŵƐ;йͿwhat servicesŽƚŚĞƌƚŚĂŶůŝǀĞďƌŽĂĚĐĂƐƚdsƚŚĞLJ &ŝŐƵƌĞϭ͘ϲ͗dŚĞƉƌŽƉŽƌƟŽŶŽĨĂĚƵůƚƐǁŚŽƵƐĞĚŝīĞƌĞŶƚƐĞƌǀŝĐĞƐĨŽƌǁĂƚĐŚŝŶŐdsƉƌŽŐƌĂŵŵĞƐͬĮůŵƐ;йͿEĞƞůŝdžĨŽƌǁĂƚĐŚŝŶŐƉƌŽŐƌĂŵŵĞƐ ZĞĐŽƌĚĞĚds 76% +5pp ƚŚĞĂŵŽƵŶƚŽĨƟŵĞh<ĂĚƵůƚƐƐƉĞŶĚǁĂƚĐŚŝŶŐŚĂƐĨĂůůĞŶƐŝŶĐĞ ŽƚŚĞƌƚŚĂŶůŝǀĞďƌŽĂĚĐĂƐƚdsƚŚĞLJEĞƞůŝdžĨŽƌǁĂƚĐŚŝŶŐƉƌŽŐƌĂŵŵĞƐĂŶĚĮůŵƐĨŽůůŽǁĞĚďLJůůϰ;ϮϲйͿ ƐƉĞŶĚǁĂƚĐŚŝŶŐŚĂƐĨĂůůĞŶƐŝŶĐĞŽƚŚĞƌƚŚĂŶůŝǀĞďƌŽĂĚĐĂƐƚdsƚŚĞLJƵƐĞĚƚŽǁĂƚĐŚdsƉƌŽŐƌĂŵŵĞƐĂŶĚ ĂŶĚĮůŵƐĨŽůůŽǁĞĚďLJůůϰ;ϮϲйͿ ƐƉĞŶĚǁĂƚĐŚŝŶŐŚĂƐĨĂůůĞŶƐŝŶĐĞϮϬϭϬ͕ǁŝƚŚĂĚĞĐůŝŶĞŝŶĂǀĞƌĂŐĞ ƵƐĞĚƚŽǁĂƚĐŚdsƉƌŽŐƌĂŵŵĞƐĂŶĚĂŶĚĮůŵƐĨŽůůŽǁĞĚďLJůůϰ;ϮϲйͿĂŶĚŵĂnjŽŶWƌŝŵĞ;ϮϬйͿ͕DLJϱ ϮϬϭϬ͕ǁŝƚŚĂĚĞĐůŝŶĞŝŶĂǀĞƌĂŐĞƵƐĞĚƚŽǁĂƚĐŚdsƉƌŽŐƌĂŵŵĞƐĂŶĚĮůŵƐ͕ŝWůĂLJĞƌǁĂƐƚŚĞŵŽƐƚ63% 40%ĂŶĚŵĂnjŽŶWƌŝŵĞ;ϮϬйͿ͕DLJϱ38% 31% 28% ϮϬϭϬ͕ǁŝƚŚĂĚĞĐůŝŶĞŝŶĂǀĞƌĂŐĞĚĂŝůLJǀŝĞǁŝŶŐƟŵĞŽĨϯϲŵŝŶƵƚĞƐ63% ĮůŵƐ͕ŝWůĂLJĞƌǁĂƐƚŚĞŵŽƐƚ40%ĂŶĚŵĂnjŽŶWƌŝŵĞ;ϮϬйͿ͕DLJϱ38% ;ϭϴйͿĂŶĚ&ĂĐĞŬ;ϭϲйͿ͕ǁŝƚŚ31%26% 28%20% 18% 16% 12% ĚĂŝůLJǀŝĞǁŝŶŐƟŵĞŽĨϯϲŵŝŶƵƚĞƐĮůŵƐ͕ŝWůĂLJĞƌǁĂƐƚŚĞŵŽƐƚƉŽƉƵůĂƌĐŚŽŝĐĞ͕ǁŝƚŚϲϯйŽĨh<26% 20%;ϭϴйͿĂŶĚ&ĂĐĞŬ;ϭϲйͿ͕ǁŝƚŚ18% 16% 12% ĚĂŝůLJǀŝĞǁŝŶŐƟŵĞŽĨϯϲŵŝŶƵƚĞƐ;ͲϭϰйͿƚŽϯŚŽƵƌƐϱϭŵŝŶƵƚĞƐƉĞƌ ƉŽƉƵůĂƌĐŚŽŝĐĞ͕ǁŝƚŚϲϯйŽĨh<;ϭϴйͿĂŶĚ&ĂĐĞŬ;ϭϲйͿ͕ǁŝƚŚĂůůŽƚŚĞƌƐĞƌǀŝĐĞƐďĞůŽǁϭϱй͘ ;ͲϭϰйͿƚŽϯŚŽƵƌƐϱϭŵŝŶƵƚĞƐƉĞƌƉŽƉƵůĂƌĐŚŽŝĐĞ͕ǁŝƚŚϲϯйŽĨh< ĂůůŽƚŚĞƌƐĞƌǀŝĐĞƐďĞůŽǁϭϱй͘ ;ͲϭϰйͿƚŽϯŚŽƵƌƐϱϭŵŝŶƵƚĞƐƉĞƌ tŚĞŶǁĞŐƌŽƵƉƚŚĞƐĞƚŽŐĞƚŚĞƌŝŶƚŽĂůůŽƚŚĞƌƐĞƌǀŝĐĞƐďĞůŽǁϭϱй͘,Ƶď͕DLJϱͿƵƐĞĚďLJϲϳйŽĨĂĚƵůƚƐtŚĞŶǁĞŐƌŽƵƉƚŚĞƐĞƚŽŐĞƚŚĞƌŝŶƚŽtŚĞŶǁĞŐƌŽƵƉƚŚĞƐĞƚŽŐĞƚŚĞƌŝŶƚŽ2 TelevisionsŝƌŐŝŶDĞĚŝĂ;ϮϯйͿ͘ĚƵůƚƐĂŐĞĚϭϲͲ,Ƶď͕DLJϱͿƵƐĞĚďLJϲϳйŽĨĂĚƵůƚƐ,Ƶď͕DLJϱͿƵƐĞĚďLJϲϳйŽĨĂĚƵůƚƐ and audio-visualTV contentsŝƌŐŝŶDĞĚŝĂ;ϮϯйͿ͘ĚƵůƚƐĂŐĞĚϭϲͲTVsŝƌŐŝŶDĞĚŝĂ;ϮϯйͿ͘ĚƵůƚƐĂŐĞĚϭϲͲ Communications Market Report 2017 - United Kingdom types of services, we can see that ĐŽŵďŝŶĞĚ͕ĨŽůůŽǁĞĚďLJƐƵďƐĐƌŝƉƟŽŶ ϮϰĂƌĞŵŽƐƚůŝŬĞůLJƚŽƵƐĞŵŽƐƚƚLJƉĞƐ &ŝŐƵƌĞϭ͘ϲ͗dŚĞƉƌŽƉŽƌƟŽŶŽĨĂĚƵůƚƐǁŚŽƵƐĞĚŝīĞƌĞŶƚƐĞƌǀŝĐĞƐĨŽƌǁĂƚĐŚŝŶŐdsƉƌŽŐƌĂŵŵĞƐͬĮůŵƐ;йͿtypes of services, we can see that ĐŽŵďŝŶĞĚ͕ĨŽůůŽǁĞĚďLJƐƵďƐĐƌŝƉƟŽŶtypes of services, we can see that ϮϰĂƌĞŵŽƐƚůŝŬĞůLJƚŽƵƐĞŵŽƐƚƚLJƉĞƐĐŽŵďŝŶĞĚ͕ĨŽůůŽǁĞĚďLJƐƵďƐĐƌŝƉƟŽŶ ϮϰĂƌĞŵŽƐƚůŝŬĞůLJƚŽƵƐĞŵŽƐƚƚLJƉĞƐ &ŝŐƵƌĞϭ͘ϲ͗dŚĞƉƌŽƉŽƌƟŽŶŽĨĂĚƵůƚƐǁŚŽƵƐĞĚŝīĞƌĞŶƚƐĞƌǀŝĐĞƐĨŽƌǁĂƚĐŚŝŶŐdsƉƌŽŐƌĂŵŵĞƐͬĮůŵƐ;йͿƚŚĞŵŽƐƚƉŽƉƵůĂƌŽŶͲĚĞŵĂŶĚĂŶĚ ŽŶͲĚĞŵĂŶĚĂŶĚƐƚƌĞĂŵŝŶŐƐĞƌǀŝĐĞƐZĞĐŽƌĚĞĚds ZĞĐŽƌĚĞĚdsŽĨƐĞƌǀŝĐĞƐ͕ŝŶĐůƵĚŝŶŐƚŚƌĞĞͲƋƵĂƌƚĞƌƐ &ŝŐƵƌĞϭ͘ϲ͗dŚĞƉƌŽƉŽƌƟŽŶŽĨĂĚƵůƚƐǁŚŽƵƐĞĚŝīĞƌĞŶƚƐĞƌǀŝĐĞƐĨŽƌǁĂƚĐŚŝŶŐdsƉƌŽŐƌĂŵŵĞƐͬĮůŵƐ;йͿƚŚĞŵŽƐƚƉŽƉƵůĂƌŽŶͲĚĞŵĂŶĚĂŶĚ ŽŶͲĚĞŵĂŶĚĂŶĚƐƚƌĞĂŵŝŶŐƐĞƌǀŝĐĞƐƚŚĞŵŽƐƚƉŽƉƵůĂƌŽŶͲĚĞŵĂŶĚĂŶĚŽĨƐĞƌǀŝĐĞƐ͕ŝŶĐůƵĚŝŶŐƚŚƌĞĞͲƋƵĂƌƚĞƌƐŽŶͲĚĞŵĂŶĚĂŶĚƐƚƌĞĂŵŝŶŐƐĞƌǀŝĐĞƐ ŽĨƐĞƌǀŝĐĞƐ͕ŝŶĐůƵĚŝŶŐƚŚƌĞĞͲƋƵĂƌƚĞƌƐ ƐƚƌĞĂŵŝŶŐƐĞƌǀŝĐĞƐĨŽƌǁĂƚĐŚŝŶŐ ƐƵĐŚĂƐŵĂnjŽŶWƌŝŵĞĂŶĚEĞƞůŝdžƐƚƌĞĂŵŝŶŐƐĞƌǀŝĐĞƐĨŽƌǁĂƚĐŚŝŶŐƐƚƌĞĂŵŝŶŐƐĞƌǀŝĐĞƐĨŽƌǁĂƚĐŚŝŶŐ ǁŚŽƐĂLJƚŚĞLJƵƐĞƐƵďƐĐƌŝƉƟŽŶƐƵĐŚĂƐŵĂnjŽŶWƌŝŵĞĂŶĚEĞƞůŝdžƐƵĐŚĂƐŵĂnjŽŶWƌŝŵĞĂŶĚEĞƞůŝdž ǁŚŽƐĂLJƚŚĞLJƵƐĞƐƵďƐĐƌŝƉƟŽŶǁŚŽƐĂLJƚŚĞLJƵƐĞƐƵďƐĐƌŝƉƟŽŶ 63% 40% 38% 31% 28% 63% ƉƌŽŐƌĂŵŵĞƐĂŶĚĮůŵƐĂƌĞƚŚĞ40% 38% ;ϰϱйͿ͕ƐŽĐŝĂůŵĞĚŝĂƉůĂƞŽƌŵƐƐƵĐŚƉƌŽŐƌĂŵŵĞƐĂŶĚĮůŵƐĂƌĞƚŚĞƉƌŽŐƌĂŵŵĞƐĂŶĚĮůŵƐĂƌĞƚŚĞ31% 28% ŽŶͲĚĞŵĂŶĚĂŶĚƐƚƌĞĂŵŝŶŐƐĞƌǀŝĐĞƐ;ϰϱйͿ͕ƐŽĐŝĂůŵĞĚŝĂƉůĂƞŽƌŵƐƐƵĐŚ;ϰϱйͿ͕ƐŽĐŝĂůŵĞĚŝĂƉůĂƞŽƌŵƐƐƵĐŚ ŽŶͲĚĞŵĂŶĚĂŶĚƐƚƌĞĂŵŝŶŐƐĞƌǀŝĐĞƐŽŶͲĚĞŵĂŶĚĂŶĚƐƚƌĞĂŵŝŶŐƐĞƌǀŝĐĞƐ 63% 40% 38% 31%26% 28%20% 18% 16% 12% ƉƵďůŝĐƐĞƌǀŝĐĞďƌŽĂĚĐĂƐƚĞƌƐ͛ŽŶůŝŶĞ26% 20% ĂƐ&ĂĐĞŬĂŶĚzŽƵdƵďĞ;ϰϭйͿĂŶĚƉƵďůŝĐƐĞƌǀŝĐĞďƌŽĂĚĐĂƐƚĞƌƐ͛ŽŶůŝŶĞƉƵďůŝĐƐĞƌǀŝĐĞďƌŽĂĚĐĂƐƚĞƌƐ͛ŽŶůŝŶĞ18% 16% ;ϳϲйͿĂŶĚďƌŽĂĚĐĂƐƚĞƌŽŶͲĚĞŵĂŶĚĂƐ&ĂĐĞŬĂŶĚzŽƵdƵďĞ;ϰϭйͿĂŶĚĂƐ&ĂĐĞŬĂŶĚzŽƵdƵďĞ;ϰϭйͿĂŶĚ12% ;ϳϲйͿĂŶĚďƌŽĂĚĐĂƐƚĞƌŽŶͲĚĞŵĂŶĚ;ϳϲйͿĂŶĚďƌŽĂĚĐĂƐƚĞƌŽŶͲĚĞŵĂŶĚ ƐĞƌǀŝĐĞƐ;ŝWůĂLJĞƌ͕ůůϰ͕/ds ƉĂLJdsƐĞƌǀŝĐĞƐƐƵĐŚĂƐ^ŬLJdsĂŶĚƐĞƌǀŝĐĞƐ;ŝWůĂLJĞƌ͕ůůϰ͕/dsƐĞƌǀŝĐĞƐ;ŝWůĂLJĞƌ͕ůůϰ͕/dstŚĞŶǁĞŐƌŽƵƉƚŚĞƐĞƚŽŐĞƚŚĞƌŝŶƚŽTVĂŶĚƐƚƌĞĂŵŝŶŐƐĞƌǀŝĐĞƐ;ϳϱйͿ͘ƉĂLJdsƐĞƌǀŝĐĞƐƐƵĐŚĂƐ^ŬLJdsĂŶĚƉĂLJdsƐĞƌǀŝĐĞƐƐƵĐŚĂƐ^ŬLJdsĂŶĚ,Ƶď͕DLJϱͿƵƐĞĚďLJϲϳйŽĨĂĚƵůƚƐĂŶĚƐƚƌĞĂŵŝŶŐƐĞƌǀŝĐĞƐ;ϳϱйͿ͘ĂŶĚƐƚƌĞĂŵŝŶŐƐĞƌǀŝĐĞƐ;ϳϱйͿ͘sŝƌŐŝŶDĞĚŝĂ;ϮϯйͿ͘ĚƵůƚƐĂŐĞĚϭϲͲ tŚĞŶǁĞŐƌŽƵƉƚŚĞƐĞƚŽŐĞƚŚĞƌŝŶƚŽ ,Ƶď͕DLJϱͿƵƐĞĚďLJϲϳйŽĨĂĚƵůƚƐTV sŝƌŐŝŶDĞĚŝĂ;ϮϯйͿ͘ĚƵůƚƐĂŐĞĚϭϲͲ TV types of services, we can see that ĐŽŵďŝŶĞĚ͕ĨŽůůŽǁĞĚďLJƐƵďƐĐƌŝƉƟŽŶ ϮϰĂƌĞŵŽƐƚůŝŬĞůLJƚŽƵƐĞŵŽƐƚƚLJƉĞƐ types of services, we can see that ĐŽŵďŝŶĞĚ͕ĨŽůůŽǁĞĚďLJƐƵďƐĐƌŝƉƟŽŶZĞĐŽƌĚĞĚds ϮϰĂƌĞŵŽƐƚůŝŬĞůLJƚŽƵƐĞŵŽƐƚƚLJƉĞƐ 13 13 ƚŚĞŵŽƐƚƉŽƉƵůĂƌŽŶͲĚĞŵĂŶĚĂŶĚZĞĐŽƌĚĞĚds ŽŶͲĚĞŵĂŶĚĂŶĚƐƚƌĞĂŵŝŶŐƐĞƌǀŝĐĞƐ ŽĨƐĞƌǀŝĐĞƐ͕ŝŶĐůƵĚŝŶŐƚŚƌĞĞͲƋƵĂƌƚĞƌƐ 13 ƚŚĞŵŽƐƚƉŽƉƵůĂƌŽŶͲĚĞŵĂŶĚĂŶĚZĞĐŽƌĚĞĚds ŽŶͲĚĞŵĂŶĚĂŶĚƐƚƌĞĂŵŝŶŐƐĞƌǀŝĐĞƐ2.2 The TVŽĨƐĞƌǀŝĐĞƐ͕ŝŶĐůƵĚŝŶŐƚŚƌĞĞͲƋƵĂƌƚĞƌƐ and audio-visual industries ƐƚƌĞĂŵŝŶŐƐĞƌǀŝĐĞƐĨŽƌǁĂƚĐŚŝŶŐ ƐƵĐŚĂƐŵĂnjŽŶWƌŝŵĞĂŶĚEĞƞůŝdž ǁŚŽƐĂLJƚŚĞLJƵƐĞƐƵďƐĐƌŝƉƟŽŶ ƐƚƌĞĂŵŝŶŐƐĞƌǀŝĐĞƐĨŽƌǁĂƚĐŚŝŶŐ ƐƵĐŚĂƐŵĂnjŽŶWƌŝŵĞĂŶĚEĞƞůŝdž ǁŚŽƐĂLJƚŚĞLJƵƐĞƐƵďƐĐƌŝƉƟŽŶ 13 13 13 ƉƌŽŐƌĂŵŵĞƐĂŶĚĮůŵƐĂƌĞƚŚĞ ;ϰϱйͿ͕ƐŽĐŝĂůŵĞĚŝĂƉůĂƞŽƌŵƐƐƵĐŚ ŽŶͲĚĞŵĂŶĚĂŶĚƐƚƌĞĂŵŝŶŐƐĞƌǀŝĐĞƐ 26% 20% ƉƌŽŐƌĂŵŵĞƐĂŶĚĮůŵƐĂƌĞƚŚĞ18% 16% ;ϰϱйͿ͕ƐŽĐŝĂůŵĞĚŝĂƉůĂƞŽƌŵƐƐƵĐŚ12% ŽŶͲĚĞŵĂŶĚĂŶĚƐƚƌĞĂŵŝŶŐƐĞƌǀŝĐĞƐ 26% 20% 18% 16% ƉƵďůŝĐƐĞƌǀŝĐĞďƌŽĂĚĐĂƐƚĞƌƐ͛ŽŶůŝŶĞ12% ĂƐ&ĂĐĞŬĂŶĚzŽƵdƵďĞ;ϰϭйͿĂŶĚ ;ϳϲйͿĂŶĚďƌŽĂĚĐĂƐƚĞƌŽŶͲĚĞŵĂŶĚ 26% 20% 18% ƉƵďůŝĐƐĞƌǀŝĐĞďƌŽĂĚĐĂƐƚĞƌƐ͛ŽŶůŝŶĞ16% 13 13 12% ĂƐ&ĂĐĞŬĂŶĚzŽƵdƵďĞ;ϰϭйͿĂŶĚ ;ϳϲйͿĂŶĚďƌŽĂĚĐĂƐƚĞƌŽŶͲĚĞŵĂŶĚ 13 ƐĞƌǀŝĐĞƐ;ŝWůĂLJĞƌ͕ůůϰ͕/dsdŚŝƐƐĞĐƟŽŶůŽŽŬƐĂƚĂƌĂŶŐĞŽĨŵĞƚƌŝĐƐƉĂLJdsƐĞƌǀŝĐĞƐƐƵĐŚĂƐ^ŬLJdsĂŶĚ/ƚĂůƐŽƉƌŽǀŝĚĞƐĐŽŵŵĞŶƚĂƌLJŽŶĂŶĚƐƚƌĞĂŵŝŶŐƐĞƌǀŝĐĞƐ;ϳϱйͿ͘Smart TV Desktop Laptop tŚĞŶǁĞŐƌŽƵƉƚŚĞƐĞƚŽŐĞƚŚĞƌŝŶƚŽƐĞƌǀŝĐĞƐ;ŝWůĂLJĞƌ͕ůůϰ͕/dstŚĞŶǁĞŐƌŽƵƉƚŚĞƐĞƚŽŐĞƚŚĞƌŝŶƚŽ,Ƶď͕DLJϱͿƵƐĞĚďLJϲϳйŽĨĂĚƵůƚƐƉĂLJdsƐĞƌǀŝĐĞƐƐƵĐŚĂƐ^ŬLJdsĂŶĚ,Ƶď͕DLJϱͿƵƐĞĚďLJϲϳйŽĨĂĚƵůƚƐsŝƌŐŝŶDĞĚŝĂ;ϮϯйͿ͘ĚƵůƚƐĂŐĞĚϭϲͲĂŶĚƐƚƌĞĂŵŝŶŐƐĞƌǀŝĐĞƐ;ϳϱйͿ͘sŝƌŐŝŶDĞĚŝĂ;ϮϯйͿ͘ĚƵůƚƐĂŐĞĚϭϲͲ 13 13 ĨƌŽŵƚŚĞďƌŽĂĚĐĂƐƚƚĞůĞǀŝƐŝŽŶŝŶĚƵƐƚƌLJ͕ ĐŽŶƐƵŵĞƌĐŚŽŝĐĞŝŶƚŚĞƉĂLJͲdsŵĂƌŬĞƚ͘36% +9pp 29% 64% 13 types of services, we can seetypes that of services,ĐŽŵďŝŶĞĚ͕ĨŽůůŽǁĞĚďLJƐƵďƐĐƌŝƉƟŽŶ we can see that ĐŽŵďŝŶĞĚ͕ĨŽůůŽǁĞĚďLJƐƵďƐĐƌŝƉƟŽŶϮϰĂƌĞŵŽƐƚůŝŬĞůLJƚŽƵƐĞŵŽƐƚƚLJƉĞƐϮϰĂƌĞŵŽƐƚůŝŬĞůLJƚŽƵƐĞŵŽƐƚƚLJƉĞƐ ƚŚĞŵŽƐƚƉŽƉƵůĂƌŽŶͲĚĞŵĂŶĚĂŶĚ 13 ŽŶͲĚĞŵĂŶĚĂŶĚƐƚƌĞĂŵŝŶŐƐĞƌǀŝĐĞƐŝŶĐůƵĚŝŶŐƌĞǀĞŶƵĞƐ͕ĐŽŶƚĞŶƚƐƉĞŶĚĂŶĚŽĨƐĞƌǀŝĐĞƐ͕ŝŶĐůƵĚŝŶŐƚŚƌĞĞͲƋƵĂƌƚĞƌƐIt then goes on to provide an update ƚŚĞŵŽƐƚƉŽƉƵůĂƌŽŶͲĚĞŵĂŶĚĂŶĚ13 13 13ŽŶͲĚĞŵĂŶĚĂŶĚƐƚƌĞĂŵŝŶŐƐĞƌǀŝĐĞƐ ŽĨƐĞƌǀŝĐĞƐ͕ŝŶĐůƵĚŝŶŐƚŚƌĞĞͲƋƵĂƌƚĞƌƐ 13 ƐƚƌĞĂŵŝŶŐƐĞƌǀŝĐĞƐĨŽƌǁĂƚĐŚŝŶŐ ƐƵĐŚĂƐŵĂnjŽŶWƌŝŵĞĂŶĚEĞƞůŝdž ǁŚŽƐĂLJƚŚĞLJƵƐĞƐƵďƐĐƌŝƉƟŽŶ ƐƚƌĞĂŵŝŶŐƐĞƌǀŝĐĞƐĨŽƌǁĂƚĐŚŝŶŐ ƐƵĐŚĂƐŵĂnjŽŶWƌŝŵĞĂŶĚEĞƞůŝdž13 ďƌŽĂĚĐĂƐƚŚŽƵƌƐ͘ǁŚŽƐĂLJƚŚĞLJƵƐĞƐƵďƐĐƌŝƉƟŽŶ ŽŶƌĞĐĞŶƚĚĞǀĞůŽƉŵĞŶƚƐŝŶƚŚĞůŽĐĂůds 13 ƉƌŽŐƌĂŵŵĞƐĂŶĚĮůŵƐĂƌĞƚŚĞ ;ϰϱйͿ͕ƐŽĐŝĂůŵĞĚŝĂƉůĂƞŽƌŵƐƐƵĐŚ ŽŶͲĚĞŵĂŶĚĂŶĚƐƚƌĞĂŵŝŶŐƐĞƌǀŝĐĞƐ 13 ƉƌŽŐƌĂŵŵĞƐĂŶĚĮůŵƐĂƌĞƚŚĞ 13 13;ϰϱйͿ͕ƐŽĐŝĂůŵĞĚŝĂƉůĂƞŽƌŵƐƐƵĐŚ ŽŶͲĚĞŵĂŶĚĂŶĚƐƚƌĞĂŵŝŶŐƐĞƌǀŝĐĞƐ ƐĞĐƚŽƌ͘Source: Ofcom Technology Tracker 2017 ƉƵďůŝĐƐĞƌǀŝĐĞďƌŽĂĚĐĂƐƚĞƌƐ͛ŽŶůŝŶĞƉƵďůŝĐƐĞƌǀŝĐĞďƌŽĂĚĐĂƐƚĞƌƐ͛ŽŶůŝŶĞĂƐ&ĂĐĞŬĂŶĚzŽƵdƵďĞ;ϰϭйͿĂŶĚ13 ĂƐ&ĂĐĞŬĂŶĚzŽƵdƵďĞ;ϰϭйͿĂŶĚ;ϳϲйͿĂŶĚďƌŽĂĚĐĂƐƚĞƌŽŶͲĚĞŵĂŶĚ;ϳϲйͿĂŶĚďƌŽĂĚĐĂƐƚĞƌŽŶͲĚĞŵĂŶĚ 13 33% of HH purchase triple play services tŚĞŶǁĞŐƌŽƵƉƚŚĞƐĞƚŽŐĞƚŚĞƌŝŶƚŽtŚĞŶǁĞŐƌŽƵƉƚŚĞƐĞƚŽŐĞƚŚĞƌŝŶƚŽ13 ƐĞƌǀŝĐĞƐ;ŝWůĂLJĞƌ͕ůůϰ͕/ds,Ƶď͕DLJϱͿƵƐĞĚďLJϲϳйŽĨĂĚƵůƚƐ,Ƶď͕DLJϱͿƵƐĞĚďLJϲϳйŽĨĂĚƵůƚƐƐĞƌǀŝĐĞƐ;ŝWůĂLJĞƌ͕ůůϰ͕/ds13 13ƉĂLJdsƐĞƌǀŝĐĞƐƐƵĐŚĂƐ^ŬLJdsĂŶĚsŝƌŐŝŶDĞĚŝĂ;ϮϯйͿ͘ĚƵůƚƐĂŐĞĚϭϲͲsŝƌŐŝŶDĞĚŝĂ;ϮϯйͿ͘ĚƵůƚƐĂŐĞĚϭϲͲƉĂLJdsƐĞƌǀŝĐĞƐƐƵĐŚĂƐ^ŬLJdsĂŶĚĂŶĚƐƚƌĞĂŵŝŶŐƐĞƌǀŝĐĞƐ;ϳϱйͿ͘ĂŶĚƐƚƌĞĂŵŝŶŐƐĞƌǀŝĐĞƐ;ϳϱйͿ͘ ϭŚƩƉƐ͗ͬͬǁǁǁ͘ŽĨĐŽŵ͘ŽƌŐ͘ƵŬͬƌĞƐĞĂƌĐŚͲĂŶĚͲĚĂƚĂͬŵƵůƟͲƐĞĐƚŽƌͲƌĞƐĞĂƌĐŚͬĚŝŐŝƚĂůͲĚĂLJϭ 13 tŚĞŶǁĞŐƌŽƵƉƚŚĞƐĞƚŽŐĞƚŚĞƌŝŶƚŽtypes of services,,Ƶď͕DLJϱͿƵƐĞĚďLJϲϳйŽĨĂĚƵůƚƐ we canϭŚƩƉƐ͗ͬͬǁǁǁ͘ŽĨĐŽŵ͘ŽƌŐ͘ƵŬͬƌĞƐĞĂƌĐŚͲĂŶĚͲĚĂƚĂͬŵƵůƟͲƐĞĐƚŽƌͲƌĞƐĞĂƌĐŚͬĚŝŐŝƚĂůͲĚĂLJ see that ĐŽŵďŝŶĞĚ͕ĨŽůůŽǁĞĚďLJƐƵďƐĐƌŝƉƟŽŶsŝƌŐŝŶDĞĚŝĂ;ϮϯйͿ͘ĚƵůƚƐĂŐĞĚϭϲͲŚƩƉƐ͗ͬͬǁǁǁ͘ŽĨĐŽŵ͘ŽƌŐ͘ƵŬͬƌĞƐĞĂƌĐŚͲĂŶĚͲĚĂƚĂͬŵƵůƟͲƐĞĐƚŽƌͲƌĞƐĞĂƌĐŚͬĚŝŐŝƚĂůͲĚĂLJϮϰĂƌĞŵŽƐƚůŝŬĞůLJƚŽƵƐĞŵŽƐƚƚLJƉĞƐ types of services, we can see that ĐŽŵďŝŶĞĚ͕ĨŽůůŽǁĞĚďLJƐƵďƐĐƌŝƉƟŽŶincluding Ϯ Pay ϮϰĂƌĞŵŽƐƚůŝŬĞůLJƚŽƵƐĞŵŽƐƚƚLJƉĞƐTV 82% of UK HH have fixed broadband 13 13 ĚƵůƚƐϭϲн͘ĂƐĞĚŽŶǀŝĞǁŝŶŐƚϮ ŽƐĐŚĞĚƵůĞĚ͕ďƌŽĂĚĐĂƐƚdsŽŶdsƐĞƚƐŝŶĐůƵĚŝŶŐůŝǀĞĂƚƚŚĞƟŵĞŽĨďƌŽĂĚĐĂƐƚƉůƵƐ 13 ϮĚƵůƚƐϭϲн͘ĂƐĞĚŽŶǀŝĞǁŝŶŐƚŽƐĐŚĞĚƵůĞĚ͕ďƌŽĂĚĐĂƐƚdsŽŶdsƐĞƚƐŝŶĐůƵĚŝŶŐůŝǀĞĂƚƚŚĞƟŵĞŽĨďƌŽĂĚĐĂƐƚƉůƵƐ13 ĚƵůƚƐϭϲн͘ĂƐĞĚŽŶǀŝĞǁŝŶŐƚ ŽƐĐŚĞĚƵůĞĚ͕ďƌŽĂĚĐĂƐƚdsŽŶdsƐĞƚƐŝŶĐůƵĚŝŶŐůŝǀĞĂƚƚŚĞƟŵĞŽĨďƌŽĂĚĐĂƐƚƉůƵƐ types of services, we can seeƚŚĞŵŽƐƚƉŽƉƵůĂƌŽŶͲĚĞŵĂŶĚĂŶĚ that ĐŽŵďŝŶĞĚ͕ĨŽůůŽǁĞĚďLJƐƵďƐĐƌŝƉƟŽŶ13 ŽŶͲĚĞŵĂŶĚĂŶĚƐƚƌĞĂŵŝŶŐƐĞƌǀŝĐĞƐϮϰĂƌĞŵŽƐƚůŝŬĞůLJƚŽƵƐĞŵŽƐƚƚLJƉĞƐƟŵĞͲƐŚŝŌĞĚǀŝĞǁŝŶŐƚŚƌŽƵŐŚsZƐĂŶĚĐĂƚĐŚͲƵƉdsƵƉƚŽƐĞǀĞŶĚĂLJƐĂŌĞƌƚƌĂŶƐŵŝƐƐŝŽŶ͘ƟŵĞͲƐŚŝŌĞĚǀŝĞǁŝŶŐƚŚƌŽƵŐŚsZƐĂŶĚĐĂƚĐŚͲƵƉdsƵƉƚŽƐĞǀĞŶĚĂLJƐĂŌĞƌƚƌĂŶƐŵŝƐƐŝŽŶ͘ŽĨƐĞƌǀŝĐĞƐ͕ŝŶĐůƵĚŝŶŐƚŚƌĞĞͲƋƵĂƌƚĞƌƐ ƚŚĞŵŽƐƚƉŽƉƵůĂƌŽŶͲĚĞŵĂŶĚĂŶĚ13 ƟŵĞͲƐŚŝŌĞĚǀŝĞǁŝŶŐƚŚƌŽƵŐŚsZƐĂŶĚĐĂƚĐŚͲƵƉdsƵƉƚŽƐĞǀĞŶĚĂLJƐĂŌĞƌƚƌĂŶƐŵŝƐƐŝŽŶ͘ŽŶͲĚĞŵĂŶĚĂŶĚƐƚƌĞĂŵŝŶŐƐĞƌǀŝĐĞƐ ŽĨƐĞƌǀŝĐĞƐ͕ŝŶĐůƵĚŝŶŐƚŚƌĞĞͲƋƵĂƌƚĞƌƐ13 ATON IK ƚŚĞŵŽƐƚƉŽƉƵůĂƌŽŶͲĚĞŵĂŶĚĂŶĚATONƐƚƌĞĂŵŝŶŐƐĞƌǀŝĐĞƐĨŽƌǁĂƚĐŚŝŶŐƐƚƌĞĂŵŝŶŐƐĞƌǀŝĐĞƐĨŽƌǁĂƚĐŚŝŶŐIK ŽŶͲĚĞŵĂŶĚĂŶĚƐƚƌĞĂŵŝŶŐƐĞƌǀŝĐĞƐ13 ƐƵĐŚĂƐŵĂnjŽŶWƌŝŵĞĂŶĚEĞƞůŝdžƐƵĐŚĂƐŵĂnjŽŶWƌŝŵĞĂŶĚEĞƞůŝdžŽĨƐĞƌǀŝĐĞƐ͕ŝŶĐůƵĚŝŶŐƚŚƌĞĞͲƋƵĂƌƚĞƌƐǁŚŽƐĂLJƚŚĞLJƵƐĞƐƵďƐĐƌŝƉƟŽŶǁŚŽƐĂLJƚŚĞLJƵƐĞƐƵďƐĐƌŝƉƟŽŶ 5G roll out and growth of superfast broadband willAT improveON IK video delivery ATON IK D I GITAL ƐƚƌĞĂŵŝŶŐƐĞƌǀŝĐĞƐĨŽƌǁĂƚĐŚŝŶŐD I GITAƉƌŽŐƌĂŵŵĞƐĂŶĚĮůŵƐĂƌĞƚŚĞL 13 ƐƵĐŚĂƐŵĂnjŽŶWƌŝŵĞĂŶĚEĞƞůŝdž13 ;ϰϱйͿ͕ƐŽĐŝĂůŵĞĚŝĂƉůĂƞŽƌŵƐƐƵĐŚǁŚŽƐĂLJƚŚĞLJƵƐĞƐƵďƐĐƌŝƉƟŽŶŽŶͲĚĞŵĂŶĚĂŶĚƐƚƌĞĂŵŝŶŐƐĞƌǀŝĐĞƐ2.2.1 Overview of TV industry revenue D I GITA L D I GITA L ƉƌŽŐƌĂŵŵĞƐĂŶĚĮůŵƐĂƌĞƚŚĞ ;ϰϱйͿ͕ƐŽĐŝĂůŵĞĚŝĂƉůĂƞŽƌŵƐƐƵĐŚ ŽŶͲĚĞŵĂŶĚĂŶĚƐƚƌĞĂŵŝŶŐƐĞƌǀŝĐĞƐ13 Data driven enhanced search, customisation tools, navigation and enhanced ƉƌŽŐƌĂŵŵĞƐĂŶĚĮůŵƐĂƌĞƚŚĞƉƵďůŝĐƐĞƌǀŝĐĞďƌŽĂĚĐĂƐƚĞƌƐ͛ŽŶůŝŶĞƉƵďůŝĐƐĞƌǀŝĐĞďƌŽĂĚĐĂƐƚĞƌƐ͛ŽŶůŝŶĞ;ϰϱйͿ͕ƐŽĐŝĂůŵĞĚŝĂƉůĂƞŽƌŵƐƐƵĐŚ13 ĂƐ&ĂĐĞŬĂŶĚzŽƵdƵďĞ;ϰϭйͿĂŶĚĂƐ&ĂĐĞŬĂŶĚzŽƵdƵďĞ;ϰϭйͿĂŶĚSource:ŽŶͲĚĞŵĂŶĚĂŶĚƐƚƌĞĂŵŝŶŐƐĞƌǀŝĐĞƐ Ofcom Technology;ϳϲйͿĂŶĚďƌŽĂĚĐĂƐƚĞƌŽŶͲĚĞŵĂŶĚ;ϳϲйͿĂŶĚďƌŽĂĚĐĂƐƚĞƌŽŶͲĚĞŵĂŶĚ Tracker 2017 13 ƉƵďůŝĐƐĞƌǀŝĐĞďƌŽĂĚĐĂƐƚĞƌƐ͛ŽŶůŝŶĞƐĞƌǀŝĐĞƐ;ŝWůĂLJĞƌ͕ůůϰ͕/dsƐĞƌǀŝĐĞƐ;ŝWůĂLJĞƌ͕ůůϰ͕/ds13 ĂƐ&ĂĐĞŬĂŶĚzŽƵdƵďĞ;ϰϭйͿĂŶĚƉĂLJdsƐĞƌǀŝĐĞƐƐƵĐŚĂƐ^ŬLJdsĂŶĚƉĂLJdsƐĞƌǀŝĐĞƐƐƵĐŚĂƐ^ŬLJdsĂŶĚ;ϳϲйͿĂŶĚďƌŽĂĚĐĂƐƚĞƌŽŶͲĚĞŵĂŶĚĂŶĚƐƚƌĞĂŵŝŶŐƐĞƌǀŝĐĞƐ;ϳϱйͿ͘ĂŶĚƐƚƌĞĂŵŝŶŐƐĞƌǀŝĐĞƐ;ϳϱйͿ͘13 13 discovery tools will transform cross device access to content ƐĞƌǀŝĐĞƐ;ŝWůĂLJĞƌ͕ůůϰ͕/ds ƉĂLJdsƐĞƌǀŝĐĞƐƐƵĐŚĂƐ^ŬLJdsĂŶĚ ĂŶĚƐƚƌĞĂŵŝŶŐƐĞƌǀŝĐĞƐ;ϳϱйͿ͘ ϭ 13 ŚƩƉƐ͗ͬͬǁǁǁ͘ŽĨĐŽŵ͘ŽƌŐ͘ƵŬͬƌĞƐĞĂƌĐŚͲĂŶĚͲĚĂƚĂͬŵƵůƟͲƐĞĐƚŽƌͲƌĞƐĞĂƌĐŚͬĚŝŐŝƚĂůͲĚĂLJ 13 ϭŚƩƉƐ͗ͬͬǁǁǁ͘ŽĨĐŽŵ͘ŽƌŐ͘ƵŬͬƌĞƐĞĂƌĐŚͲĂŶĚͲĚĂƚĂͬŵƵůƟͲƐĞĐƚŽƌͲƌĞƐĞĂƌĐŚͬĚŝŐŝƚĂůͲĚĂLJ Ϯ 13 13 dŚĞh<dsŝŶĚƵƐƚƌLJŐƌĞǁďLJϭйŝŶƌĞĂůƚĞƌŵƐŝŶϮϬϭϲĂŶĚǁĂƐǁŽƌƚŚάϭϯ͘ϴďŶĚƵůƚƐϭϲн͘ĂƐĞĚŽŶǀŝĞǁŝŶŐƚŽƐĐŚĞĚƵůĞĚ͕ďƌŽĂĚĐĂƐƚdsŽŶdsƐĞƚƐŝŶĐůƵĚŝŶŐůŝǀĞĂƚƚŚĞƟŵĞŽĨďƌŽĂĚĐĂƐƚƉůƵƐ 13 13 ϮĚƵůƚƐϭϲн͘ĂƐĞĚŽŶǀŝĞǁŝŶŐƚŽƐĐŚĞĚƵůĞĚ͕ďƌŽĂĚĐĂƐƚdsŽŶdsƐĞƚƐŝŶĐůƵĚŝŶŐůŝǀĞĂƚƚŚĞƟŵĞŽĨďƌŽĂĚĐĂƐƚƉůƵƐƟŵĞͲƐŚŝŌĞĚǀŝĞǁŝŶŐƚŚƌŽƵŐŚsZƐĂŶĚĐĂƚĐŚͲƵƉdsƵƉƚŽƐĞǀĞŶĚĂLJƐĂŌĞƌƚƌĂŶƐŵŝƐƐŝŽŶ͘ ƟŵĞͲƐŚŝŌĞĚǀŝĞǁŝŶŐƚŚƌŽƵŐŚsZƐĂŶĚĐĂƚĐŚͲƵƉdsƵƉƚŽƐĞǀĞŶĚĂLJƐĂŌĞƌƚƌĂŶƐŵŝƐƐŝŽŶ͘ 13 13 13 1313 13 13 13 dŚĞh<ďƌŽĂĚĐĂƐƚƚĞůĞǀŝƐŝŽŶ ĂǀĞƌĂŐĞƌĞǀĞŶƵĞƉĞƌƵŶŝƚ;ZWhͿŝŶ ƉƌĞǀŝŽƵƐLJĞĂƌŝŶƌĞĂůƚĞƌŵƐ͘dŚŝƐŝƐ 1313 13 13 13 ŝŶĚƵƐƚƌLJŐĞŶĞƌĂƚĞĚάϭϯ͘ϴďŶŝŶ ƚĞůĞǀŝƐŝŽŶƐƵďƐĐƌŝƉƟŽŶĚĂƚĂKĨĐŽŵ ĂĐŽŶƟŶƵĂƟŽŶŽĨƚŚĞƐůŝŐŚƚĚĞĐůŝŶĞ 13 13 ϭ ϭŚƩƉƐ͗ͬͬǁǁǁ͘ŽĨĐŽŵ͘ŽƌŐ͘ƵŬͬƌĞƐĞĂƌĐŚͲĂŶĚͲĚĂƚĂͬŵƵůƟͲƐĞĐƚŽƌͲƌĞƐĞĂƌĐŚͬĚŝŐŝƚĂůͲĚĂLJŚƩƉƐ͗ͬͬǁǁǁ͘ŽĨĐŽŵ͘ŽƌŐ͘ƵŬͬƌĞƐĞĂƌĐŚͲĂŶĚͲĚĂƚĂͬŵƵůƟͲƐĞĐƚŽƌͲƌĞƐĞĂƌĐŚͬĚŝŐŝƚĂůͲĚĂLJ 13 Ϯ ƌĞǀĞŶƵĞĚƵƌŝŶŐϮϬϭϲ͕ĂάϬ͘ϭďŶ ŚĂƐĐŽůůĞĐƚĞĚ͕ǁŚŝĐŚŵĂLJƉĂƌƟĂůůLJ ŝŶƚĞůĞǀŝƐŝŽŶƌĞǀĞŶƵĞŝŶƌĞĂů 13 ϮĚƵůƚƐϭϲн͘ĂƐĞĚŽŶǀŝĞǁŝŶŐƚ13 ŽƐĐŚĞĚƵůĞĚ͕ďƌŽĂĚĐĂƐƚdsŽŶdsƐĞƚƐŝŶĐůƵĚŝŶŐůŝǀĞĂƚƚŚĞƟŵĞŽĨďƌŽĂĚĐĂƐƚƉůƵƐĚƵůƚƐϭϲн͘ĂƐĞĚŽŶǀŝĞǁŝŶŐƚŽƐĐŚĞĚƵůĞĚ͕ďƌŽĂĚĐĂƐƚdsŽŶdsƐĞƚƐŝŶĐůƵĚŝŶŐůŝǀĞĂƚƚŚĞƟŵĞŽĨďƌŽĂĚĐĂƐƚƉůƵƐ ƟŵĞͲƐŚŝŌĞĚǀŝĞǁŝŶŐƚŚƌŽƵŐŚsZƐĂŶĚĐĂƚĐŚͲƵƉdsƵƉƚŽƐĞǀĞŶĚĂLJƐĂŌĞƌƚƌĂŶƐŵŝƐƐŝŽŶ͘ 1313 ƟŵĞͲƐŚŝŌĞĚǀŝĞǁŝŶŐƚŚƌŽƵŐŚsZƐĂŶĚĐĂƚĐŚͲƵƉdsƵƉƚŽƐĞǀĞŶĚĂLJƐĂŌĞƌƚƌĂŶƐŵŝƐƐŝŽŶ͘ ACCESS TO FAST SPEED ONLINE SERVICES CONTINUES TO TRANSFORM 13 ;ϭ͘ϬйͿƌŝƐĞŽŶϮϬϭϱŝŶƌĞĂůƚĞƌŵƐ͘ ĞdžƉůĂŝŶƚŚŝƐƌŝƐĞ͘EĞƚĂĚǀĞƌƟƐŝŶŐ ƚĞƌŵƐŽǀĞƌƚŚĞƉĂƐƚĮǀĞLJĞĂƌƐ͘ 1313 VIEWERdŚŝƐǁĂƐƉƌŝŵĂƌŝůLJĚƌŝǀĞŶďLJĂŶ BEHAVIOUR ƌĞǀĞŶƵĞƌĞŵĂŝŶĞĚŇĂƚ;ĂŶĂůLJƐĞĚ ZĞǀĞŶƵĞĨƌŽŵŽƚŚĞƌƐŽƵƌĐĞƐƐƵĐŚ 13 ATON IK AT1313 ON IK ŝŶĐƌĞĂƐĞŝŶƉĂLJͲdsƐƵďƐĐƌŝƉƟŽŶ ŝŶŵŽƌĞĚĞƚĂŝůŝŶƐĞĐƟŽŶϭ͘ϭ͘ϰͿ͘ ĂƐdsƐŚŽƉƉŝŶŐ͕ƐƉŽŶƐŽƌƐŚŝƉĂŶĚATON IK ATON IK 13 ϭŚƩƉƐ͗ͬͬǁǁǁ͘ŽĨĐŽŵ͘ŽƌŐ͘ƵŬͬƌĞƐĞĂƌĐŚͲĂŶĚͲĚĂƚĂͬŵƵůƟͲƐĞĐƚŽƌͲƌĞƐĞĂƌĐŚͬĚŝŐŝƚĂůͲĚĂLJ ϭŚƩƉƐ͗ͬͬǁǁǁ͘ŽĨĐŽŵ͘ŽƌŐ͘ƵŬͬƌĞƐĞĂƌĐŚͲĂŶĚͲĚĂƚĂͬŵƵůƟͲƐĞĐƚŽƌͲƌĞƐĞĂƌĐŚͬĚŝŐŝƚĂůͲĚĂLJ D I GITAL D I GITAϮ L D I GITA L D I GITA L ϭ 13 Ϯ ĚƵůƚƐϭϲн͘ĂƐĞĚŽŶǀŝĞǁŝŶŐƚŽƐĐŚĞĚƵůĞĚ͕ďƌŽĂĚĐĂƐƚdsŽŶdsƐĞƚƐŝŶĐůƵĚŝŶŐůŝǀĞĂƚƚŚĞƟŵĞŽĨďƌŽĂĚĐĂƐƚƉůƵƐ ŚƩƉƐ͗ͬͬǁǁǁ͘ŽĨĐŽŵ͘ŽƌŐ͘ƵŬͬƌĞƐĞĂƌĐŚͲĂŶĚͲĚĂƚĂͬŵƵůƟͲƐĞĐƚŽƌͲƌĞƐĞĂƌĐŚͬĚŝŐŝƚĂůͲĚĂLJ13 ĚƵůƚƐϭϲн͘ĂƐĞĚŽŶǀŝĞǁŝŶŐƚƟŵĞͲƐŚŝŌĞĚǀŝĞǁŝŶŐƚŚƌŽƵŐŚsZƐĂŶĚĐĂƚĐŚͲƵƉdsƵƉƚŽƐĞǀĞŶĚĂLJƐĂŌĞƌƚƌĂŶƐŵŝƐƐŝŽŶ͘ŽƐĐŚĞĚƵůĞĚ͕ďƌŽĂĚĐĂƐƚdsŽŶdsƐĞƚƐŝŶĐůƵĚŝŶŐůŝǀĞĂƚƚŚĞƟŵĞŽĨďƌŽĂĚĐĂƐƚƉůƵƐ ƌĞǀĞŶƵĞ͕ƵƉďLJϮ͘ϴйLJĞĂƌŽŶLJĞĂƌ ŝŶƚĞƌĂĐƟǀĞƐĞƌǀŝĐĞƐǁĂƐƵƉďLJ ƟŵĞͲƐŚŝŌĞĚǀŝĞǁŝŶŐƚŚƌŽƵŐŚsZƐĂŶĚĐĂƚĐŚͲƵƉdsƵƉƚŽƐĞǀĞŶĚĂLJƐĂŌĞƌƚƌĂŶƐŵŝƐƐŝŽŶ͘ 13 ϮĚƵůƚƐϭϲн͘ĂƐĞĚŽŶǀŝĞǁŝŶŐƚŽƐĐŚĞĚƵůĞĚ͕ďƌŽĂĚĐĂƐƚdsŽŶdsƐĞƚƐŝŶĐůƵĚŝŶŐůŝǀĞĂƚƚŚĞƟŵĞŽĨďƌŽĂĚĐĂƐƚƉůƵƐ KĨĐŽŵĞƐƟŵĂƚĞƐƚŚĂƚƚŚĞ ƟŵĞͲƐŚŝŌĞĚǀŝĞǁŝŶŐƚŚƌŽƵŐŚsZƐĂŶĚĐĂƚĐŚͲƵƉdsƵƉƚŽƐĞǀĞŶĚĂLJƐĂŌĞƌƚƌĂŶƐŵŝƐƐŝŽŶ͘ ƚŽƌĞĂĐŚάϲ͘ϰďŶ͘/ŶƌĞĐĞŶƚLJĞĂƌƐ͕ ϴ͘ϴйŝŶƌĞĂůƚĞƌŵƐLJĞĂƌŽŶLJĞĂƌĂƚ ĂůůŽĐĂƚĞĚάϮ͘ϱďŶƚŽƚĞůĞǀŝƐŝŽŶ ƚŚĞƌĞŚĂƐďĞĞŶĂƐŵĂůůƌŝƐĞŝŶƚŚĞ άϬ͘ϴďŶ͕ƚŚĞƐĂŵĞĂƐŝƚǁĂƐŝŶϮϬϭϭ͘ ŝŶϮϬϭϲ͕ĂĚƌŽƉŽĨϯ͘ϰйŽŶƚŚĞ 2 Television and audio-visual content Communications Market Report 2017 - United Kingdom

