Figure 1.1

Communications industry revenues £billions 5 yr 1 year CAGR 60 52.4 54.2 54.8 53.4 53.4 53.2 1.2 1.1 1.1 1.1 1.2 1.1 - 0.3% 0.3% 10.6 11.0 11.2 11.1 11.7 12.3 Total 40 Radio 3.5% 0.6%

42.0 42.5 20 40.7 41.2 40.5 39.7 TV 4.9% 3.0%

Telecoms 0 -1.9% -0.5% 2006 2007 2008 2009 2010 2011

Note: Includes licence fee allocation for radio and TV, Figures are in nominal terms

1 Figure 1.2 Digital communications service availability UK UK Platform UK 2011 England Scotland Wales N Ireland 2010 change Fixed line 100% 100% 0pp 100% 100% 100% 100% 2G mobile1 99.7% n/a n/a 99.8% 99.2% 99.2% 98.7% 3G mobile2 99.1% n/a n/a 99.7% 97.0% 97.6% 88.3% Cable broadband3 44% 44% 0pp 47% 35% 23% 29% LLU4 92% 89% +3pp 93% 84% 88% 79% FTTC5 31% 16% +15pp 33% 10% 17% 87% Superfast broadband 60% 53% +7pp 62% 42% 34% 94% Digital satellite TV 98% 98% 0 - - - - Digital terrestrial TV6 97% 85% 12pp 98% 99% 98% 66% DAB BBC Network7 94.3% 92% +2.3pp 95.5% 90.9% 85.9% 85.4% DAB commercial 85% 85% - 90% 75% 60% - network (Digital One)8

Sources: Ofcom and operators: 1. Proportion of premises that have outdoor 2G mobile coverage from at least one operator. Data are not comparable with previous report due to changes made by the mobile operators in the methodology used to calculate coverage . 2. Proportion of premises that have outdoor 3G mobile coverage from at least one operator. Data are not comparable with previous report due to changes made by the mobile operators in the methodology used to calculate coverage. 3. Proportion of homes passed by Virgin Media’s cable broadband network, May 2012; excludes households that are not also able to receive Virgin Media’s cable fixed telecoms and/or pay-TV services. 4. Proportion of homes connected to an LLU-enabled BT local exchange, December 2011; 5. Ofcom estimate of proportion of homes able to receive FTT services based on the proportion of homes in FTTC-enabled BT local exchange areas, March 2012; 6. Calculations based on the estimated proportion of homes that can now receive at least 17 channels, versus the coverage of the DTT signal prior to digital switch-over. 7. BBC National DAB network coverage as of April 2012 http://stakeholders.ofcom.org.uk/broadcasting/radio/coverage/dab-coverage/ 8. Digital One coverage (indoor proportional method – households), April 2012 http://stakeholders.ofcom.org.uk/broadcasting/radio/coverage/dab-coverage/ 1 Figure 1.3 Household internet take-up

Proportion of adults (%)

100 Internet 80 76 80 71 72 74 7777 79 PC / laptop 68 67 73 75 74 76 68 71 72 64 67 67 Total 60 60 65 65 60 58 broadband 52 42 Fixed 40 41 38 39 broadband 31 32 27 30 Mobile data 21 user 20 20 17 12 15 13 Internet on mobile 0 Mobile 2005 Q1 2006 Q1 2007 Q1 2008 Q1 2009 Q1 2010 Q1 2011 Q1 2012 Q1 broadband

QE1: Does your household have a PC or laptop computer? / QE2: Do you or does anyone in your household have access to the Internet/Worldwide Web at HOME (via any device, e.g. PC, mobile phone etc)? / QE6: Which of these methods does your household use to connect to the Internet at home? Source: Ofcom technology tracker, Q1 2012. Base: All adults aged 16+ (n=3772) Note 1: “Internet on mobile” is the % of adults who use a mobile phone for any of the following activities: Instant messaging, Downloading Apps or programs, Email, Internet access, downloading video, video streaming, visiting social networking sites.Note 2: From,Q1 2009 the ‘Internet’ figure includes those who access the internet on mobile phones.

2 Figure 1.4 Take-up of key comms services Percentage point change vs 2011 +2 +1 -1 +2 +5 +1 +1 +5 +12 +5 +7 -4 +10 100%

80%

60% 98% 92% 84% 40% 76% 72% 55% 47% 20% 43% 39% 17% 10% 13% 11% 0% 5%

Source: Ofcom research, Q1 2012. DAB take-up from RAJAR Q1 2012. Base: All adults aged 16+ (n=3772) Base for DTV and Smart TV: Households with a TV Mobile telephony, smartphone and e-reader figures refer to personal take-up, all other figures refer to household take-up

3 Figure 1.5

Take-up of superfast broadband services

Superfast connections (millions) Superfast as a % of all connections 2.0 8 6.6 Superfast 1.5 5.5 6 connections 4.3 (left axis) 1.0 4 2.9 Superfast 2.1 1.4 as % of all 1.1 connections 0.5 1.2 2 0.9 (right axis) 0.6 0.4 0.2 0.0 0 Q4 2010 Q1 2011 Q2 Q3 Q4 Q1 2012

Source: Ofcom / operators Note: Includes estimates where Ofcom does not receive data from operators

4 Figure 1.6 Average time per day spent using communications services

Minutes per day 242 250 216 2006 200 182 175 2011 150

100

50 27 29 14 12 14 11 0 TV Radio Internet on PC/laptop Mobile phone Fixed phone

Source: Ofcom / BARB / RAJAR / Nielsen Netratings (home use only) / Strategy Analytics Note: Daily figures for mobile voice & data and fixed voice were calculated from monthly data on the assumption that there are 30.4 days in the average month; for the internet consumption figures relate to March of each year, and 31 days was used; the estimated internet consumption on a PC/laptop figures include the use of online applications such as streaming media and only include use at home; mobile telephony figures are Ofcom estimates based on message volume data and Ofcom Digital Day research conducted in 2010

5 Figure 1.7 Claimed volume of letters sent in an average Claimed volume of letters received in an month average week Estimated average Average number of letters 20 or more 1 30 or more 2 number of letters sent per month = 3.2 /cards received 10 to 20 items 5 20 to 30 items 7 = 8.5 per week or 34 per month 5 to 10 items 14 10 to 20 items 20

3 or 4 items 19 5 to 10 items 30

1 or 2 items 29 3 or 4 items 18

Don't always send 23 post each month 1 or 2 items 14 Don't always receive post Don't send mail 8 8 each week

Don't know 1 Don't know 1

0 20 0 20 % of consumers % of consumers Source: Ofcom Post Omnibus 2011 - fieldwork 1st Dec – 13th Dec 2011. Base: All consumers responsible for sending or receiving post (n= 3621). Question: ‘Approximately how many letters and cards, do you personally send in an average month? This should exclude any