&ŝŐƵƌĞϮ͘ϭϭ͗dŽƚĂůďƌŽĂĚĐĂƐƚdsŝŶĚƵƐƚƌLJƌĞǀĞŶƵĞ͕ďLJƐŽƵƌĐĞ Growth 1 year 5 year KŶůŝŶĞĂƵĚŝŽǀŝƐƵĂůƌĞǀĞŶƵĞƐŐƌĞǁďLJϮϯйŝŶϮϬϭϲďƵƚƌĞŵĂŝŶƐŵĂůůĐŽŵƉĂƌĞĚƚŽƚƌĂĚŝƟŽŶĂůCAGR £13.3bn £13.1bn £13.1bn £13.3bn £13.7bn £13.8bn ƚĞůĞǀŝƐŝŽŶƌĞǀĞŶƵĞƐŽƵƌĐĞƐ 1.0% 0.7% Total £6.4bn £6.0bn £6.0bn £6.2bn ĐĐŽƌĚŝŶŐƚŽŵƉĞƌĞŶĂůLJƐŝƐ͕£5.9bn £5.8bn ŐĞŶĞƌĂƚĞĚάϳϬϬŵŝŶϮϬϭϲ͕ƵƉϭϱй ĂŶĚĚŝŐŝƚĂůƌĞŶƚĂůďŽƚŚĞdžƉĞƌŝĞŶĐĞĚ ŽŶůŝŶĞĂƵĚŝŽǀŝƐƵĂůƌĞǀĞŶƵĞƐ ŽŶƚŚĞƉƌĞǀŝŽƵƐLJĞĂƌ͘^ƵďƐĐƌŝƉƟŽŶ ƐŝŶŐůĞĚŝŐŝƚƉĞƌĐĞŶƚĂŐĞŐƌŽǁƚŚ͘2.8% 1.8% Subscription revenue ŐĞŶĞƌĂƚĞĚďLJƐƵďƐĐƌŝƉƟŽŶƐ͕ ƌĞǀĞŶƵĞĨƌŽŵƐĞƌǀŝĐĞƐƐƵĐŚĂƐ £4.1bn £4.1bntĞĚŝƐĐƵƐƐŚŽǁƚŚĞƚĂŬĞͲƵƉ ĂĚǀĞƌƟƐŝŶŐ͕ƌĞŶƚĂůĂŶĚƌĞƚĂŝů£3.9bn EĞƞůŝdžĂŶĚŵĂnjŽŶWƌŝŵĞsŝĚĞŽ£3.9bn £3.7bn £3.8bn ŽĨŽŶͲĚĞŵĂŶĚĂŶĚƐƚƌĞĂŵŝŶŐNet advertising ŐƌĞǁďLJϮϯйLJĞĂƌŽŶLJĞĂƌŝŶ ǁĂƐƚŚĞƐĞĐŽŶĚůĂƌŐĞƐƚĐŽŶƚƌŝďƵƚŽƌ -0.4% 1.0% ƐĞƌǀŝĐĞƐ͕ŝŶĐůƵĚŝŶŐƐƵďƐĐƌŝƉƟŽŶrevenue ƌĞĂůƚĞƌŵƐ͕ƚŽƌĞĂĐŚάϭ͘ϲϱďŶ͘£2.8bn £2.8bn £2.7bnƚŽƌĞǀĞŶƵĞƐŝŶϮϬϭϲ͕Ăƚάϲϲϰŵ͘dŚŝƐ£2.7bn £2.6bn £2.5bnƐĞƌǀŝĐĞƐƐƵĐŚĂƐEĞƞůŝdžĂŶĚ ƌĞƉƌĞƐĞŶƚĞĚĂŶŶƵĂůŐƌŽǁƚŚŽĨϰϯй KŶůŝŶĞĂĚǀĞƌƟƐĞƌͲĨƵŶĚĞĚǀŝĚĞŽ͕ ŵĂnjŽŶWƌŝŵĞ͕ŝƐĐŚĂŶŐŝŶŐƚŚĞ-3.4% -1.9% BBC income ĂŶĚĂĐŽŵƉŽƵŶĚĂŶŶƵĂůŐƌŽǁƚŚ ŝŶĐůƵĚŝŶŐƐĞƌǀŝĐĞƐƐƵĐŚĂƐzŽƵdƵďĞ͕ dsůĂŶĚƐĐĂƉĞŝŶƚŚĞDĂƌŬĞƚŝŶallocated to TV £0.8bn £0.8bn £0.7bnƌĂƚĞŽĨϭϭϳйŽǀĞƌƚŚĞůĂƐƚĮǀĞLJĞĂƌƐ͘£0.7bn £0.7bn £0.8bn 51 ƚŚĞ/ds,Ƶď͕ůůϰĂŶĚDLJϱ ŽŶƚĞdžƚƐĞĐƟŽŶŽĨƚŚŝƐƌĞƉŽƌƚ͘ ŝŐŝƚĂůƌĞƚĂŝů;ĚŽǁŶůŽĂĚƚŽŽǁŶͿ 8.8% -0.2% Other revenue 51 2011 2012 2013 2014 2015 2016 51 &ŝŐƵƌĞϮ͘ϭϯ͗KŶůŝŶĞĂƵĚŝŽǀŝƐƵĂůƌĞǀĞŶƵĞƐ Source:KĨĐŽŵͬďƌŽĂĚĐĂƐƚĞƌƐ͘ Note: Growth 51 &ŝŐƵƌĞƐĞdžƉƌĞƐƐĞĚŝŶƌĞĂůƚĞƌŵƐ;ϮϬϭϲƉƌŝĐĞƐͿĂŶĚƌĞƉůĂĐĞƉƌĞǀŝŽƵƐKĨĐŽŵƌĞǀĞŶƵĞĚĂƚĂĨŽƌdsŝŶĚƵƐƚƌLJ͕ŽǁŝŶŐƚŽƌĞƐƚĂƚĞŵĞŶƚƐ ĂŶĚŝŵƉƌŽǀĞŵĞŶƚƐŝŶŵĞƚŚŽĚŽůŽŐŝĞƐ͚͘^ƵďƐĐƌŝƉƟŽŶƌĞǀĞŶƵĞ͛ŝŶĐůƵĚĞƐKĨĐŽŵ͛ƐĞƐƟŵĂƚĞƐŽĨ^ŬLJh<͕sŝƌŐŝŶDĞĚŝĂ͕ddsĂŶĚdĂůŬdĂůŬ1 year 5 year ƐƵďƐĐƌŝďĞƌƌĞǀĞŶƵĞĂƐǁĞůůĂƐ͕ŝŶƉƌĞǀŝŽƵƐLJĞĂƌƐ͕ƚŚĂƚŽĨ^WEĂŶĚdŽƉhƉdsŝŶƚŚĞh<;ZĞƉƵďůŝĐŽĨ/ƌĞůĂŶĚƌĞǀĞŶƵĞŝƐĞdžĐůƵĚĞĚͿ͘/ƚCAGR 51 ĂůƐŽĞdžĐůƵĚĞƐƌĞǀĞŶƵĞŐĞŶĞƌĂƚĞĚďLJďƌŽĂĚďĂŶĚĂŶĚƚĞůĞƉŚŽŶLJ͘ŝŶĐŽŵĞĂůůŽĐĂƚĞĚƚŽdsŝŶĐůƵĚĞƐŵŽŶĞLJĂůůŽĐĂƚĞĚƚŽ^ϰĂƐǁĞůů ĂƐƚĞůĞǀŝƐŝŽŶďƌŽĂĚĐĂƐƟŶŐ͚͘KƚŚĞƌ͛ŝŶĐůƵĚĞƐdsƐŚŽƉƉŝŶŐ͕ƐƉŽŶƐŽƌƐŚŝƉ͕ŝŶƚĞƌĂĐƟǀĞ;ŝŶĐůƵĚŝŶŐƉƌĞŵŝƵŵͲƌĂƚĞƚĞůĞƉŚŽŶLJƐĞƌǀŝĐĞƐͿ͕£1,653m 23% 43% Total 51 ƉƌŽŐƌĂŵŵĞƐĂůĞƐĂŶĚ^ϰ͛ƐŐƌĂŶƚĨƌŽŵƚŚĞD^͘dŽƚĂůƐŵĂLJŶŽƚĞƋƵĂůƚŚĞƐƵŵŽĨƚŚĞĐŽŵƉŽŶĞŶƚƐĚƵĞƚŽƌŽƵŶĚŝŶŐ͘ £1,330m 51 Ad funded £700m 15% 38% video 51 £903m £604m 43% 117% OTT Subscription £594m £400m £664m 9% 20% Digit al Rent al £367m £264m £461m £252m £267m £170m £153m £128m £96m £107m £118m £52m £69m £62m £158m £171m 7% 19% Digit al Ret ail £67m £83m £108m £140m 2011 2012 2013 2014 2015 2016

Source: ŵƉĞƌĞŶĂůLJƐŝƐͬĞŶŝƚŚKƉƟŵĞĚŝĂ͘ĚͲĨƵŶĚĞĚǀŝĚĞŽŝŶĐůƵĚĞƐĐĂƚĐŚͲƵƉƐĞƌǀŝĐĞƐ͕zŽƵdƵďĞĂŶĚŽƚŚĞƌĂĚͲĨƵŶĚĞĚǀŝĚĞŽƐƉĞŶĚ͘ Kdd^ƵďƐĐƌŝƉƟŽŶŝŶĐůƵĚĞƐEĞƞůŝdž͕ŵĂnjŽŶWƌŝŵĞsŝĚĞŽ͕ŝƐŶĞLJůŝĨĞĂŶĚEŽǁds͘ŝŐŝƚĂůƌĞŶƚĂůŝŶĐůƵĚĞƐŽŶĞͲŽīƉĂLJͲƉĞƌͲǀŝĞǁŽĨĮůŵƐ ĂŶĚǀŝĚĞŽďƵƚĞdžĐůƵĚĞƐƐƉŽƌƚ͘ŝŐŝƚĂůZĞƚĂŝůĮŐƵƌĞŝƐďĂƐĞĚŽŶƚŚĞƌŝƟƐŚƐƐŽĐŝĂƟŽŶŽĨ^ĐƌĞĞŶŶƚĞƌƚĂŝŶŵĞŶƚƐƉĞŶĚĮŐƵƌĞƐĞdžĐůƵƐŝǀĞ ŽĨsdĂŶĚĐŽǀĞƌƐ͚ĚŽǁŶůŽĂĚƚŽŽǁŶ͛ƉƵƌĐŚĂƐĞƐ͘ůůĮŐƵƌĞƐĂƌĞŝŶƌĞĂůƚĞƌŵƐ;ϮϬϭϲƉƌŝĐĞƐͿ͘ Note:&ŝŐƵƌĞĨŽƌϮϬϭϭĂĚĨƵŶĚĞĚǀŝĚĞŽŝƐĂŶĞƐƟŵĂƚĞĂƐĂĐƚƵĂůĮŐƵƌĞƐĂƌĞŶŽƚĂǀĂŝůĂďůĞ͘

53

53

53

53

53

53

53

53 2 Television and audio-visual content Communications Market Report 2017 - United Kingdom

dŚĞƚŽƉϮϬĐŚĂŶŶĞůƐƌĞŇĞĐƚƚŚĞŽůĚĞƌƉƌŽĮůĞŽĨƚƌĂĚŝƟŽŶĂůds

&ŝŐƵƌĞϮ͘ϰϲƉůŽƚƐƚŚĞĂŐĞĂŶĚ ZĞŇĞĐƟŶŐƚŚĞŽůĚĞƌƉƌŽĮůĞŽĨds ĂŶĚϵϰйŽĨǁŚŽƐĞĂƵĚŝĞŶĐĞƐ ƐŽĐŝŽͲĞĐŽŶŽŵŝĐ;^'ͿϭƉƌŽĮůĞŽĨ ŽǀĞƌĂůů͕ŵŽƐƚŽĨƚŚĞƚŽƉϮϬĐŚĂŶŶĞůƐ ƌĞƐƉĞĐƟǀĞůLJǁĞƌĞĂŐĞĚϯϱĂŶĚŽǀĞƌͿ͘ ƚŚĞϮϬŵŽƐƚͲǁĂƚĐŚĞĚĐŚĂŶŶĞůƐŝŶ ŝŶϮϬϭϲŚĂĚĂƵĚŝĞŶĐĞƐƚŚĂƚǁĞƌĞ ŚĂŶŶĞůƐĨƌŽŵƚŚĞ͕^ŬLJ ϮϬϭϲ͕ƌĞůĂƟǀĞƚŽƚŚĞϯϱнĂŐĞĂŶĚ ŽůĚĞƌŽƌƚŚĞƐĂŵĞĂƐƚŚĞĂǀĞƌĂŐĞ͘ ĂŶĚŚĂŶŶĞůϰĂƩƌĂĐƚĞĚŚŝŐŚĞƌ ϭ^'ƉƌŽĮůĞŽĨĂůůǀŝĞǁĞƌƐ dŚŝƐǁĂƐƉĂƌƟĐƵůĂƌůLJƚŚĞĐĂƐĞĨŽƌ ƉƌŽƉŽƌƟŽŶƐŽĨϭĂƵĚŝĞŶĐĞƐ ƚŽƚŽƚĂůds͘/ƚĂůƐŽƐŚŽǁƐƚŚĞ ƚŚŽƐĞĐŚĂŶŶĞůƐǁŝƚŚƚŚĞůĂƌŐĞƐƚ ƚŚĂŶdsŐĞŶĞƌĂůůLJ;ϰϱйͿ͘KĨ ƐŚĂƌĞŽĨĞĂĐŚĐŚĂŶŶĞů͕ĚĞƉŝĐƚĞĚ ƐŚĂƌĞŽĨǀŝĞǁŝŶŐ͕ŝŶĐůƵĚŝŶŐ ƚŚĞƚŽƉϮϬŵŽƐƚͲǁĂƚĐŚĞĚ ďLJƚŚĞƐŝnjĞŽĨƚŚĞďƵďďůĞƐ͘dŚĞ KŶĞ͕/dsĂŶĚdǁŽ͘ƉĂƌƚĨƌŽŵ ĐŚĂŶŶĞůƐ͕&ŽƵƌŚĂĚƚŚĞ ƉƌŽĮůĞŽĨĂĐŚĂŶŶĞůŐŝǀĞƐĂŶ ĞĞďŝĞƐ;ƚŚĞĚĞĚŝĐĂƚĞĚĐŚŝůĚƌĞŶ͛Ɛ ďŝŐŐĞƐƚϭƉƌŽĮůĞ͕Ăƚϱϵй͘ ŝŶĚŝĐĂƟŽŶŽĨŝƚƐƚĂƌŐĞƚĂƵĚŝĞŶĐĞ͕ ĐŚĂŶŶĞůĨŽƌϬͲϲLJĞĂƌŽůĚƐĨƌŽŵ ĂŶĚĨŽƌĐŽŵŵĞƌĐŝĂůĐŚĂŶŶĞůƐ͕ ƚŚĞͿ͕ƚŚĞĐŚĂŶŶĞůǁŝƚŚƚŚĞ ZĞŇĞĐƟŶŐƚŚĞŝƌŐƌĞĂƚĞƌƌĞĂĐŚ͕Ăůů ƚŚŝƐŝƐƵƐĞĚƚŽƐĞůůĂĚǀĞƌƟƐŝŶŐ͘ LJŽƵŶŐĞƐƚƉƌŽĮůĞǁĂƐϰ;ϰϯйŽĨ ƚŚĞƚŽƉϮϬĐŚĂŶŶĞůƐĂƉĂƌƚĨƌŽŵ^ŬLJ ŝƚƐĂƵĚŝĞŶĐĞǁĂƐĂŐĞĚƵŶĚĞƌϯϱͿ KŶĞĂŶĚ^ŬLJ^ƉŽƌƚƐϭĂƌĞĂǀĂŝůĂďůĞ ǁŚŝůĞƚŚĞĐŚĂŶŶĞůƐǁŝƚŚƚŚĞŽůĚĞƐƚ ǁŝƚŚŽƵƚĂƉĂLJͲdsƐƵďƐĐƌŝƉƟŽŶ͘ ƉƌŽĮůĞǁĞƌĞ/dsϯĂŶĚƌĂŵĂ;ϵϱй

&ŝŐƵƌĞϮ͘ϰϲ͗ŐĞĂŶĚƐŽĐŝŽͲĞĐŽŶŽŵŝĐĂƵĚŝĞŶĐĞƉƌŽĮůĞŽĨƚŚĞϮϬŵŽƐƚͲǀŝĞǁĞĚĐŚĂŶŶĞůƐ͗ϮϬϭϲ

Higher % ABC1 100

90

80

70 BBC One BBC Four Lower % 60 Higher Channel 4 BBC Two BBC News 35+ CBeebies % 35+ Sky1 M ore4 Sk y Sp o r t s 1 50 Sky News E4 Dr ama 0 10 20 30 40 50 60 70 80 90 100 Dave 40 Channel 5 ITV3 Film4 ITV2 30 ITV4 ITV 5 USA

20

10

Lower % ABC1 87 0

87 Source: ZͬdZWZĞƐĞĂƌĐŚ͘/ŶĚŝǀŝĚƵĂůƐϰн͘ĂƐĞĚŽŶƚŚĞƚŽƉϮϬĐŚĂŶŶĞůƐƌĂŶŬĞĚďLJƐŚĂƌĞ͕ĞdžĐůƵĚŝŶŐŝŶĚŝǀŝĚƵĂůůLJƌĞƉŽƌƚĞĚнϭ ĐŚĂŶŶĞůƐ͘^ŝnjĞŽĨďƵďďůĞƌĞůĂƚĞƐƚŽƐŚĂƌĞĂŵŽŶŐŝŶĚŝǀŝĚƵĂůƐϰн͘WƌŽĮůĞďĂƐĞĚŽŶĂŐĞ͗йϯϱн͕ƐŽĐŝĂů͗йϭŝŶĚŝǀŝĚƵĂůƐ͘džĞƐĐƌŽƐƐĂƚ 87 ƚŚĞĂǀĞƌĂŐĞĂŐĞͬ^'ƉƌŽĮůĞŽĨdŽƚĂůds͘/ŶĐůƵĚĞƐ,ǀĂƌŝĂŶƚƐǁŚĞƌĞĂƉƉůŝĐĂďůĞ͕ĞdžĐůƵĚĞƐнϭǀĂƌŝĂŶƚƐ͘

87

87

87

87

ϭĐůĂƐƐŝĮĐĂƟŽŶŽĨŚŽƵƐĞŚŽůĚƐŽĐŝĂůƐƚĂƚƵƐďĂƐĞĚŽŶƚŚĞŽĐĐƵƉĂƟŽŶŽĨƚŚĞĐŚŝĞĨŝŶĐŽŵĞĞĂƌŶĞƌ͘ZƌĞƉŽƌƚƐƚŚĞĨŽůůŽǁŝŶŐƐŽĐŝĂůŐƌĂĚĞƐ͗ʹŚŝŐŚĞƌ 87 ;ͿŽƌŝŶƚĞƌŵĞĚŝĂƚĞ;ͿŵĂŶĂŐĞƌŝĂů͕ĂĚŵŝŶŝƐƚƌĂƟǀĞŽƌƉƌŽĨĞƐƐŝŽŶĂů͖ϭʹƐƵƉĞƌǀŝƐŽƌLJŽƌĐůĞƌŝĐĂůĂŶĚũƵŶŝŽƌŵĂŶĂŐĞƌŝĂů͕ĂĚŵŝŶŝƐƚƌĂƟǀĞŽƌƉƌŽĨĞƐƐŝŽŶĂů͖yOUTUBE ϮʹƐŬŝůůĞĚŵĂŶƵĂůǁŽƌŬĞƌƐ͖ʹƐĞŵŝͲƐŬŝůůĞĚĂŶĚƵŶƐŬŝůůĞĚǁŽƌŬĞƌƐ͖ʹƐƚĂƚĞƉĞŶƐŝŽŶĞƌƐ͕ĐĂƐƵĂůŽƌůŽǁĞƐƚŐƌĂĚĞǁŽƌŬĞƌƐ͖

2 Television and audio-visual content ofcom.org.uk 4

Use of on-demand and streaming services to watch TV programmes/ USE OF ON-DEMAND AND STREAMING STREAMING SERVICES TO WATCH TV PROGRAMMES &ŝŐƵƌĞϮ͘Ϯ͗hƐĞŽĨŽŶͲĚĞŵĂŶĚĂŶĚƐƚƌĞĂŵŝŶŐƐĞƌǀŝĐĞƐƚŽǁĂƚĐŚdsƉƌŽŐƌĂŵŵĞƐͬĮůŵƐfilms

66% 63% 66% Adults Teens 63% Adults Teens 54% 54% 46% 46% 40% 38% 40% 38% 32% 31% 32% 26% 31% 26% 20% 18% 18% 18% 20% 15% 18% 18% 15% 18% 12% 15% 10% 10% 15% 12% 10% 5%6%10% 5% 6% 2% 5%6%1% 5% 1% 2% 6% 2% 1% 1%2% BBC ITV Hub YouTube Netflix All4 Amazon My5 Sky Go NOW TV BT TV WWE Disney Hayu iPlayer BBC ITV Hub YouTube Netflix All4 Amazon My5 Sky OnlineGo NOWNetwork BT TVLi f e WWE Disne Hayu iPlayer TV Online Network y Player **+!%,!-./01!2#32!()!45'!678!$%59#59!%5!:%;!9;<#! Source:ŽŶƐƵŵƉƟŽŶŽĨsŽŽŶƚĞŶƚDZZĞƐĞĂƌĐŚϮϬϭϳʹWŽƉƵůƵƐ Player Life Yϱ͘dŚŝŶŬŝŶŐĂďŽƵƚǁŚĞŶLJŽƵǁĂƚĐŚdsƉƌŽŐƌĂŵŵĞƐͬĮůŵƐ͕ĚŽLJŽƵƵƐĞĂŶLJŽĨƚŚĞĨŽůůŽǁŝŶŐ͍+,-./012!"#$%&'("#)"*)+",)!"#-.#-)!/0)0.$.1234)5678)9):"'%;%$< =%;&$#>!?%8@$&%&#!)#&28#&2A!0B-C! Base:ĚƵůƚƐ;ϮϯϱϲͿdĞĞŶƐ;ϱϬϱͿ3+42=4>#?>#@)1A"%-)B4.#)C"%)B1-34)=+)'2"@21&&.$DE;&$F)G")C"%)%$.)1#C)"*)-4.)*";;"B>#@H< 567012IG%;-$)J5KLMN)=..#$)JL6LN<

OTTŵĂnjŽŶ͛ƐƐƵďƐĐƌŝƉƟŽŶŐƌŽǁƚŚŽƵƚƉĂĐĞĚƚŚĂƚŽĨEĞƞůŝdžŝŶϮϬϭϲ SERVICES DELIVERING STRONG NPS WITH YOUTH DEMOGRAPHIC UK MILLENNIALS:UK MILLENNIALS: SERVICES SERVICESTAKE-UP AND TAKE-UP NPS AND NPS UK 55 – 65 UKYEAR 55- –OLDS: 65 YEAR-OLDS: SERVICES TAKESERVICES-UP AND TAKE-UP NPS AND dŚĞƚǁŽůĞĂĚŝŶŐƉƵƌĞƐƵďƐĐƌŝƉƟŽŶPay TV — Free TVPay — TVSubscription — Free TV — OTT SubscriptioƋƵĂƌƚĞƌŽĨƚŚĞLJĞĂƌ͕ĂĐĐŽƌĚŝŶŐƚŽn OTT ǁŚŝĐŚŽīĞƌƐĨƌĞĞŶĞdžƚͲĚĂLJĚĞůŝǀĞƌLJPay TV — Free NPSTV — Subscription OTT

ŽŶͲĚĞŵĂŶĚĂŶĚƐƚƌĞĂŵŝŶŐ70% 70% ĞƐƟŵĂƚĞƐĨƌŽŵŵƉĞƌĞŶĂůLJƐŝƐ͕ ŽŶĞůŝŐŝďůĞƉƵƌĐŚĂƐĞƐ͘ŵĂnjŽŶNetflix Net flix Pay TV — Free TV — Subscription OTT

24 y.o. 24 Freeview Fre eview -

ƐĞƌǀŝĐĞƐŝŶƚŚĞh<ĐŽŶƟŶƵĞĚƚŽ ǁŝƚŚLJĞĂƌͲŽŶͲLJĞĂƌŐƌŽǁƚŚŽĨϭϳй͘ ŵŽƌĞƚŚĂŶĚŽƵďůĞĚŝƚƐƐƵďƐĐƌŝƉƟŽŶ- 65 y.o. 50% 50% ďĞEĞƞůŝdžĂŶĚŵĂnjŽŶWƌŝŵĞ60% 60% ďĂƐĞŽǀĞƌϮϬϭϲ͕ƚŽĂŶĞƐƟŵĂƚĞĚ ŵĂnjŽŶ͛ƐǀŝĚĞŽƐĞƌǀŝĐĞŝƐƌŽůůĞĚ ŝŶϮϬϭϲ͘EĞƞůŝdžŚĂĚŶĞĂƌůLJϲ͘Ϭ ϯ͘ϴŵŝůůŝŽŶƐƵďƐĐƌŝďĞƌƐƚŽŵĂnjŽŶ 50% 50% ƵƉŝŶƚŽƚŚĞŵĂnjŽŶWƌŝŵĞƉƌŽĚƵĐƚ 40% 40% Share amongst 18-24 y.o. Share 18 Share amongst Sky Share amongst 55-65 y.o. ŵŝůůŝŽŶƐƵďƐĐƌŝďĞƌƐďLJƚŚĞĮŶĂů WƌŝŵĞďLJƚŚĞĞŶĚŽĨƚŚĞLJĞĂƌ͘ Share amongst 55 Sky Amazo n Prime Vi deo Sky Amazon Prime Video Sky 40% 40% Freeview 30% 30% Freeview &ŝŐƵƌĞϮ͘ϯ͗KŶͲĚĞŵĂŶĚͬƐƚƌĞĂŵŝŶŐƐĞƌǀŝĐĞƐƵďƐĐƌŝƉƟŽŶŶƵŵďĞƌƐ͗ϮϬϭϰͲϮϬϭϲ;ϬϬϬƐͿ 30% 30% Virgin Media

Now TV Virgin Media 20% 20% BT 2014 2015 2016 Netflix Amazon Pri me 20% 20% Now TV ATON IK ATON IK Netflix Amazon Prime Video o Freesat BT YouView Virgin Media Vide at Talk Talk BT D I GITA L FreesD I GITA L Virgin Media Freesat

EE 2017 Freesat 10% 10% BT Now TV 10% 10% Other free satellite 2017 YouView 5,995 TalkNow Talk TV Talk Talk EE Talk Talk YouView EE Other free satellite Other free satellite YouView EE Other free satellite 0% 0% 5,111 -55 -45 -55 -35 -45 -25 -35 -15 -25 -5 -15 5 -5 15 5 25 15 35 25 35 0% 0% Net Promoter Score Net Promoter Score -40 40 -30-40 -20-30 -10-20 0-10 10 0 2010 3020 30 © Ampere Analysis Analysis Ampere © Net Promoter Score Net Promoter Score © Ampere Analysis Ampere © Analysis

3,841 40 Understanding the Future3,631 of Entertainment 10 Source: Ampere Consumer Focus Report Understanding the Future of Entertainment 11 2017 40

40 YOUNGER AUDIENCEHIGH NPS VIEWING FOR1,673 OTT SHIFTING SERVICES ACROSS WITH DEVICESYOUNGER AND AUDIENCES PLATFORMS WITH VIEWING SHIFTING1,052 ACROSS DEVICES AND PLATOFORM40 40 ATON IK ATON IK D I GITA L D I GITA L Netflix Amazon Prime 40 ATONIK Source: Ampere Consumer Focus Report 2017 D I GITAL Source: ŵƉĞƌĞŶĂůLJƐŝƐ Note:ĂƚĂƉŽŝŶƚƐĂƌĞĨƌŽŵYϰĞĂĐŚLJĞĂƌ͘ 40 ATON IK ATON IK D I GITA L D I GITA L

2 Television and audio-visual content ofcom.org.uk

CommunicationsATON IK Market Report 2017AT O- UnitedN IK Kingdom 2 Television and audio-visual content D I GITA L D I GITA L

^ƉĞŶĚŽŶh<ͲŽƌŝŐŝŶĂƚĞĚƉƌŽŐƌĂŵŵŝŶŐďLJƚŚĞŵĂŝŶĮǀĞW^ĐŚĂŶŶĞůƐǁĂƐĂƚŝƚƐŚŝŐŚĞƐƚůĞǀĞů5 DĂŶLJƉĞŽƉůĞƐƵďƐĐƌŝďĞƚŽŵŽƌĞƚŚĂŶŽŶĞŽŶͲĚĞŵĂŶĚͬƐƚƌĞĂŵŝŶŐƐĞƌǀŝĐĞƐŝŶĐĞϮϬϭϮ Use of on-demand and streaming services to watch TV programmes/ UK subscription OTT subscriber trends films KǀĞƌĂůůƐƉĞŶĚŽŶĮƌƐƚͲƌƵŶh<Ͳ ^ƉĞŶĚŽŶƉĞĂŬƟŵĞƉƌŽŐƌĂŵŵŝŶŐ ŽƌŝŐŝŶĂůƐƉŽƌƚƐĐŽŶƚĞŶƚŝŶĚĂLJƟŵĞ LJƚŚĞĞŶĚŽĨϮϬϭϲ͕ĨŽƵƌŝŶƚĞŶ ŵŽƐƚƉŽƉƵůĂƌĐŽŵďŝŶĂƟŽŶǁĂƐ ŝŐŚƚƉĞƌĐĞŶƚŽĨĂůůƵƐĞƌƐŽĨEĞƞůŝdž͕ŽƌŝŐŝŶĂƚĞĚƉƌŽŐƌĂŵŵŝŶŐ;ŝŶĐůƵĚŝŶŐ ĂŶĚŶĂƟŽŶƐ͛ĂŶĚƌĞŐŝŽŶƐ͛ ĂŶĚůĂƚĞŶŝŐŚƚǁŚĞŶĐŽǀĞƌŝŶŐƚŚĞ 66% 23% 17% 63% Adults Teens ƵƐĞƌƐŽĨEĞƞůŝdž͕ŵĂnjŽŶWƌŝŵĞ EĞƞůŝdžĂŶĚŵĂnjŽŶWƌŝŵĞ͕ǁŝƚŚ ŵĂnjŽŶWƌŝŵĞĂŶĚEKtdsŚĂĚŶĂƟŽŶƐ͛ĂŶĚƌĞŐŝŽŶƐ͛ƉƌŽŐƌĂŵŵŝŶŐͿ ƉƌŽŐƌĂŵŵŝŶŐǁĂƐďƌŽĂĚůLJƐƚĂďůĞ͕ ϮϬϭϲh&ƵƌŽƉĞĂŶ&ŽŽƚďĂůů 26% ďLJƚŚĞŵĂŝŶĮǀĞW^ĐŚĂŶŶĞůƐʹ ǁŚŝůĞƐƉĞŶĚŽŶůĂƚĞͲŶŝŐŚƚĂŶĚ ŚĂŵƉŝŽŶƐŚŝƉƐĂŶĚƚŚĞZŝŽ 54% ĂŶĚEKtdsŚĂĚĂĐĐĞƐƐƚŽŵŽƌĞPay TV Growth stallingϮϲйŽĨƵƐĞƌƐƵƐŝŶŐďŽƚŚƐĞƌǀŝĐĞƐ with 15.9m subs ĂĐĐĞƐƐƚŽĂůůƚŚƌĞĞƐĞƌǀŝĐĞƐŝŶƚŚĞ 36% KŶĞ͕dǁŽ͕/ds;ŝŶĐůƵĚŝŶŐ ĚĂLJƟŵĞƉƌŽŐƌĂŵŵŝŶŐŐƌĞǁďLJ KůLJŵƉŝĐĂŶĚWĂƌĂůLJŵƉŝĐ'ĂŵĞƐ͘ 46% Rapid growth of OTT SVOD services ƚŚĂŶŽŶĞŽĨƚŚĞƐĞƐĞƌǀŝĐĞƐ͘dŚĞ ŝŶƚŚĞĮŶĂůƋƵĂƌƚĞƌŽĨϮϬϭϲ͘ ĮŶĂůƚŚƌĞĞŵŽŶƚŚƐŽĨϮϬϭϲ͘/dsƌĞĂŬĨĂƐƚͿͬ^dsͬhds͕ŚĂŶŶĞůϰ ϯϭйĂŶĚϰйƌĞƐƉĞĐƟǀĞůLJŝŶƌĞĂů 40% 74% of SVOD OTT subs take Pay TV 38% 43% KǀĞƌůĂƉďĞƚǁĞĞŶƐƵďƐĐƌŝďĞƌƐŽĨĂŶĚŚĂŶŶĞůϱʹŝŶĐƌĞĂƐĞĚďLJϰй ƚĞƌŵƐ͘dŚŝƐŵĂLJďĞĚƵĞŝŶƉĂƌƚƚŽ 32% 31% 30% ŝŶƌĞĂůƚĞƌŵƐƚŽάϮ͕ϳϬϴŵŝŶϮϬϭϲ͘ ďƌŽĂĚĐĂƐƚĞƌƐŝŶĐƌĞĂƐŝŶŐƐƉĞŶĚŽŶ 26% 20% ƚŚĞŵĂŝŶƚĞůĞǀŝƐŝŽŶƐƵďƐĐƌŝƉƟŽŶ 18% 18% 18% 12% 14% 15% 15% &ŝŐƵƌĞϮ͘ϰ͗^ƵďƐĐƌŝƉƟŽŶŽŶͲĚĞŵĂŶĚĂŶĚƐƚƌĞĂŵŝŶŐƐĞƌǀŝĐĞƐŽǀĞƌůĂƉ 12% 10% 10% Q3 2016 Q3 2017 5%6% 5% 6% services in the UK &ŝŐƵƌĞϮ͘ϭϴ͗^ƉĞŶĚŽŶĮƌƐƚͲƌƵŶh<ŽƌŝŐŝŶĂƚĞĚŽƵƚƉƵƚŽŶƚŚĞĮǀĞŵĂŝŶW^ĐŚĂŶŶĞůƐ 2% 1% 1%2% sOTT only sOTT and Pay TV/Premium Growth BBC ITV Hub YouTube Netflix All4 Amazon My5 Sky Go NOW BT TV WWE Disne Hayu Pay TV / Premium Channels only iPlayer TV Online Network y **+!%,!-./01!2#32!()!45'!678!$%59#59!%5!:%;!9;<#! no sub/free only Player Life 1 year 5 year +,-./012!"#$%&'("#)"*)+",)!"#-.#-)!/0)0.$.1234)5678)9):"'%;%$< =%;&$#>!?%8@$&%&#!)#&28#&2A!0B-C! £2,702m £2,712m £2,708m CAGR 3+42=4>#?>#@)1A"%-)B4.#)C"%)B1-34)=+)'2"@21&&.$DE;&$F)G")C"%)%$.)1#C)"*)-4.)*";;"B>#@H< UK subscription service takeup £2,610m £2,595m 567012IG%;-$)J5KLMN)=..#$)JL6LN< £2,506m Total Amazon £288m £279m £276m 4% 0% 20% 43% 20% 36% EĞƞůŝdž £286m £272m £269m £269m £277m Prime £267m £245m £212m 26% £234m 2% -0.9% +0pp +13 pp Nat i ons & £607m £591m £553m £541m £562m Regions UK MILLENNIALS: SERVICES TAKE-UP AND NPS UK 55 – 65 YEAR-OLDS: SERVICES TAKE-UP AND £495m Pay TV — Free TV — Subscription OTT 15% 30% NPS 31% 0.8% Late night 70% Net flix Pay TV — Free TV — Subscription OTT 8% Fre eview 2% 50% +5pp 60% +15pp 4% 4% -1.5% Day t i me £1,574m £1,569m £1,592m 50% 40% £1,541m £1,509m £1,526m Share amongst 18-24 y.o. Sky 42% 4% Share amongst 55-65 y.o. 20% Amazo n Prime Vi deo Sky 40% Freeview 30% 1% 0.7% Peak time +0pp +0pp 30% Now TV Virgin Media

Now TV 20% BT Netflix Amazon Pri me 20% ATON IK ATON IK 15% 25% ATON IK 2011 ATO2012N IK 2013 2014 2015 2016 o Freesat 2017 YouView Virgin Media Vide at Talk Talk BT D I GITAL FreesD I GITA L D I GITA L D I GITA L EE Source: 10% Now TV 2016 'Ĩ<^sŽdƌĂĐŬĞƌ͕YϰϮϬϭϲKĐƚŽďĞƌͲĞĐĞŵďĞƌϮϬϭϲ 10% Other free satellite Talk Talk Source: KĨĐŽŵͬďƌŽĂĚĐĂƐƚĞƌƐ͘

Other free satellite YouView EE -1pp +3pp Notes:tϭ͗ZĞĂƐŽŶƐĨŽƌƐŝŐŶŝŶŐƵƉĨŽƌͬƵƐŝŶŐƐĞƌǀŝĐĞ Note: &ŝŐƵƌĞƐĂƌĞĞdžƉƌĞƐƐĞĚŝŶƌĞĂůƚĞƌŵƐ;ϮϬϭϲƉƌŝĐĞƐͿ͘dŚĞLJŝŶĐůƵĚĞ/dsďƌĞĂŬĨĂƐƚ͕ƐƉĞŶĚŝŶŐŝŶƚŚĞŶĂƟŽŶƐĂŶĚƌĞŐŝŽŶƐŽŶŶŐůŝƐŚͲ 0% -55 -45 -35 -25 -15 -5 5 15 25 35 0% ůĂŶŐƵĂŐĞƉƌŽŐƌĂŵŵŝŶŐ;ĂŶĚĂƐŵĂůůĂŵŽƵŶƚŽĨ/ƌŝƐŚͲůĂŶŐƵĂŐĞƉƌŽŐƌĂŵŵĞƐͿďƵƚĚŽŶŽƚŝŶĐůƵĚĞƚŚĞ͛ƐƉŽƌƞŽůŝŽĐŚĂŶŶĞůƐ͕ůďĂ Net Promoter Score -40 -30 -20 -10 0 10 20 30 Base:EĞƞůŝdžƵƐĞƌƐ;ŶсϭϲϳϬ;ϭϯϴƚƌŝĂůůŝƐƚƐͿͿ͕ŵĂnjŽŶWƌŝŵĞsŝĚĞŽƵƐĞƌƐ;ŶсϭϮϱϱ;ϭϱϲƚƌŝĂůůŝƐƚƐͿͿ͕EKtdsƵƐĞƌƐ;ŶсϰϮϯ Net Promoter Score US SVOD platforms making significant ;ϴϬƚƌŝĂůůŝƐƚƐͿͿSource: Ofcom, The Communication Market Report Aug 2017 Žƌ^ϰ͘ global investment in original production Source: Ampere Consumer Focus Report Note:hƐĞƌƐŝŶĐůƵĚĞƚŚŽƐĞǁŚŽĞŝƚŚĞƌƐƵďƐĐƌŝďĞƚŽŽƌĂƌĞƚƌŝĂůůŝŶŐĞĂĐŚƐĞƌǀŝĐĞĂŶĚƵƐĞŝƚĂƚůĞĂƐƚŽŶĐĞĂĨŽƌƚŶŝŐŚƚ͘ 58 2017 Source: Ampere Consumer Focus Report 2017 58 HIGH NPS FOR OTT SERVICES WITH YOUNGER AUDIENCES WITH VIEWING GROWTH OF SVOD OTT SERVICES APPEARS TO BE SHIFTING ACROSS DEVICES AND PLATOFORM SUPPLEMENTAL TO TRADITIONAL PAY TV SUBSCRIPTIONS 58 ATON IK ATON IK LIMITED CURRENT EVIDENCE OF CORD CUTTING IN THEAT OUKN IK ATON IK D I GITAL D I GITA L D I GITA L D I GITA L 58 ATONIK D I GITAL 58

58

58

58

41

41

41

41

41

41

41

41 Communications Market Report 2017 - United Kingdom 1 1 UnitedUnited Kingdom’s Kingdom’s communications communications market market Communications Market Report 2017 - United Kingdom 1 United Kingdom’s communications market Communications Market Report 2017 - United Kingdom

1.4.21.4.2 The The services services people people use use 1.4.2 The services people use KŶͲĚĞŵĂŶĚĂŶĚƐƚƌĞĂŵŝŶŐĂƌĞďĞĐŽŵŝŶŐŵŽƌĞŵĂŝŶƐƚƌĞĂŵKŶͲĚĞŵĂŶĚĂŶĚƐƚƌĞĂŵŝŶŐĂƌĞďĞĐŽŵŝŶŐŵŽƌĞŵĂŝŶƐƚƌĞĂŵ KŶͲĚĞŵĂŶĚĂŶĚƐƚƌĞĂŵŝŶŐĂƌĞďĞĐŽŵŝŶŐŵŽƌĞŵĂŝŶƐƚƌĞĂŵ Ϯ tŚŝůĞϵϭйŽĨh<ĂĚƵůƚƐǁĂƚĐŚĞĚtŚŝůĞϵϭйŽĨh<ĂĚƵůƚƐǁĂƚĐŚĞĚ ĂĚƵůƚ;ϭϲнͿƉĞƌĚĂLJŝŶϮϬϭϲĂĚƵůƚ;ϭϲнͿƉĞƌĚĂLJŝŶϮϬϭϲϮ͘ ͘ ĂĚƵůƚƐĐŝƟŶŐƚŚŝƐ͕ĨŽůůŽǁĞĚďLJ/dsĂĚƵůƚƐĐŝƟŶŐƚŚŝƐ͕ĨŽůůŽǁĞĚďLJ/ds tŚŝůĞϵϭйŽĨh<ĂĚƵůƚƐǁĂƚĐŚĞĚůŝǀĞdsŝŶĂŶĂǀĞƌĂŐĞǁĞĞŬŝŶĂĚƵůƚ;ϭϲнͿƉĞƌĚĂLJŝŶϮϬϭϲϮ͘ ĂĚƵůƚƐĐŝƟŶŐƚŚŝƐ͕ĨŽůůŽǁĞĚďLJ/ds,Ƶď;ϰϬйͿĂŶĚzŽƵdƵďĞ;ϯϴйͿ͘ ůŝǀĞdsŝŶĂŶĂǀĞƌĂŐĞǁĞĞŬŝŶ tŚĞŶƌĞƐƉŽŶĚĞŶƚƐƚŽŽƵƌϮϬϭϳ ,Ƶď;ϰϬйͿĂŶĚzŽƵdƵďĞ;ϯϴйͿ͘ ϭ tŚĞŶƌĞƐƉŽŶĚĞŶƚƐƚŽŽƵƌϮϬϭϳ ůŝǀĞdsŝŶĂŶĂǀĞƌĂŐĞǁĞĞŬŝŶϮϬϭϲϭ ͕ĚĂƚĂĨƌŽŵZƐŚŽǁƚŚĂƚ ,Ƶď;ϰϬйͿĂŶĚzŽƵdƵďĞ;ϯϴйͿ͘ůŵŽƐƚĂƚŚŝƌĚ;ϯϭйͿƐĂŝĚƚŚĞLJƵƐĞĚ ϮϬϭϲ ͕ĚĂƚĂĨƌŽŵZƐŚŽǁƚŚĂƚtŚĞŶƌĞƐƉŽŶĚĞŶƚƐƚŽŽƵƌϮϬϭϳsurvey were asked what services ůŵŽƐƚĂƚŚŝƌĚ;ϯϭйͿƐĂŝĚƚŚĞLJƵƐĞĚ ϮϬϭϲϭ͕ĚĂƚĂĨƌŽŵZƐŚŽǁƚŚĂƚƚŚĞĂŵŽƵŶƚŽĨƟŵĞh<ĂĚƵůƚƐ survey were askedůŵŽƐƚĂƚŚŝƌĚ;ϯϭйͿƐĂŝĚƚŚĞLJƵƐĞĚ what services EĞƞůŝdžĨŽƌǁĂƚĐŚŝŶŐƉƌŽŐƌĂŵŵĞƐ ƚŚĞĂŵŽƵŶƚŽĨƟŵĞh<ĂĚƵůƚƐsurvey were asked what servicesŽƚŚĞƌƚŚĂŶůŝǀĞďƌŽĂĚĐĂƐƚdsƚŚĞLJ EĞƞůŝdžĨŽƌǁĂƚĐŚŝŶŐƉƌŽŐƌĂŵŵĞƐ ƚŚĞĂŵŽƵŶƚŽĨƟŵĞh<ĂĚƵůƚƐƐƉĞŶĚǁĂƚĐŚŝŶŐŚĂƐĨĂůůĞŶƐŝŶĐĞ ŽƚŚĞƌƚŚĂŶůŝǀĞďƌŽĂĚĐĂƐƚdsƚŚĞLJEĞƞůŝdžĨŽƌǁĂƚĐŚŝŶŐƉƌŽŐƌĂŵŵĞƐĂŶĚĮůŵƐĨŽůůŽǁĞĚďLJůůϰ;ϮϲйͿ ƐƉĞŶĚǁĂƚĐŚŝŶŐŚĂƐĨĂůůĞŶƐŝŶĐĞŽƚŚĞƌƚŚĂŶůŝǀĞďƌŽĂĚĐĂƐƚdsƚŚĞLJƵƐĞĚƚŽǁĂƚĐŚdsƉƌŽŐƌĂŵŵĞƐĂŶĚ ĂŶĚĮůŵƐĨŽůůŽǁĞĚďLJůůϰ;ϮϲйͿ ƐƉĞŶĚǁĂƚĐŚŝŶŐŚĂƐĨĂůůĞŶƐŝŶĐĞϮϬϭϬ͕ǁŝƚŚĂĚĞĐůŝŶĞŝŶĂǀĞƌĂŐĞ ƵƐĞĚƚŽǁĂƚĐŚdsƉƌŽŐƌĂŵŵĞƐĂŶĚĂŶĚĮůŵƐĨŽůůŽǁĞĚďLJůůϰ;ϮϲйͿĂŶĚŵĂnjŽŶWƌŝŵĞ;ϮϬйͿ͕DLJϱ ϮϬϭϬ͕ǁŝƚŚĂĚĞĐůŝŶĞŝŶĂǀĞƌĂŐĞƵƐĞĚƚŽǁĂƚĐŚdsƉƌŽŐƌĂŵŵĞƐĂŶĚĮůŵƐ͕ŝWůĂLJĞƌǁĂƐƚŚĞŵŽƐƚ ĂŶĚŵĂnjŽŶWƌŝŵĞ;ϮϬйͿ͕DLJϱ ϮϬϭϬ͕ǁŝƚŚĂĚĞĐůŝŶĞŝŶĂǀĞƌĂŐĞĚĂŝůLJǀŝĞǁŝŶŐƟŵĞŽĨϯϲŵŝŶƵƚĞƐ ĮůŵƐ͕ŝWůĂLJĞƌǁĂƐƚŚĞŵŽƐƚĂŶĚŵĂnjŽŶWƌŝŵĞ;ϮϬйͿ͕DLJϱ;ϭϴйͿĂŶĚ&ĂĐĞŬ;ϭϲйͿ͕ǁŝƚŚ ĚĂŝůLJǀŝĞǁŝŶŐƟŵĞŽĨϯϲŵŝŶƵƚĞƐĮůŵƐ͕ŝWůĂLJĞƌǁĂƐƚŚĞŵŽƐƚƉŽƉƵůĂƌĐŚŽŝĐĞ͕ǁŝƚŚϲϯйŽĨh< ;ϭϴйͿĂŶĚ&ĂĐĞŬ;ϭϲйͿ͕ǁŝƚŚ ĚĂŝůLJǀŝĞǁŝŶŐƟŵĞŽĨϯϲŵŝŶƵƚĞƐ;ͲϭϰйͿƚŽϯŚŽƵƌƐϱϭŵŝŶƵƚĞƐƉĞƌ ƉŽƉƵůĂƌĐŚŽŝĐĞ͕ǁŝƚŚϲϯйŽĨh<;ϭϴйͿĂŶĚ&ĂĐĞŬ;ϭϲйͿ͕ǁŝƚŚĂůůŽƚŚĞƌƐĞƌǀŝĐĞƐďĞůŽǁϭϱй͘ ;ͲϭϰйͿƚŽϯŚŽƵƌƐϱϭŵŝŶƵƚĞƐƉĞƌƉŽƉƵůĂƌĐŚŽŝĐĞ͕ǁŝƚŚϲϯйŽĨh< ĂůůŽƚŚĞƌƐĞƌǀŝĐĞƐďĞůŽǁϭϱй͘ ;ͲϭϰйͿƚŽϯŚŽƵƌƐϱϭŵŝŶƵƚĞƐƉĞƌ ĂůůŽƚŚĞƌƐĞƌǀŝĐĞƐďĞůŽǁϭϱй͘ &ŝŐƵƌĞϭ͘ϲ͗&ŝŐƵƌĞϭ͘ϲ͗dŚĞƉƌŽƉŽƌƟŽŶŽĨĂĚƵůƚƐǁŚŽƵƐĞĚŝīĞƌĞŶƚƐĞƌǀŝĐĞƐĨŽƌǁĂƚĐŚŝŶŐdsƉƌŽŐƌĂŵŵĞƐͬĮůŵƐ;йͿdŚĞƉƌŽƉŽƌƟŽŶŽĨĂĚƵůƚƐǁŚŽƵƐĞĚŝīĞƌĞŶƚƐĞƌǀŝĐĞƐĨŽƌǁĂƚĐŚŝŶŐdsƉƌŽŐƌĂŵŵĞƐͬĮůŵƐ;йͿ &ŝŐƵƌĞϭ͘ϲ͗dŚĞƉƌŽƉŽƌƟŽŶŽĨĂĚƵůƚƐǁŚŽƵƐĞĚŝīĞƌĞŶƚƐĞƌǀŝĐĞƐĨŽƌǁĂƚĐŚŝŶŐdsƉƌŽŐƌĂŵŵĞƐͬĮůŵƐ;йͿ 63%63% 40%40% 38%38% 31%31% 28%28% 63% 40% 38% 31% 28% TVTV TV ZĞĐŽƌĚĞĚdsZĞĐŽƌĚĞĚds ZĞĐŽƌĚĞĚds

26%26% 20%20% 18%18% 16%16% 12%12% 26% 20% 18% 16% 12%

tŚĞŶǁĞŐƌŽƵƉƚŚĞƐĞƚŽŐĞƚŚĞƌŝŶƚŽtŚĞŶǁĞŐƌŽƵƉƚŚĞƐĞƚŽŐĞƚŚĞƌŝŶƚŽ ,Ƶď͕DLJϱͿƵƐĞĚďLJϲϳйŽĨĂĚƵůƚƐ,Ƶď͕DLJϱͿƵƐĞĚďLJϲϳйŽĨĂĚƵůƚƐ sŝƌŐŝŶDĞĚŝĂ;ϮϯйͿ͘ĚƵůƚƐĂŐĞĚϭϲͲsŝƌŐŝŶDĞĚŝĂ;ϮϯйͿ͘ĚƵůƚƐĂŐĞĚϭϲͲ tŚĞŶǁĞŐƌŽƵƉƚŚĞƐĞƚŽŐĞƚŚĞƌŝŶƚŽtypestypes of ofservices, services,,Ƶď͕DLJϱͿƵƐĞĚďLJϲϳйŽĨĂĚƵůƚƐ we we can can see see that that ĐŽŵďŝŶĞĚ͕ĨŽůůŽǁĞĚďLJƐƵďƐĐƌŝƉƟŽŶĐŽŵďŝŶĞĚ͕ĨŽůůŽǁĞĚďLJƐƵďƐĐƌŝƉƟŽŶsŝƌŐŝŶDĞĚŝĂ;ϮϯйͿ͘ĚƵůƚƐĂŐĞĚϭϲͲϮϰĂƌĞŵŽƐƚůŝŬĞůLJƚŽƵƐĞŵŽƐƚƚLJƉĞƐϮϰĂƌĞŵŽƐƚůŝŬĞůLJƚŽƵƐĞŵŽƐƚƚLJƉĞƐ 2 Television and audio-visual content Communications Market Report 2017 - United Kingdom types of services, we can seeƚŚĞŵŽƐƚƉŽƉƵůĂƌŽŶͲĚĞŵĂŶĚĂŶĚƚŚĞŵŽƐƚƉŽƉƵůĂƌŽŶͲĚĞŵĂŶĚĂŶĚ that ĐŽŵďŝŶĞĚ͕ĨŽůůŽǁĞĚďLJƐƵďƐĐƌŝƉƟŽŶŽŶͲĚĞŵĂŶĚĂŶĚƐƚƌĞĂŵŝŶŐƐĞƌǀŝĐĞƐŽŶͲĚĞŵĂŶĚĂŶĚƐƚƌĞĂŵŝŶŐƐĞƌǀŝĐĞƐϮϰĂƌĞŵŽƐƚůŝŬĞůLJƚŽƵƐĞŵŽƐƚƚLJƉĞƐŽĨƐĞƌǀŝĐĞƐ͕ŝŶĐůƵĚŝŶŐƚŚƌĞĞͲƋƵĂƌƚĞƌƐŽĨƐĞƌǀŝĐĞƐ͕ŝŶĐůƵĚŝŶŐƚŚƌĞĞͲƋƵĂƌƚĞƌƐ ATON IK ATON IK ATON IK ƚŚĞŵŽƐƚƉŽƉƵůĂƌŽŶͲĚĞŵĂŶĚĂŶĚATONƐƚƌĞĂŵŝŶŐƐĞƌǀŝĐĞƐĨŽƌǁĂƚĐŚŝŶŐƐƚƌĞĂŵŝŶŐƐĞƌǀŝĐĞƐĨŽƌǁĂƚĐŚŝŶŐIK ŽŶͲĚĞŵĂŶĚĂŶĚƐƚƌĞĂŵŝŶŐƐĞƌǀŝĐĞƐƐƵĐŚĂƐŵĂnjŽŶWƌŝŵĞĂŶĚEĞƞůŝdžƐƵĐŚĂƐŵĂnjŽŶWƌŝŵĞĂŶĚEĞƞůŝdžŽĨƐĞƌǀŝĐĞƐ͕ŝŶĐůƵĚŝŶŐƚŚƌĞĞͲƋƵĂƌƚĞƌƐǁŚŽƐĂLJƚŚĞLJƵƐĞƐƵďƐĐƌŝƉƟŽŶǁŚŽƐĂLJƚŚĞLJƵƐĞƐƵďƐĐƌŝƉƟŽŶ D I GITAL D I GITAL D I GITA L ƐƚƌĞĂŵŝŶŐƐĞƌǀŝĐĞƐĨŽƌǁĂƚĐŚŝŶŐD I GITƉƌŽŐƌĂŵŵĞƐĂŶĚĮůŵƐĂƌĞƚŚĞAƉƌŽŐƌĂŵŵĞƐĂŶĚĮůŵƐĂƌĞƚŚĞL ƐƵĐŚĂƐŵĂnjŽŶWƌŝŵĞĂŶĚEĞƞůŝdž;ϰϱйͿ͕ƐŽĐŝĂůŵĞĚŝĂƉůĂƞŽƌŵƐƐƵĐŚ;ϰϱйͿ͕ƐŽĐŝĂůŵĞĚŝĂƉůĂƞŽƌŵƐƐƵĐŚǁŚŽƐĂLJƚŚĞLJƵƐĞƐƵďƐĐƌŝƉƟŽŶŽŶͲĚĞŵĂŶĚĂŶĚƐƚƌĞĂŵŝŶŐƐĞƌǀŝĐĞƐŽŶͲĚĞŵĂŶĚĂŶĚƐƚƌĞĂŵŝŶŐƐĞƌǀŝĐĞƐ ƉƌŽŐƌĂŵŵĞƐĂŶĚĮůŵƐĂƌĞƚŚĞƉƵďůŝĐƐĞƌǀŝĐĞďƌŽĂĚĐĂƐƚĞƌƐ͛ŽŶůŝŶĞƉƵďůŝĐƐĞƌǀŝĐĞďƌŽĂĚĐĂƐƚĞƌƐ͛ŽŶůŝŶĞ;ϰϱйͿ͕ƐŽĐŝĂůŵĞĚŝĂƉůĂƞŽƌŵƐƐƵĐŚĂƐ&ĂĐĞŬĂŶĚzŽƵdƵďĞ;ϰϭйͿĂŶĚĂƐ&ĂĐĞŬĂŶĚzŽƵdƵďĞ;ϰϭйͿĂŶĚŽŶͲĚĞŵĂŶĚĂŶĚƐƚƌĞĂŵŝŶŐƐĞƌǀŝĐĞƐ;ϳϲйͿĂŶĚďƌŽĂĚĐĂƐƚĞƌŽŶͲĚĞŵĂŶĚ;ϳϲйͿĂŶĚďƌŽĂĚĐĂƐƚĞƌŽŶͲĚĞŵĂŶĚ ƉƵďůŝĐƐĞƌǀŝĐĞďƌŽĂĚĐĂƐƚĞƌƐ͛ŽŶůŝŶĞƐĞƌǀŝĐĞƐ;ŝWůĂLJĞƌ͕ůůϰ͕/dsƐĞƌǀŝĐĞƐ;ŝWůĂLJĞƌ͕ůůϰ͕/dsĂƐ&ĂĐĞŬĂŶĚzŽƵdƵďĞ;ϰϭйͿĂŶĚƉĂLJdsƐĞƌǀŝĐĞƐƐƵĐŚĂƐ^ŬLJdsĂŶĚƉĂLJdsƐĞƌǀŝĐĞƐƐƵĐŚĂƐ^ŬLJdsĂŶĚ;ϳϲйͿĂŶĚďƌŽĂĚĐĂƐƚĞƌŽŶͲĚĞŵĂŶĚĂŶĚƐƚƌĞĂŵŝŶŐƐĞƌǀŝĐĞƐ;ϳϱйͿ͘ĂŶĚƐƚƌĞĂŵŝŶŐƐĞƌǀŝĐĞƐ;ϳϱйͿ͘ ƐĞƌǀŝĐĞƐ;ŝWůĂLJĞƌ͕ůůϰ͕/ds ƉĂLJdsƐĞƌǀŝĐĞƐƐƵĐŚĂƐ^ŬLJdsĂŶĚ ĂŶĚƐƚƌĞĂŵŝŶŐƐĞƌǀŝĐĞƐ;ϳϱйͿ͘

1313 13 2.2.3 Spend on UK television programmes 1313 13 1313 13 1313 ƌŽĂĚĐĂƐƚĞƌƐƐƉĞŶƚάϳ͘ϯďŶŽŶŶĞƚǁŽƌŬƉƌŽŐƌĂŵŵŝŶŐŝŶϮϬϭϲ 13 1313 13 ϭ Ϯ 2 Television and audio-visual content Spendofcom.org.uk in key genres ďLJĐŚĂŶŶĞůƐ ƉƌŽŐƌĂŵŵŝŶŐ͕ƵƉĨƌŽŵϯϲйŝŶϮϬϭϱ͘ ŚĂǀĞďĞĞŶĮƌƐƚƐŚŽǁŶŽŶ 1313 13 ATON IK ATON IK ďƌŽĂĚĐĂƐƟŶŐŝŶƚŚĞh<ǁĂƐάϳ͘ϯďŶ dŚƌĞĞ͖ƐƉĞŶĚŝƐŶŽǁƌĞĐŽƌĚĞĚATON IK AT1313 ON IK dŚĞƉŽƌƞŽůŝŽĐŚĂŶŶĞůƐƌĞƉŽƌƚĞĚ 13 ϭŚƩƉƐ͗ͬͬǁǁǁ͘ŽĨĐŽŵ͘ŽƌŐ͘ƵŬͬƌĞƐĞĂƌĐŚͲĂŶĚͲĚĂƚĂͬŵƵůƟͲƐĞĐƚŽƌͲƌĞƐĞĂƌĐŚͬĚŝŐŝƚĂůͲĚĂLJ 2 Television and audio-visual content Communications Market Report 2017 - United Kingdom ϭŚƩƉƐ͗ͬͬǁǁǁ͘ŽĨĐŽŵ͘ŽƌŐ͘ƵŬͬƌĞƐĞĂƌĐŚͲĂŶĚͲĚĂƚĂͬŵƵůƟͲƐĞĐƚŽƌͲƌĞƐĞĂƌĐŚͬĚŝŐŝƚĂůͲĚĂLJ D I GITAL D I GITAL D I GITA L D I GITAϮ L ŝŶϮϬϭϲ͕ĂŶŝŶĐƌĞĂƐĞŽĨϭϭйLJĞĂƌ ĂŐĂŝŶƐƚƚŚĞĐŚĂŶŶĞůŽŶǁŚŝĐŚ ϭ 13 Ϯ ĚƵůƚƐϭϲн͘ĂƐĞĚŽŶǀŝĞǁŝŶŐƚŽƐĐŚĞĚƵůĞĚ͕ďƌŽĂĚĐĂƐƚdsŽŶdsƐĞƚƐŝŶĐůƵĚŝŶŐůŝǀĞĂƚƚŚĞƟŵĞŽĨďƌŽĂĚĐĂƐƚƉůƵƐ ŚƩƉƐ͗ͬͬǁǁǁ͘ŽĨĐŽŵ͘ŽƌŐ͘ƵŬͬƌĞƐĞĂƌĐŚͲĂŶĚͲĚĂƚĂͬŵƵůƟͲƐĞĐƚŽƌͲƌĞƐĞĂƌĐŚͬĚŝŐŝƚĂůͲĚĂLJ13 ĚƵůƚƐϭϲн͘ĂƐĞĚŽŶǀŝĞǁŝŶŐƚƟŵĞͲƐŚŝŌĞĚǀŝĞǁŝŶŐƚŚƌŽƵŐŚsZƐĂŶĚĐĂƚĐŚͲƵƉdsƵƉƚŽƐĞǀĞŶĚĂLJƐĂŌĞƌƚƌĂŶƐŵŝƐƐŝŽŶ͘ŽƐĐŚĞĚƵůĞĚ͕ďƌŽĂĚĐĂƐƚdsŽŶdsƐĞƚƐŝŶĐůƵĚŝŶŐůŝǀĞĂƚƚŚĞƟŵĞŽĨďƌŽĂĚĐĂƐƚƉůƵƐ ƟŵĞͲƐŚŝŌĞĚǀŝĞǁŝŶŐƚŚƌŽƵŐŚsZƐĂŶĚĐĂƚĐŚͲƵƉdsƵƉƚŽƐĞǀĞŶĚĂLJƐĂŌĞƌƚƌĂŶƐŵŝƐƐŝŽŶ͘ ĂƌĞĂůͲƚĞƌŵƐĚĞĐƌĞĂƐĞŝŶƐƉĞŶĚĨŽƌ 13 ϮĚƵůƚƐϭϲн͘ĂƐĞĚŽŶǀŝĞǁŝŶŐƚŽƐĐŚĞĚƵůĞĚ͕ďƌŽĂĚĐĂƐƚdsŽŶdsƐĞƚƐŝŶĐůƵĚŝŶŐůŝǀĞĂƚƚŚĞƟŵĞŽĨďƌŽĂĚĐĂƐƚƉůƵƐ ŽŶLJĞĂƌŝŶƌĞĂůƚĞƌŵƐ͘DƵĐŚŽĨƚŚŝƐ ƉƌŽŐƌĂŵŵĞƐĂƌĞĮƌƐƚďƌŽĂĚĐĂƐƚ͘ ƟŵĞͲƐŚŝŌĞĚǀŝĞǁŝŶŐƚŚƌŽƵŐŚsZƐĂŶĚĐĂƚĐŚͲƵƉdsƵƉƚŽƐĞǀĞŶĚĂLJƐĂŌĞƌƚƌĂŶƐŵŝƐƐŝŽŶ͘ ƚŚĞƐĞĐŽŶĚLJĞĂƌƌƵŶŶŝŶŐ͘^ŽŵĞ ŝŶĐƌĞĂƐĞǁĂƐĚƌŝǀĞŶďLJƚŚĞϮϰй /ds͛ƐŝŶǀĞƐƚŵĞŶƚŝŶƉƌŽŐƌĂŵŵŝŶŐĨĞůů ŽĨƚŚŝƐŵĂLJďĞĂƩƌŝďƵƚĂďůĞƚŽ ƌŝƐĞŝŶƐƉĞŶĚŽŶƐƉŽƌƚƐĐŚĂŶŶĞůƐ ďLJϱйŝŶƌĞĂůƚĞƌŵƐLJĞĂƌŽŶLJĞĂƌ͘ dŚƌĞĞ͛ƐŵŽǀĞŽŶůŝŶĞŝŶ&ĞďƌƵĂƌLJ ŝŶƚŚĞŵƵůƟĐŚĂŶŶĞůƐĞĐƚŽƌ͘ϮϬϭϲ ϮϬϭϲ͕ǁŚŝĐŚǁĂƐĐĂƌƌŝĞĚŽƵƚƉĂƌƚůLJ dŚĞW^ĐŚĂŶŶĞůƐŵĂĚĞƵƉϯϳйŽĨ ŵĂƌŬĞĚƚŚĞƐƚĂƌƚŽĨƚŚĞŶĞǁŶŐůŝƐŚ ^ƉĞŶĚŽŶh<ͲŽƌŝŐŝŶĂƚĞĚƉƌŽŐƌĂŵŵŝŶŐďLJƚŚĞŵĂŝŶĮǀĞW^ĐŚĂŶŶĞůƐǁĂƐĂƚŝƚƐŚŝŐŚĞƐƚůĞǀĞů ƚŽŵĂŬĞďƌŽĂĚĐĂƐƚƐĂǀŝŶŐƐϰ͘dŚĞ ĂůůŶĞƚǁŽƌŬƉƌŽŐƌĂŵŵĞƐƉĞŶĚŝŶ 6 WƌĞŵŝĞƌ>ĞĂŐƵĞ&ŽŽƚďĂůůďƌŽĂĚĐĂƐƚ ĐŚĂŶŶĞů͛ƐďƵĚŐĞƚǁĂƐƌĞĚƵĐĞĚĨƌŽŵ ϮϬϭϲ͕ĚŽǁŶďLJƚŚƌĞĞƉĞƌĐĞŶƚĂŐĞ DĂŶLJƉĞŽƉůĞƐƵďƐĐƌŝďĞƚŽŵŽƌĞƚŚĂŶŽŶĞŽŶͲĚĞŵĂŶĚͬƐƚƌĞĂŵŝŶŐƐĞƌǀŝĐĞƐŝŶĐĞϮϬϭϮ ƌŝŐŚƚƐĚĞĂůƐ͕ĨŽƌǁŚŝĐŚ^ŬLJĂŶĚ άϴϱŵƚŽάϮϱŵĂƐƉĂƌƚŽĨƚŚĞŵŽǀĞϱ͘ ƉŽŝŶƚƐŽŶϮϬϭϱ͘dŚĞŝŶĐƌĞĂƐĞŝŶ dƉĂŝĚĂŚŝŐŚĞƌƉƌŝĐĞƚŚĂŶŝŶ KǀĞƌĂůůƐƉĞŶĚŽŶĮƌƐƚͲƌƵŶh<Ͳ ^ƉĞŶĚŽŶƉĞĂŬƟŵĞƉƌŽŐƌĂŵŵŝŶŐ ŽƌŝŐŝŶĂůƐƉŽƌƚƐĐŽŶƚĞŶƚŝŶĚĂLJƟŵĞ ƐƉĞŶĚŝŶƐƉŽƌƚƐƌŝŐŚƚƐŵĞĂŶƚƚŚĂƚ ƉƌĞǀŝŽƵƐLJĞĂƌƐ͘dŚĞƚǁŽĐŽŵƉĂŶŝĞƐ ^ƉĞŶĚŽŶKŶĞƉƌŽŐƌĂŵŵŝŶŐ LJƚŚĞĞŶĚŽĨϮϬϭϲ͕ĨŽƵƌŝŶƚĞŶ ŵŽƐƚƉŽƉƵůĂƌĐŽŵďŝŶĂƟŽŶǁĂƐ ŝŐŚƚƉĞƌĐĞŶƚŽĨĂůůƵƐĞƌƐŽĨEĞƞůŝdž͕ŽƌŝŐŝŶĂƚĞĚƉƌŽŐƌĂŵŵŝŶŐ;ŝŶĐůƵĚŝŶŐ ĂŶĚŶĂƟŽŶƐ͛ĂŶĚƌĞŐŝŽŶƐ͛ ĂŶĚůĂƚĞŶŝŐŚƚǁŚĞŶĐŽǀĞƌŝŶŐƚŚĞ ĮůŵĂŶĚƐƉŽƌƚĐŚĂŶŶĞůƐĐŽŵďŝŶĞĚ ƚŽŐĞƚŚĞƌƉĂŝĚĂƌĞĐŽƌĚάϱ͘ϭϯϲďŶ ŽǀĞƌƚŽŽŬ/dsƐƉĞŶĚŝŶϮϬϭϲ͕ ƵƐĞƌƐŽĨEĞƞůŝdž͕ŵĂnjŽŶWƌŝŵĞ EĞƞůŝdžĂŶĚŵĂnjŽŶWƌŝŵĞ͕ǁŝƚŚ ŵĂnjŽŶWƌŝŵĞĂŶĚEKtdsŚĂĚŶĂƟŽŶƐ͛ĂŶĚƌĞŐŝŽŶƐ͛ƉƌŽŐƌĂŵŵŝŶŐͿ ƉƌŽŐƌĂŵŵŝŶŐǁĂƐďƌŽĂĚůLJƐƚĂďůĞ͕ ϮϬϭϲh&ƵƌŽƉĞĂŶ&ŽŽƚďĂůů ;ƉƌŝŶĐŝƉĂůůLJ^ŬLJ^ƉŽƌƚƐ͕^ŬLJŝŶĞŵĂ ĨŽƌůŝǀĞWƌĞŵŝĞƌ>ĞĂŐƵĞdsƌŝŐŚƚƐ ƌŝƐŝŶŐďLJϭϬйŝŶƌĞĂůƚĞƌŵƐĂŌĞƌ ďLJƚŚĞŵĂŝŶĮǀĞW^ĐŚĂŶŶĞůƐʹ ǁŚŝůĞƐƉĞŶĚŽŶůĂƚĞͲŶŝŐŚƚĂŶĚ ŚĂŵƉŝŽŶƐŚŝƉƐĂŶĚƚŚĞZŝŽ ĂŶĚd^ƉŽƌƚͿŵĂĚĞƵƉϰϰйŽĨƚŚĞ ĂŶĚEKtdsŚĂĚĂĐĐĞƐƐƚŽŵŽƌĞ ϮϲйŽĨƵƐĞƌƐƵƐŝŶŐďŽƚŚƐĞƌǀŝĐĞƐ ĂĐĐĞƐƐƚŽĂůůƚŚƌĞĞƐĞƌǀŝĐĞƐŝŶƚŚĞ ĨŽƌƚŚƌĞĞƐĞĂƐŽŶƐƐƚĂƌƟŶŐĨƌŽŵ ĂĚŝƉŝŶϮϬϭϱ͕ǁŚĞŶƚŚĞƌĞǁĂƐ KŶĞ͕dǁŽ͕/ds;ŝŶĐůƵĚŝŶŐ ĚĂLJƟŵĞƉƌŽŐƌĂŵŵŝŶŐŐƌĞǁďLJ KůLJŵƉŝĐĂŶĚWĂƌĂůLJŵƉŝĐ'ĂŵĞƐ͘ ƚŽƚĂů͕ƵƉďLJϰƉƉŽŶƚŚĞƉƌĞǀŝŽƵƐ ϮϬϭϲͲϭϳ3͘dŚŝƐŝƐĂϱϵйŝŶĐƌĞĂƐĞŽŶ ŶŽKůLJŵƉŝĐƐŽƌtŽƌůĚƵƉͬ ƚŚĂŶŽŶĞŽĨƚŚĞƐĞƐĞƌǀŝĐĞƐ͘dŚĞ ŝŶƚŚĞĮŶĂůƋƵĂƌƚĞƌŽĨϮϬϭϲ͘ ĮŶĂůƚŚƌĞĞŵŽŶƚŚƐŽĨϮϬϭϲ͘/dsƌĞĂŬĨĂƐƚͿͬ^dsͬhds͕ŚĂŶŶĞůϰ ϯϭйĂŶĚϰйƌĞƐƉĞĐƟǀĞůLJŝŶƌĞĂů LJĞĂƌ͘ŚĂŶŶĞůϰ͕ŚĂŶŶĞůϱ͕ĂŶĚƚŚĞ ƚŚĞάϯ͘ϬϭϴďŶƚŚĞLJƉĂŝĚĨŽƌƚŚƌĞĞ ƵƌŽƉĞĂŶŚĂŵƉŝŽŶƐŚŝƉĨŽŽƚďĂůů͘ KǀĞƌůĂƉďĞƚǁĞĞŶƐƵďƐĐƌŝďĞƌƐŽĨĂŶĚŚĂŶŶĞůϱʹŝŶĐƌĞĂƐĞĚďLJϰй ƚĞƌŵƐ͘dŚŝƐŵĂLJďĞĚƵĞŝŶƉĂƌƚƚŽSPEND ON NETWORK CONTENT INVESTMENT INCREASED IN 2016 FROM £6.6 BILION TO £7.3 BILLIONĐŽŵŵĞƌĐŝĂůW^ƉŽƌƞŽůŝŽĐŚĂŶŶĞůƐ͕ AN INCREASE OF 26% ON SPENDƐĞĂƐŽŶƐŝŶϮϬϭϮ͘^ƉŽƌƚƐĐŚĂŶŶĞůƐ IN SPORTS CONTENT ŶŽƚŚĞƌĨĂĐƚŽƌŝƐƚŚĞĐŽƐƚŽĨƚŚĞ ŝŶƌĞĂůƚĞƌŵƐƚŽάϮ͕ϳϬϴŵŝŶϮϬϭϲ͘ ďƌŽĂĚĐĂƐƚĞƌƐŝŶĐƌĞĂƐŝŶŐƐƉĞŶĚŽŶ ĂůůŝŶǀĞƐƚĞĚƐŝŐŶŝĮĐĂŶƚůLJŵŽƌĞŽŶ ĂĐĐŽƵŶƚĞĚĨŽƌϰϬйŽĨƐƉĞŶĚŽŶh< ĮƌƐƚƐŚŽǁŝŶŐŽĨƉƌŽŐƌĂŵŵĞƐ ƉƌŽŐƌĂŵŵŝŶŐƚŚĂŶŝŶϮϬϭϱ͘ ƚŚĞŵĂŝŶƚĞůĞǀŝƐŝŽŶƐƵďƐĐƌŝƉƟŽŶ ǁŚŝĐŚ͕ŝŶƉƌĞǀŝŽƵƐLJĞĂƌƐ͕ǁŽƵůĚ &ŝŐƵƌĞϮ͘ϰ͗^ƵďƐĐƌŝƉƟŽŶŽŶͲĚĞŵĂŶĚĂŶĚƐƚƌĞĂŵŝŶŐƐĞƌǀŝĐĞƐŽǀĞƌůĂƉ Spend on first run UK originated output on the five main PSB channels Spend on network TV programmes services in the UK &ŝŐƵƌĞϮ͘ϭϴ͗^ƉĞŶĚŽŶĮƌƐƚͲƌƵŶh<ŽƌŝŐŝŶĂƚĞĚŽƵƚƉƵƚŽŶƚŚĞĮǀĞŵĂŝŶW^ĐŚĂŶŶĞůƐ &ŝŐƵƌĞϮ͘ϭϳ͗^ƉĞŶĚŽŶŶĞƚǁŽƌŬdsƉƌŽŐƌĂŵŵĞƐ͗ϮϬϭϱʹϮϬϭϲ

Growth 1 year change 1 year 5 year 11% Total £2,702m £2,712m £2,708m CAGR £7,293m £2,610m £2,595m £2,506m Total £6,572m £213m 13% Channel 5 Amazon £288m £279m £276m 4% 0% £314m 36% £286m £272m £189m £183m 20% EĞƞůŝdž £269m £269m £326m 17% Commercial PSB portfolio channels £267m £269m £277m £217m £553m Prime £245m £212m £318m 26% £234m 2% -0.9% BBC portfolio channels Nat i ons & £511m £1,177m -16% £607m £591m £553m £541m £562m Regions £495m £1,133m 3% BBC Two £788m 31% 0.8% 8% Late night £825m 8% Channel 4 2% £845m 4% £768m 4% Other multichannels 4% -1.5% Day t i me £1,541m £1,574m £1,509m £1,526m £1,569m £1,592m -5% ITV ITV/ Breakfast 4% 57 £2,894m £2,341m 10% BBC One 1%57 0.7% Peak time Now TV 24% Sports channels 2015 2016 ATON IK 2011 ATO2012N IK 2013 2014 2015 2016 57 ATON IK ATON IK Source:'Ĩ<^sŽdƌĂĐŬĞƌ͕YϰϮϬϭϲKĐƚŽďĞƌͲĞĐĞŵďĞƌϮϬϭϲ D I GITAL D I GITAL Source: KĨĐŽŵͬďƌŽĂĚĐĂƐƚĞƌƐ͘ D I GITA L D I GITA L Source: KĨĐŽŵͬďƌŽĂĚĐĂƐƚĞƌƐ͘ 57 Note:&ŝŐƵƌĞƐĞdžƉƌĞƐƐĞĚŝŶƌĞĂůƚĞƌŵƐ͘&ŝŐƵƌĞƐĚŽŶŽƚŝŶĐůƵĚĞƐƉĞŶĚŽŶŶĂƟŽŶƐ͛ĂŶĚƌĞŐŝŽŶƐ͛ŽƵƚƉƵƚ͘ƉŽƌƞŽůŝŽĐŚĂŶŶĞůƐ Notes:tϭ͗ZĞĂƐŽŶƐĨŽƌƐŝŐŶŝŶŐƵƉĨŽƌͬƵƐŝŶŐƐĞƌǀŝĐĞ Note: &ŝŐƵƌĞƐĂƌĞĞdžƉƌĞƐƐĞĚŝŶƌĞĂůƚĞƌŵƐ;ϮϬϭϲƉƌŝĐĞƐͿ͘dŚĞLJŝŶĐůƵĚĞ/dsďƌĞĂŬĨĂƐƚ͕ƐƉĞŶĚŝŶŐŝŶƚŚĞŶĂƟŽŶƐĂŶĚƌĞŐŝŽŶƐŽŶŶŐůŝƐŚͲŝŶĐůƵĚĞƐdŚƌĞĞ͕&ŽƵƌ͕EĞǁƐ͕WĂƌůŝĂŵĞŶƚ͕ĂŶĚĞĞďŝĞƐ;ďƵƚŶŽƚ,Ϳ͚͘KƚŚĞƌŵƵůƟĐŚĂŶŶĞůƐ͛ŝŶĐůƵĚĞĂůů Base:EĞƞůŝdžƵƐĞƌƐ;ŶсϭϲϳϬ;ϭϯϴƚƌŝĂůůŝƐƚƐͿͿ͕ŵĂnjŽŶWƌŝŵĞsŝĚĞŽƵƐĞƌƐ;ŶсϭϮϱϱ;ϭϱϲƚƌŝĂůůŝƐƚƐͿͿ͕EKtdsƵƐĞƌƐ;ŶсϰϮϯůĂŶŐƵĂŐĞƉƌŽŐƌĂŵŵŝŶŐ;ĂŶĚĂƐŵĂůůĂŵŽƵŶƚŽĨ/ƌŝƐŚͲůĂŶŐƵĂŐĞƉƌŽŐƌĂŵŵĞƐͿďƵƚĚŽŶŽƚŝŶĐůƵĚĞƚŚĞ͛ƐƉŽƌƞŽůŝŽĐŚĂŶŶĞůƐ͕ůďĂ57 ŐĞŶƌĞƐ;ĞdžĐůƵĚŝŶŐƐƉŽƌƚƐĂŶĚĮůŵƐͿ͘WƌŽŐƌĂŵŵĞƐƉĞŶĚĐŽŵƉƌŝƐĞƐŝŶͲŚŽƵƐĞƉƌŽĚƵĐƟŽŶƐ͕ĐŽŵŵŝƐƐŝŽŶƐĨƌŽŵŝŶĚĞƉĞŶĚĞŶƚƐ͕ĂĐƋƵŝƌĞĚ ;ϴϬƚƌŝĂůůŝƐƚƐͿͿ Žƌ^ϰ͘ ƉƌŽŐƌĂŵŵĞƐĂŶĚƌĞƉĞĂƚƐ;ŽƌŝŐŝŶĂƟŽŶƐĂŶĚĂĐƋƵŝƐŝƟŽŶƐͿ͘ 57 Note: 58 hƐĞƌƐŝŶĐůƵĚĞƚŚŽƐĞǁŚŽĞŝƚŚĞƌƐƵďƐĐƌŝďĞƚŽŽƌĂƌĞƚƌŝĂůůŝŶŐĞĂĐŚƐĞƌǀŝĐĞĂŶĚƵƐĞŝƚĂƚůĞĂƐƚŽŶĐĞĂĨŽƌƚŶŝŐŚƚ͘ ϭ^ƉĞŶĚĮŐƵƌĞƐŚĞƌĞĚŽŶŽƚƌĞƉƌĞƐĞŶƚƚŚĞĞŶƟƌĞĐŽƐƚŽĨƉƌŽŐƌĂŵŵĞƉƌŽĚƵĐƟŽŶŝŶƚŚĞh<ĂƐƚŚĞLJĚŽŶŽƚŝŶĐůƵĚĞƚŚŝƌĚͲƉĂƌƚLJĨƵŶĚŝŶŐŽƌƚŚĞĨƵůůĐŽƐƚŽĨĐŽͲƉƌŽĚƵĐƟŽŶƐǁŝƚŚŽǀĞƌƐĞĂƐďƌŽĂĚĐĂƐƚĞƌƐ͘ 57 Ϯ^ĞĞ&ŝŐƵƌĞϮ͘ϭϵĨŽƌĚĞƚĂŝůĞĚƐƉĞŶĚĂŶĂůLJƐŝƐŽĨŬĞLJŐĞŶƌĞƐ͘ PRODUCTION3 ^ŽƵƌĐĞ͗ŚƩƉ͗ͬͬǁǁǁ͘ďďĐ͘ĐŽ͘ƵŬͬƐƉŽƌƚͬĨŽŽƚďĂůůͬϯϭϯϱϳϰϬϵ AND58 DISTRIBUTION MODELS EVOLVE THOUGH 57 UKϰ ^ŽƵƌĐĞ͗ŚƩƉ͗ͬͬǁǁǁ͘ďďĐ͘ĐŽ͘ƵŬͬŶĞǁƐͬĞŶƚĞƌƚĂŝŶŵĞŶƚͲĂƌƚƐͲϯϱϱϳϴϴϲϳPSB SPEND ON FIRST RUN ORIGINALS STEADY ϱ^ŽƵƌĐĞ͗ŚƩƉ͗ͬͬǁǁǁ͘ďďĐ͘ĐŽ͘ƵŬͬŶĞǁƐͬĞŶƚĞƌƚĂŝŶŵĞŶƚͲĂƌƚƐͲϯϰϵϯϮϲϴϴ58 ATON IK ATON IK ATON IK ATON IK D I GITAL D I GITAL 58 D I GITA L D I GITA L Source: IHS Markit Channels & Programming Intelligence 2017 58

58

58

58

41

41

41

41

41

41

41

41 Communications Market Report 2017 - United Kingdom 1 1 UnitedUnited Kingdom’s Kingdom’s communications communications market market Communications Market Report 2017 - United Kingdom 1 United Kingdom’s communications market Communications Market Report 2017 - United Kingdom

1.4.21.4.2 The The services services people people use use 1.4.2 The services people use KŶͲĚĞŵĂŶĚĂŶĚƐƚƌĞĂŵŝŶŐĂƌĞďĞĐŽŵŝŶŐŵŽƌĞŵĂŝŶƐƚƌĞĂŵKŶͲĚĞŵĂŶĚĂŶĚƐƚƌĞĂŵŝŶŐĂƌĞďĞĐŽŵŝŶŐŵŽƌĞŵĂŝŶƐƚƌĞĂŵ KŶͲĚĞŵĂŶĚĂŶĚƐƚƌĞĂŵŝŶŐĂƌĞďĞĐŽŵŝŶŐŵŽƌĞŵĂŝŶƐƚƌĞĂŵ Ϯ tŚŝůĞϵϭйŽĨh<ĂĚƵůƚƐǁĂƚĐŚĞĚtŚŝůĞϵϭйŽĨh<ĂĚƵůƚƐǁĂƚĐŚĞĚ ĂĚƵůƚ;ϭϲнͿƉĞƌĚĂLJŝŶϮϬϭϲĂĚƵůƚ;ϭϲнͿƉĞƌĚĂLJŝŶϮϬϭϲϮ͘ ͘ ĂĚƵůƚƐĐŝƟŶŐƚŚŝƐ͕ĨŽůůŽǁĞĚďLJ/dsĂĚƵůƚƐĐŝƟŶŐƚŚŝƐ͕ĨŽůůŽǁĞĚďLJ/ds tŚŝůĞϵϭйŽĨh<ĂĚƵůƚƐǁĂƚĐŚĞĚůŝǀĞdsŝŶĂŶĂǀĞƌĂŐĞǁĞĞŬŝŶĂĚƵůƚ;ϭϲнͿƉĞƌĚĂLJŝŶϮϬϭϲϮ͘ ĂĚƵůƚƐĐŝƟŶŐƚŚŝƐ͕ĨŽůůŽǁĞĚďLJ/ds,Ƶď;ϰϬйͿĂŶĚzŽƵdƵďĞ;ϯϴйͿ͘ ůŝǀĞdsŝŶĂŶĂǀĞƌĂŐĞǁĞĞŬŝŶ tŚĞŶƌĞƐƉŽŶĚĞŶƚƐƚŽŽƵƌϮϬϭϳ ,Ƶď;ϰϬйͿĂŶĚzŽƵdƵďĞ;ϯϴйͿ͘ ϭ tŚĞŶƌĞƐƉŽŶĚĞŶƚƐƚŽŽƵƌϮϬϭϳ ůŝǀĞdsŝŶĂŶĂǀĞƌĂŐĞǁĞĞŬŝŶϮϬϭϲϭ ͕ĚĂƚĂĨƌŽŵZƐŚŽǁƚŚĂƚ ,Ƶď;ϰϬйͿĂŶĚzŽƵdƵďĞ;ϯϴйͿ͘ůŵŽƐƚĂƚŚŝƌĚ;ϯϭйͿƐĂŝĚƚŚĞLJƵƐĞĚ ϮϬϭϲ ͕ĚĂƚĂĨƌŽŵZƐŚŽǁƚŚĂƚtŚĞŶƌĞƐƉŽŶĚĞŶƚƐƚŽŽƵƌϮϬϭϳsurvey were asked what services ůŵŽƐƚĂƚŚŝƌĚ;ϯϭйͿƐĂŝĚƚŚĞLJƵƐĞĚ ϮϬϭϲϭ͕ĚĂƚĂĨƌŽŵZƐŚŽǁƚŚĂƚƚŚĞĂŵŽƵŶƚŽĨƟŵĞh<ĂĚƵůƚƐ survey were askedůŵŽƐƚĂƚŚŝƌĚ;ϯϭйͿƐĂŝĚƚŚĞLJƵƐĞĚ what services EĞƞůŝdžĨŽƌǁĂƚĐŚŝŶŐƉƌŽŐƌĂŵŵĞƐ ƚŚĞĂŵŽƵŶƚŽĨƟŵĞh<ĂĚƵůƚƐsurvey were asked what servicesŽƚŚĞƌƚŚĂŶůŝǀĞďƌŽĂĚĐĂƐƚdsƚŚĞLJ EĞƞůŝdžĨŽƌǁĂƚĐŚŝŶŐƉƌŽŐƌĂŵŵĞƐ ƚŚĞĂŵŽƵŶƚŽĨƟŵĞh<ĂĚƵůƚƐƐƉĞŶĚǁĂƚĐŚŝŶŐŚĂƐĨĂůůĞŶƐŝŶĐĞ ŽƚŚĞƌƚŚĂŶůŝǀĞďƌŽĂĚĐĂƐƚdsƚŚĞLJEĞƞůŝdžĨŽƌǁĂƚĐŚŝŶŐƉƌŽŐƌĂŵŵĞƐĂŶĚĮůŵƐĨŽůůŽǁĞĚďLJůůϰ;ϮϲйͿ ƐƉĞŶĚǁĂƚĐŚŝŶŐŚĂƐĨĂůůĞŶƐŝŶĐĞŽƚŚĞƌƚŚĂŶůŝǀĞďƌŽĂĚĐĂƐƚdsƚŚĞLJƵƐĞĚƚŽǁĂƚĐŚdsƉƌŽŐƌĂŵŵĞƐĂŶĚ ĂŶĚĮůŵƐĨŽůůŽǁĞĚďLJůůϰ;ϮϲйͿ ƐƉĞŶĚǁĂƚĐŚŝŶŐŚĂƐĨĂůůĞŶƐŝŶĐĞϮϬϭϬ͕ǁŝƚŚĂĚĞĐůŝŶĞŝŶĂǀĞƌĂŐĞ ƵƐĞĚƚŽǁĂƚĐŚdsƉƌŽŐƌĂŵŵĞƐĂŶĚĂŶĚĮůŵƐĨŽůůŽǁĞĚďLJůůϰ;ϮϲйͿĂŶĚŵĂnjŽŶWƌŝŵĞ;ϮϬйͿ͕DLJϱ ϮϬϭϬ͕ǁŝƚŚĂĚĞĐůŝŶĞŝŶĂǀĞƌĂŐĞƵƐĞĚƚŽǁĂƚĐŚdsƉƌŽŐƌĂŵŵĞƐĂŶĚĮůŵƐ͕ŝWůĂLJĞƌǁĂƐƚŚĞŵŽƐƚ ĂŶĚŵĂnjŽŶWƌŝŵĞ;ϮϬйͿ͕DLJϱ ϮϬϭϬ͕ǁŝƚŚĂĚĞĐůŝŶĞŝŶĂǀĞƌĂŐĞĚĂŝůLJǀŝĞǁŝŶŐƟŵĞŽĨϯϲŵŝŶƵƚĞƐ ĮůŵƐ͕ŝWůĂLJĞƌǁĂƐƚŚĞŵŽƐƚĂŶĚŵĂnjŽŶWƌŝŵĞ;ϮϬйͿ͕DLJϱ;ϭϴйͿĂŶĚ&ĂĐĞŬ;ϭϲйͿ͕ǁŝƚŚ ĚĂŝůLJǀŝĞǁŝŶŐƟŵĞŽĨϯϲŵŝŶƵƚĞƐĮůŵƐ͕ŝWůĂLJĞƌǁĂƐƚŚĞŵŽƐƚƉŽƉƵůĂƌĐŚŽŝĐĞ͕ǁŝƚŚϲϯйŽĨh< ;ϭϴйͿĂŶĚ&ĂĐĞŬ;ϭϲйͿ͕ǁŝƚŚ ĚĂŝůLJǀŝĞǁŝŶŐƟŵĞŽĨϯϲŵŝŶƵƚĞƐ;ͲϭϰйͿƚŽϯŚŽƵƌƐϱϭŵŝŶƵƚĞƐƉĞƌ ƉŽƉƵůĂƌĐŚŽŝĐĞ͕ǁŝƚŚϲϯйŽĨh<;ϭϴйͿĂŶĚ&ĂĐĞŬ;ϭϲйͿ͕ǁŝƚŚĂůůŽƚŚĞƌƐĞƌǀŝĐĞƐďĞůŽǁϭϱй͘ ;ͲϭϰйͿƚŽϯŚŽƵƌƐϱϭŵŝŶƵƚĞƐƉĞƌƉŽƉƵůĂƌĐŚŽŝĐĞ͕ǁŝƚŚϲϯйŽĨh< ĂůůŽƚŚĞƌƐĞƌǀŝĐĞƐďĞůŽǁϭϱй͘ ;ͲϭϰйͿƚŽϯŚŽƵƌƐϱϭŵŝŶƵƚĞƐƉĞƌ ĂůůŽƚŚĞƌƐĞƌǀŝĐĞƐďĞůŽǁϭϱй͘ 2 Television and audio-visual content Communications Market Report 2017 - United Kingdom &ŝŐƵƌĞϭ͘ϲ͗&ŝŐƵƌĞϭ͘ϲ͗dŚĞƉƌŽƉŽƌƟŽŶŽĨĂĚƵůƚƐǁŚŽƵƐĞĚŝīĞƌĞŶƚƐĞƌǀŝĐĞƐĨŽƌǁĂƚĐŚŝŶŐdsƉƌŽŐƌĂŵŵĞƐͬĮůŵƐ;йͿdŚĞƉƌŽƉŽƌƟŽŶŽĨĂĚƵůƚƐǁŚŽƵƐĞĚŝīĞƌĞŶƚƐĞƌǀŝĐĞƐĨŽƌǁĂƚĐŚŝŶŐdsƉƌŽŐƌĂŵŵĞƐͬĮůŵƐ;йͿ &ŝŐƵƌĞϭ͘ϲ͗dŚĞƉƌŽƉŽƌƟŽŶŽĨĂĚƵůƚƐǁŚŽƵƐĞĚŝīĞƌĞŶƚƐĞƌǀŝĐĞƐĨŽƌǁĂƚĐŚŝŶŐdsƉƌŽŐƌĂŵŵĞƐͬĮůŵƐ;йͿ 63%63% 40%40% 38%38% 31%31% 28%28% 63% 40% 38% 31% 28% TVTV TV ZĞĐŽƌĚĞĚdsZĞĐŽƌĚĞĚds ZĞĐŽƌĚĞĚds 2.2 The TV and audio-visual industries

26%26% 20%20% 18%18% 16%16% 12%12% 26% 20% 18% 16% 12% dŚŝƐƐĞĐƟŽŶůŽŽŬƐĂƚĂƌĂŶŐĞŽĨŵĞƚƌŝĐƐ /ƚĂůƐŽƉƌŽǀŝĚĞƐĐŽŵŵĞŶƚĂƌLJŽŶ ĨƌŽŵƚŚĞďƌŽĂĚĐĂƐƚƚĞůĞǀŝƐŝŽŶŝŶĚƵƐƚƌLJ͕ ĐŽŶƐƵŵĞƌĐŚŽŝĐĞŝŶƚŚĞƉĂLJͲdsŵĂƌŬĞƚ͘ ŝŶĐůƵĚŝŶŐƌĞǀĞŶƵĞƐ͕ĐŽŶƚĞŶƚƐƉĞŶĚĂŶĚ It then goes on to provide an update ďƌŽĂĚĐĂƐƚŚŽƵƌƐ͘ ŽŶƌĞĐĞŶƚĚĞǀĞůŽƉŵĞŶƚƐŝŶƚŚĞůŽĐĂůds ƐĞĐƚŽƌ͘ tŚĞŶǁĞŐƌŽƵƉƚŚĞƐĞƚŽŐĞƚŚĞƌŝŶƚŽtŚĞŶǁĞŐƌŽƵƉƚŚĞƐĞƚŽŐĞƚŚĞƌŝŶƚŽ ,Ƶď͕DLJϱͿƵƐĞĚďLJϲϳйŽĨĂĚƵůƚƐ,Ƶď͕DLJϱͿƵƐĞĚďLJϲϳйŽĨĂĚƵůƚƐ sŝƌŐŝŶDĞĚŝĂ;ϮϯйͿ͘ĚƵůƚƐĂŐĞĚϭϲͲsŝƌŐŝŶDĞĚŝĂ;ϮϯйͿ͘ĚƵůƚƐĂŐĞĚϭϲͲ tŚĞŶǁĞŐƌŽƵƉƚŚĞƐĞƚŽŐĞƚŚĞƌŝŶƚŽtypestypes of ofservices, services,,Ƶď͕DLJϱͿƵƐĞĚďLJϲϳйŽĨĂĚƵůƚƐ we we can can see see that that ĐŽŵďŝŶĞĚ͕ĨŽůůŽǁĞĚďLJƐƵďƐĐƌŝƉƟŽŶĐŽŵďŝŶĞĚ͕ĨŽůůŽǁĞĚďLJƐƵďƐĐƌŝƉƟŽŶsŝƌŐŝŶDĞĚŝĂ;ϮϯйͿ͘ĚƵůƚƐĂŐĞĚϭϲͲϮϰĂƌĞŵŽƐƚůŝŬĞůLJƚŽƵƐĞŵŽƐƚƚLJƉĞƐϮϰĂƌĞŵŽƐƚůŝŬĞůLJƚŽƵƐĞŵŽƐƚƚLJƉĞƐ types of services, we can seeƚŚĞŵŽƐƚƉŽƉƵůĂƌŽŶͲĚĞŵĂŶĚĂŶĚƚŚĞŵŽƐƚƉŽƉƵůĂƌŽŶͲĚĞŵĂŶĚĂŶĚ that ĐŽŵďŝŶĞĚ͕ĨŽůůŽǁĞĚďLJƐƵďƐĐƌŝƉƟŽŶŽŶͲĚĞŵĂŶĚĂŶĚƐƚƌĞĂŵŝŶŐƐĞƌǀŝĐĞƐŽŶͲĚĞŵĂŶĚĂŶĚƐƚƌĞĂŵŝŶŐƐĞƌǀŝĐĞƐϮϰĂƌĞŵŽƐƚůŝŬĞůLJƚŽƵƐĞŵŽƐƚƚLJƉĞƐŽĨƐĞƌǀŝĐĞƐ͕ŝŶĐůƵĚŝŶŐƚŚƌĞĞͲƋƵĂƌƚĞƌƐŽĨƐĞƌǀŝĐĞƐ͕ŝŶĐůƵĚŝŶŐƚŚƌĞĞͲƋƵĂƌƚĞƌƐ ATON IK ƚŚĞŵŽƐƚƉŽƉƵůĂƌŽŶͲĚĞŵĂŶĚĂŶĚATONƐƚƌĞĂŵŝŶŐƐĞƌǀŝĐĞƐĨŽƌǁĂƚĐŚŝŶŐƐƚƌĞĂŵŝŶŐƐĞƌǀŝĐĞƐĨŽƌǁĂƚĐŚŝŶŐIK ŽŶͲĚĞŵĂŶĚĂŶĚƐƚƌĞĂŵŝŶŐƐĞƌǀŝĐĞƐƐƵĐŚĂƐŵĂnjŽŶWƌŝŵĞĂŶĚEĞƞůŝdžƐƵĐŚĂƐŵĂnjŽŶWƌŝŵĞĂŶĚEĞƞůŝdžŽĨƐĞƌǀŝĐĞƐ͕ŝŶĐůƵĚŝŶŐƚŚƌĞĞͲƋƵĂƌƚĞƌƐǁŚŽƐĂLJƚŚĞLJƵƐĞƐƵďƐĐƌŝƉƟŽŶǁŚŽƐĂLJƚŚĞLJƵƐĞƐƵďƐĐƌŝƉƟŽŶ ATON IK ATON IK D I GITAL ƐƚƌĞĂŵŝŶŐƐĞƌǀŝĐĞƐĨŽƌǁĂƚĐŚŝŶŐD I GITƉƌŽŐƌĂŵŵĞƐĂŶĚĮůŵƐĂƌĞƚŚĞAƉƌŽŐƌĂŵŵĞƐĂŶĚĮůŵƐĂƌĞƚŚĞL ƐƵĐŚĂƐŵĂnjŽŶWƌŝŵĞĂŶĚEĞƞůŝdž;ϰϱйͿ͕ƐŽĐŝĂůŵĞĚŝĂƉůĂƞŽƌŵƐƐƵĐŚ;ϰϱйͿ͕ƐŽĐŝĂůŵĞĚŝĂƉůĂƞŽƌŵƐƐƵĐŚǁŚŽƐĂLJƚŚĞLJƵƐĞƐƵďƐĐƌŝƉƟŽŶŽŶͲĚĞŵĂŶĚĂŶĚƐƚƌĞĂŵŝŶŐƐĞƌǀŝĐĞƐŽŶͲĚĞŵĂŶĚĂŶĚƐƚƌĞĂŵŝŶŐƐĞƌǀŝĐĞƐ2.2.1 Overview of TV industry revenue D I GITA L D I GITA L ƉƌŽŐƌĂŵŵĞƐĂŶĚĮůŵƐĂƌĞƚŚĞƉƵďůŝĐƐĞƌǀŝĐĞďƌŽĂĚĐĂƐƚĞƌƐ͛ŽŶůŝŶĞƉƵďůŝĐƐĞƌǀŝĐĞďƌŽĂĚĐĂƐƚĞƌƐ͛ŽŶůŝŶĞ;ϰϱйͿ͕ƐŽĐŝĂůŵĞĚŝĂƉůĂƞŽƌŵƐƐƵĐŚĂƐ&ĂĐĞŬĂŶĚzŽƵdƵďĞ;ϰϭйͿĂŶĚĂƐ&ĂĐĞŬĂŶĚzŽƵdƵďĞ;ϰϭйͿĂŶĚŽŶͲĚĞŵĂŶĚĂŶĚƐƚƌĞĂŵŝŶŐƐĞƌǀŝĐĞƐ;ϳϲйͿĂŶĚďƌŽĂĚĐĂƐƚĞƌŽŶͲĚĞŵĂŶĚ;ϳϲйͿĂŶĚďƌŽĂĚĐĂƐƚĞƌŽŶͲĚĞŵĂŶĚ ƉƵďůŝĐƐĞƌǀŝĐĞďƌŽĂĚĐĂƐƚĞƌƐ͛ŽŶůŝŶĞƐĞƌǀŝĐĞƐ;ŝWůĂLJĞƌ͕ůůϰ͕/dsƐĞƌǀŝĐĞƐ;ŝWůĂLJĞƌ͕ůůϰ͕/dsĂƐ&ĂĐĞŬĂŶĚzŽƵdƵďĞ;ϰϭйͿĂŶĚƉĂLJdsƐĞƌǀŝĐĞƐƐƵĐŚĂƐ^ŬLJdsĂŶĚƉĂLJdsƐĞƌǀŝĐĞƐƐƵĐŚĂƐ^ŬLJdsĂŶĚ;ϳϲйͿĂŶĚďƌŽĂĚĐĂƐƚĞƌŽŶͲĚĞŵĂŶĚĂŶĚƐƚƌĞĂŵŝŶŐƐĞƌǀŝĐĞƐ;ϳϱйͿ͘ĂŶĚƐƚƌĞĂŵŝŶŐƐĞƌǀŝĐĞƐ;ϳϱйͿ͘ ƐĞƌǀŝĐĞƐ;ŝWůĂLJĞƌ͕ůůϰ͕/ds ƉĂLJdsƐĞƌǀŝĐĞƐƐƵĐŚĂƐ^ŬLJdsĂŶĚ ĂŶĚƐƚƌĞĂŵŝŶŐƐĞƌǀŝĐĞƐ;ϳϱйͿ͘

1313 dŚĞh<dsŝŶĚƵƐƚƌLJŐƌĞǁďLJϭйŝŶƌĞĂůƚĞƌŵƐŝŶϮϬϭϲĂŶĚǁĂƐǁŽƌƚŚάϭϯ͘ϴďŶ 13 1313 13 dŚĞh<ďƌŽĂĚĐĂƐƚƚĞůĞǀŝƐŝŽŶ ĂǀĞƌĂŐĞƌĞǀĞŶƵĞƉĞƌƵŶŝƚ;ZWhͿŝŶ ƉƌĞǀŝŽƵƐLJĞĂƌŝŶƌĞĂůƚĞƌŵƐ͘dŚŝƐŝƐ 1313 13 ŝŶĚƵƐƚƌLJŐĞŶĞƌĂƚĞĚάϭϯ͘ϴďŶŝŶ ƚĞůĞǀŝƐŝŽŶƐƵďƐĐƌŝƉƟŽŶĚĂƚĂKĨĐŽŵ ĂĐŽŶƟŶƵĂƟŽŶŽĨƚŚĞƐůŝŐŚƚĚĞĐůŝŶĞ 1313 13 ƌĞǀĞŶƵĞĚƵƌŝŶŐϮϬϭϲ͕ĂάϬ͘ϭďŶ ŚĂƐĐŽůůĞĐƚĞĚ͕ǁŚŝĐŚŵĂLJƉĂƌƟĂůůLJ ŝŶƚĞůĞǀŝƐŝŽŶƌĞǀĞŶƵĞŝŶƌĞĂů 1313 13 ;ϭ͘ϬйͿƌŝƐĞŽŶϮϬϭϱŝŶƌĞĂůƚĞƌŵƐ͘ ĞdžƉůĂŝŶƚŚŝƐƌŝƐĞ͘EĞƚĂĚǀĞƌƟƐŝŶŐ ƚĞƌŵƐŽǀĞƌƚŚĞƉĂƐƚĮǀĞLJĞĂƌƐ͘ 1313 dŚŝƐǁĂƐƉƌŝŵĂƌŝůLJĚƌŝǀĞŶďLJĂŶ ƌĞǀĞŶƵĞƌĞŵĂŝŶĞĚŇĂƚ;ĂŶĂůLJƐĞĚ ZĞǀĞŶƵĞĨƌŽŵŽƚŚĞƌƐŽƵƌĐĞƐƐƵĐŚ 13 ATON IK AT1313 ON IK ŝŶĐƌĞĂƐĞŝŶƉĂLJͲdsƐƵďƐĐƌŝƉƟŽŶ ŝŶŵŽƌĞĚĞƚĂŝůŝŶƐĞĐƟŽŶϭ͘ϭ͘ϰͿ͘ ĂƐdsƐŚŽƉƉŝŶŐ͕ƐƉŽŶƐŽƌƐŚŝƉĂŶĚATON IK ATON IK 13 ϭŚƩƉƐ͗ͬͬǁǁǁ͘ŽĨĐŽŵ͘ŽƌŐ͘ƵŬͬƌĞƐĞĂƌĐŚͲĂŶĚͲĚĂƚĂͬŵƵůƟͲƐĞĐƚŽƌͲƌĞƐĞĂƌĐŚͬĚŝŐŝƚĂůͲĚĂLJ ϭŚƩƉƐ͗ͬͬǁǁǁ͘ŽĨĐŽŵ͘ŽƌŐ͘ƵŬͬƌĞƐĞĂƌĐŚͲĂŶĚͲĚĂƚĂͬŵƵůƟͲƐĞĐƚŽƌͲƌĞƐĞĂƌĐŚͬĚŝŐŝƚĂůͲĚĂLJ D I GITAL D I GITAϮ L D I GITA L D I GITA L ϭ 13 Ϯ ĚƵůƚƐϭϲн͘ĂƐĞĚŽŶǀŝĞǁŝŶŐƚŽƐĐŚĞĚƵůĞĚ͕ďƌŽĂĚĐĂƐƚdsŽŶdsƐĞƚƐŝŶĐůƵĚŝŶŐůŝǀĞĂƚƚŚĞƟŵĞŽĨďƌŽĂĚĐĂƐƚƉůƵƐ ŚƩƉƐ͗ͬͬǁǁǁ͘ŽĨĐŽŵ͘ŽƌŐ͘ƵŬͬƌĞƐĞĂƌĐŚͲĂŶĚͲĚĂƚĂͬŵƵůƟͲƐĞĐƚŽƌͲƌĞƐĞĂƌĐŚͬĚŝŐŝƚĂůͲĚĂLJ13 ĚƵůƚƐϭϲн͘ĂƐĞĚŽŶǀŝĞǁŝŶŐƚƟŵĞͲƐŚŝŌĞĚǀŝĞǁŝŶŐƚŚƌŽƵŐŚsZƐĂŶĚĐĂƚĐŚͲƵƉdsƵƉƚŽƐĞǀĞŶĚĂLJƐĂŌĞƌƚƌĂŶƐŵŝƐƐŝŽŶ͘ŽƐĐŚĞĚƵůĞĚ͕ďƌŽĂĚĐĂƐƚdsŽŶdsƐĞƚƐŝŶĐůƵĚŝŶŐůŝǀĞĂƚƚŚĞƟŵĞŽĨďƌŽĂĚĐĂƐƚƉůƵƐ ƌĞǀĞŶƵĞ͕ƵƉďLJϮ͘ϴйLJĞĂƌŽŶLJĞĂƌ ŝŶƚĞƌĂĐƟǀĞƐĞƌǀŝĐĞƐǁĂƐƵƉďLJ ƟŵĞͲƐŚŝŌĞĚǀŝĞǁŝŶŐƚŚƌŽƵŐŚsZƐĂŶĚĐĂƚĐŚͲƵƉdsƵƉƚŽƐĞǀĞŶĚĂLJƐĂŌĞƌƚƌĂŶƐŵŝƐƐŝŽŶ͘ 13 ϮĚƵůƚƐϭϲн͘ĂƐĞĚŽŶǀŝĞǁŝŶŐƚŽƐĐŚĞĚƵůĞĚ͕ďƌŽĂĚĐĂƐƚdsŽŶdsƐĞƚƐŝŶĐůƵĚŝŶŐůŝǀĞĂƚƚŚĞƟŵĞŽĨďƌŽĂĚĐĂƐƚƉůƵƐ KĨĐŽŵĞƐƟŵĂƚĞƐƚŚĂƚƚŚĞ ƟŵĞͲƐŚŝŌĞĚǀŝĞǁŝŶŐƚŚƌŽƵŐŚsZƐĂŶĚĐĂƚĐŚͲƵƉdsƵƉƚŽƐĞǀĞŶĚĂLJƐĂŌĞƌƚƌĂŶƐŵŝƐƐŝŽŶ͘ ƚŽƌĞĂĐŚάϲ͘ϰďŶ͘/ŶƌĞĐĞŶƚLJĞĂƌƐ͕ ϴ͘ϴйŝŶƌĞĂůƚĞƌŵƐLJĞĂƌŽŶLJĞĂƌĂƚ ĂůůŽĐĂƚĞĚάϮ͘ϱďŶƚŽƚĞůĞǀŝƐŝŽŶ ƚŚĞƌĞŚĂƐďĞĞŶĂƐŵĂůůƌŝƐĞŝŶƚŚĞ άϬ͘ϴďŶ͕ƚŚĞƐĂŵĞĂƐŝƚǁĂƐŝŶϮϬϭϭ͘ ŝŶϮϬϭϲ͕ĂĚƌŽƉŽĨϯ͘ϰйŽŶƚŚĞ 2 Television and audio-visual content Communications Market Report 2017 - United Kingdom

&ŝŐƵƌĞϮ͘ϭϭ͗dŽƚĂůďƌŽĂĚĐĂƐƚdsŝŶĚƵƐƚƌLJƌĞǀĞŶƵĞ͕ďLJƐŽƵƌĐĞ 7 Growth Total Broadcast TV Industry Revenues 1 year 5 year KŶůŝŶĞĂƵĚŝŽǀŝƐƵĂůƌĞǀĞŶƵĞƐŐƌĞǁďLJϮϯйŝŶϮϬϭϲďƵƚƌĞŵĂŝŶƐŵĂůůĐŽŵƉĂƌĞĚƚŽƚƌĂĚŝƟŽŶĂůCAGR £13.3bn £13.1bn £13.1bn £13.3bn £13.7bn £13.8bn ƚĞůĞǀŝƐŝŽŶƌĞǀĞŶƵĞƐŽƵƌĐĞƐ 1.0% 0.7% Total £6.4bn £6.0bn £6.0bn £6.2bn ĐĐŽƌĚŝŶŐƚŽŵƉĞƌĞŶĂůLJƐŝƐ͕£5.9bn £5.8bn ŐĞŶĞƌĂƚĞĚάϳϬϬŵŝŶϮϬϭϲ͕ƵƉϭϱй ĂŶĚĚŝŐŝƚĂůƌĞŶƚĂůďŽƚŚĞdžƉĞƌŝĞŶĐĞĚ ŽŶůŝŶĞĂƵĚŝŽǀŝƐƵĂůƌĞǀĞŶƵĞƐ ŽŶƚŚĞƉƌĞǀŝŽƵƐLJĞĂƌ͘^ƵďƐĐƌŝƉƟŽŶ ƐŝŶŐůĞĚŝŐŝƚƉĞƌĐĞŶƚĂŐĞŐƌŽǁƚŚ͘2.8% 1.8% Subscription revenue ŐĞŶĞƌĂƚĞĚďLJƐƵďƐĐƌŝƉƟŽŶƐ͕ ƌĞǀĞŶƵĞĨƌŽŵƐĞƌǀŝĐĞƐƐƵĐŚĂƐ £4.1bn £4.1bntĞĚŝƐĐƵƐƐŚŽǁƚŚĞƚĂŬĞͲƵƉ ĂĚǀĞƌƟƐŝŶŐ͕ƌĞŶƚĂůĂŶĚƌĞƚĂŝů£3.9bn EĞƞůŝdžĂŶĚŵĂnjŽŶWƌŝŵĞsŝĚĞŽ£3.9bn £3.7bn £3.8bn ŽĨŽŶͲĚĞŵĂŶĚĂŶĚƐƚƌĞĂŵŝŶŐNet advertising ŐƌĞǁďLJϮϯйLJĞĂƌŽŶLJĞĂƌŝŶ ǁĂƐƚŚĞƐĞĐŽŶĚůĂƌŐĞƐƚĐŽŶƚƌŝďƵƚŽƌ -0.4% 1.0% ƐĞƌǀŝĐĞƐ͕ŝŶĐůƵĚŝŶŐƐƵďƐĐƌŝƉƟŽŶrevenue ƌĞĂůƚĞƌŵƐ͕ƚŽƌĞĂĐŚάϭ͘ϲϱďŶ͘£2.8bn £2.8bn £2.7bnƚŽƌĞǀĞŶƵĞƐŝŶϮϬϭϲ͕Ăƚάϲϲϰŵ͘dŚŝƐ£2.7bn £2.6bn £2.5bnƐĞƌǀŝĐĞƐƐƵĐŚĂƐEĞƞůŝdžĂŶĚ ƌĞƉƌĞƐĞŶƚĞĚĂŶŶƵĂůŐƌŽǁƚŚŽĨϰϯй KŶůŝŶĞĂĚǀĞƌƟƐĞƌͲĨƵŶĚĞĚǀŝĚĞŽ͕ ŵĂnjŽŶWƌŝŵĞ͕ŝƐĐŚĂŶŐŝŶŐƚŚĞ-3.4% -1.9% BBC income ĂŶĚĂĐŽŵƉŽƵŶĚĂŶŶƵĂůŐƌŽǁƚŚ ŝŶĐůƵĚŝŶŐƐĞƌǀŝĐĞƐƐƵĐŚĂƐzŽƵdƵďĞ͕ dsůĂŶĚƐĐĂƉĞŝŶƚŚĞDĂƌŬĞƚŝŶallocated to TV £0.8bn £0.8bn £0.7bnƌĂƚĞŽĨϭϭϳйŽǀĞƌƚŚĞůĂƐƚĮǀĞLJĞĂƌƐ͘£0.7bn £0.7bn £0.8bn 51 ƚŚĞ/ds,Ƶď͕ůůϰĂŶĚDLJϱ ŽŶƚĞdžƚƐĞĐƟŽŶŽĨƚŚŝƐƌĞƉŽƌƚ͘ ŝŐŝƚĂůƌĞƚĂŝů;ĚŽǁŶůŽĂĚƚŽŽǁŶͿ 8.8% -0.2% Other revenue 51 2011 2012 2013 2014 2015 2016 51 &ŝŐƵƌĞϮ͘ϭϯ͗KŶůŝŶĞĂƵĚŝŽǀŝƐƵĂůƌĞǀĞŶƵĞƐ Source:KĨĐŽŵͬďƌŽĂĚĐĂƐƚĞƌƐ͘ Note: Growth 51 &ŝŐƵƌĞƐĞdžƉƌĞƐƐĞĚŝŶƌĞĂůƚĞƌŵƐ;ϮϬϭϲƉƌŝĐĞƐͿĂŶĚƌĞƉůĂĐĞƉƌĞǀŝŽƵƐKĨĐŽŵƌĞǀĞŶƵĞĚĂƚĂĨŽƌdsŝŶĚƵƐƚƌLJ͕ŽǁŝŶŐƚŽƌĞƐƚĂƚĞŵĞŶƚƐ ĂŶĚŝŵƉƌŽǀĞŵĞŶƚƐŝŶŵĞƚŚŽĚŽůŽŐŝĞƐ͚͘^ƵďƐĐƌŝƉƟŽŶƌĞǀĞŶƵĞ͛ŝŶĐůƵĚĞƐKĨĐŽŵ͛ƐĞƐƟŵĂƚĞƐŽĨ^ŬLJh<͕sŝƌŐŝŶDĞĚŝĂ͕ddsĂŶĚdĂůŬdĂůŬOnline and Audio Visual Revenues 1 year 5 year ƐƵďƐĐƌŝďĞƌƌĞǀĞŶƵĞĂƐǁĞůůĂƐ͕ŝŶƉƌĞǀŝŽƵƐLJĞĂƌƐ͕ƚŚĂƚŽĨ^WEĂŶĚdŽƉhƉdsŝŶƚŚĞh<;ZĞƉƵďůŝĐŽĨ/ƌĞůĂŶĚƌĞǀĞŶƵĞŝƐĞdžĐůƵĚĞĚͿ͘/ƚCAGR 51 ĂůƐŽĞdžĐůƵĚĞƐƌĞǀĞŶƵĞŐĞŶĞƌĂƚĞĚďLJďƌŽĂĚďĂŶĚĂŶĚƚĞůĞƉŚŽŶLJ͘ŝŶĐŽŵĞĂůůŽĐĂƚĞĚƚŽdsŝŶĐůƵĚĞƐŵŽŶĞLJĂůůŽĐĂƚĞĚƚŽ^ϰĂƐǁĞůů ĂƐƚĞůĞǀŝƐŝŽŶďƌŽĂĚĐĂƐƟŶŐ͚͘KƚŚĞƌ͛ŝŶĐůƵĚĞƐdsƐŚŽƉƉŝŶŐ͕ƐƉŽŶƐŽƌƐŚŝƉ͕ŝŶƚĞƌĂĐƟǀĞ;ŝŶĐůƵĚŝŶŐƉƌĞŵŝƵŵͲƌĂƚĞƚĞůĞƉŚŽŶLJƐĞƌǀŝĐĞƐͿ͕£1,653m 23% 43% Total 51 ƉƌŽŐƌĂŵŵĞƐĂůĞƐĂŶĚ^ϰ͛ƐŐƌĂŶƚĨƌŽŵƚŚĞD^͘dŽƚĂůƐŵĂLJŶŽƚĞƋƵĂůƚŚĞƐƵŵŽĨƚŚĞĐŽŵƉŽŶĞŶƚƐĚƵĞƚŽƌŽƵŶĚŝŶŐ͘ £1,330m 51 Ad funded £700m 15% 38% video 51 £903m £604m 43% 117% OTT Subscription £594m £400m £664m 9% 20% Digit al Rent al ATON IK ATON IK £367m £264m £461m ATON IK ATON IK D I GITAL D I GITAL £252m £267m D I GITA L D I GITA L £170m £153m £128m £96m £107m £118m £52m £69m £62m £158m £171m 7% 19% Digit al Ret ail £67m £83m £108m £140m 2011 2012 2013 2014 2015 2016

Source: ŵƉĞƌĞŶĂůLJƐŝƐͬĞŶŝƚŚKƉƟŵĞĚŝĂ͘ĚͲĨƵŶĚĞĚǀŝĚĞŽŝŶĐůƵĚĞƐĐĂƚĐŚͲƵƉƐĞƌǀŝĐĞƐ͕zŽƵdƵďĞĂŶĚŽƚŚĞƌĂĚͲĨƵŶĚĞĚǀŝĚĞŽƐƉĞŶĚ͘ Kdd^ƵďƐĐƌŝƉƟŽŶŝŶĐůƵĚĞƐEĞƞůŝdž͕ŵĂnjŽŶWƌŝŵĞsŝĚĞŽ͕ŝƐŶĞLJůŝĨĞĂŶĚEŽǁds͘ŝŐŝƚĂůƌĞŶƚĂůŝŶĐůƵĚĞƐŽŶĞͲŽīƉĂLJͲƉĞƌͲǀŝĞǁŽĨĮůŵƐ ĂŶĚǀŝĚĞŽďƵƚĞdžĐůƵĚĞƐƐƉŽƌƚ͘ŝŐŝƚĂůZĞƚĂŝůĮŐƵƌĞŝƐďĂƐĞĚŽŶƚŚĞƌŝƟƐŚƐƐŽĐŝĂƟŽŶŽĨ^ĐƌĞĞŶŶƚĞƌƚĂŝŶŵĞŶƚƐƉĞŶĚĮŐƵƌĞƐĞdžĐůƵƐŝǀĞ TRADITIONALŽĨsdĂŶĚĐŽǀĞƌƐ͚ĚŽǁŶůŽĂĚƚŽŽǁŶ͛ƉƵƌĐŚĂƐĞƐ͘ůůĮŐƵƌĞƐĂƌĞŝŶƌĞĂůƚĞƌŵƐ;ϮϬϭϲƉƌŝĐĞƐͿ͘ TV ADVERTISING RESILIENT WITH GROWTH IN ONLINE TV ADVERTISING Note:&ŝŐƵƌĞĨŽƌϮϬϭϭĂĚĨƵŶĚĞĚǀŝĚĞŽŝƐĂŶĞƐƟŵĂƚĞĂƐĂĐƚƵĂůĮŐƵƌĞƐĂƌĞŶŽƚĂǀĂŝůĂďůĞ͘ ATON IK ATON IK ATON IK ATON IK D I GITAL D I GITAL 53 D I GITA L D I GITA L

Source: Ofcom, The Communication Market Report Aug 2017 53

53

53

53

53

53

53 2 Television and audio-visual content Communications Market Report 2017 - United Kingdom

KŶůŝŶĞĂƵĚŝŽǀŝƐƵĂůƌĞǀĞŶƵĞƐŐƌĞǁďLJϮϯйŝŶϮϬϭϲďƵƚƌĞŵĂŝŶƐŵĂůůĐŽŵƉĂƌĞĚƚŽƚƌĂĚŝƟŽŶĂů ƚĞůĞǀŝƐŝŽŶƌĞǀĞŶƵĞƐŽƵƌĐĞƐ

ĐĐŽƌĚŝŶŐƚŽŵƉĞƌĞŶĂůLJƐŝƐ͕ ŐĞŶĞƌĂƚĞĚάϳϬϬŵŝŶϮϬϭϲ͕ƵƉϭϱй ĂŶĚĚŝŐŝƚĂůƌĞŶƚĂůďŽƚŚĞdžƉĞƌŝĞŶĐĞĚ ŽŶůŝŶĞĂƵĚŝŽǀŝƐƵĂůƌĞǀĞŶƵĞƐ ŽŶƚŚĞƉƌĞǀŝŽƵƐLJĞĂƌ͘^ƵďƐĐƌŝƉƟŽŶ ƐŝŶŐůĞĚŝŐŝƚƉĞƌĐĞŶƚĂŐĞŐƌŽǁƚŚ͘ ŐĞŶĞƌĂƚĞĚďLJƐƵďƐĐƌŝƉƟŽŶƐ͕ ƌĞǀĞŶƵĞĨƌŽŵƐĞƌǀŝĐĞƐƐƵĐŚĂƐ tĞĚŝƐĐƵƐƐŚŽǁƚŚĞƚĂŬĞͲƵƉ ĂĚǀĞƌƟƐŝŶŐ͕ƌĞŶƚĂůĂŶĚƌĞƚĂŝů EĞƞůŝdžĂŶĚŵĂnjŽŶWƌŝŵĞsŝĚĞŽ ŽĨŽŶͲĚĞŵĂŶĚĂŶĚƐƚƌĞĂŵŝŶŐ ŐƌĞǁďLJϮϯйLJĞĂƌŽŶLJĞĂƌŝŶ ǁĂƐƚŚĞƐĞĐŽŶĚůĂƌŐĞƐƚĐŽŶƚƌŝďƵƚŽƌ ƐĞƌǀŝĐĞƐ͕ŝŶĐůƵĚŝŶŐƐƵďƐĐƌŝƉƟŽŶ ƌĞĂůƚĞƌŵƐ͕ƚŽƌĞĂĐŚάϭ͘ϲϱďŶ͘ ƚŽƌĞǀĞŶƵĞƐŝŶϮϬϭϲ͕Ăƚάϲϲϰŵ͘dŚŝƐ ƐĞƌǀŝĐĞƐƐƵĐŚĂƐEĞƞůŝdžĂŶĚ ƌĞƉƌĞƐĞŶƚĞĚĂŶŶƵĂůŐƌŽǁƚŚŽĨϰϯй KŶůŝŶĞĂĚǀĞƌƟƐĞƌͲĨƵŶĚĞĚǀŝĚĞŽ͕ ŵĂnjŽŶWƌŝŵĞ͕ŝƐĐŚĂŶŐŝŶŐƚŚĞ ĂŶĚĂĐŽŵƉŽƵŶĚĂŶŶƵĂůŐƌŽǁƚŚ ŝŶĐůƵĚŝŶŐƐĞƌǀŝĐĞƐƐƵĐŚĂƐzŽƵdƵďĞ͕ dsůĂŶĚƐĐĂƉĞŝŶƚŚĞDĂƌŬĞƚŝŶ ƌĂƚĞŽĨϭϭϳйŽǀĞƌƚŚĞůĂƐƚĮǀĞLJĞĂƌƐ͘ ƚŚĞ/ds,Ƶď͕ůůϰĂŶĚDLJϱ ŽŶƚĞdžƚƐĞĐƟŽŶŽĨƚŚŝƐƌĞƉŽƌƚ͘ ŝŐŝƚĂůƌĞƚĂŝů;ĚŽǁŶůŽĂĚƚŽŽǁŶͿ

&ŝŐƵƌĞϮ͘ϭϯ͗KŶůŝŶĞĂƵĚŝŽǀŝƐƵĂůƌĞǀĞŶƵĞƐ

Growth 1 year 5 year CAGR

£1,653m 23% 43% Total

£1,330m Ad funded £700m 15% 38% video

£903m £604m 43% 117% OTT Subscription £594m £400m £664m 9% 20% Digit al Rent al ATON IK ATON IK £367m £264m £461m ATON IK ATON IK D I GITAL D I GITAL £252m £267m D I GITA L D I GITA L £170m £153m £128m £96m £107m £118m £52m £69m £62m £158m £171m 7% 19% Digit al Ret ail £67m £83m £108m £140m 2011 2012 2013 2014 2015 2016

Source: ŵƉĞƌĞŶĂůLJƐŝƐͬĞŶŝƚŚKƉƟŵĞĚŝĂ͘ĚͲĨƵŶĚĞĚǀŝĚĞŽŝŶĐůƵĚĞƐĐĂƚĐŚͲƵƉƐĞƌǀŝĐĞƐ͕zŽƵdƵďĞĂŶĚŽƚŚĞƌĂĚͲĨƵŶĚĞĚǀŝĚĞŽƐƉĞŶĚ͘ Kdd^ƵďƐĐƌŝƉƟŽŶŝŶĐůƵĚĞƐEĞƞůŝdž͕ŵĂnjŽŶWƌŝŵĞsŝĚĞŽ͕ŝƐŶĞLJůŝĨĞĂŶĚEŽǁds͘ŝŐŝƚĂůƌĞŶƚĂůŝŶĐůƵĚĞƐŽŶĞͲŽīƉĂLJͲƉĞƌͲǀŝĞǁŽĨĮůŵƐ ĂŶĚǀŝĚĞŽďƵƚĞdžĐůƵĚĞƐƐƉŽƌƚ͘ŝŐŝƚĂůZĞƚĂŝůĮŐƵƌĞŝƐďĂƐĞĚŽŶƚŚĞƌŝƟƐŚƐƐŽĐŝĂƟŽŶŽĨ^ĐƌĞĞŶŶƚĞƌƚĂŝŶŵĞŶƚƐƉĞŶĚĮŐƵƌĞƐĞdžĐůƵƐŝǀĞ ŽĨsdĂŶĚĐŽǀĞƌƐ͚ĚŽǁŶůŽĂĚƚŽŽǁŶ͛ƉƵƌĐŚĂƐĞƐ͘ůůĮŐƵƌĞƐĂƌĞŝŶƌĞĂůƚĞƌŵƐ;ϮϬϭϲƉƌŝĐĞƐͿ͘ Note:&ŝŐƵƌĞĨŽƌϮϬϭϭĂĚĨƵŶĚĞĚǀŝĚĞŽŝƐĂŶĞƐƟŵĂƚĞĂƐĂĐƚƵĂůĮŐƵƌĞƐĂƌĞŶŽƚĂǀĂŝůĂďůĞ͘ ATON IK ATON IK ATON IK ATON IK D I GITAL D I GITAL 53 D I GITA L D I GITA L

53

53

53 8 53

53

53

53 Enhanced metadata and AI driven personalisation tools creating bespoke dynamic content offers

The rise of produced Development of user social content and digital experience, search and Growth of virtual MVPD's first studios with evolving recommendation and next generation TV partnership models capability and content platforms navigation tools

Skinny Bundles ATON IK ATON IK D I GITA L D I GITA L

VR and enhanced viewing experiences

OTHER SIGNIFICANT TRENDS

ATON IK ATON IK D I GITA L D I GITA L ATON IK ATON IK D I GITA L D I GITA L

ATON IK ATON IK D I GITA L D I GITA L

9

THANK YOU

ATON IK ATON IK D I GITA L D I GITA L

Nathalie Lethbridge Email: [email protected] Website: atonikdigital.com ATON IK ATON IK D I GITA L D I GITA L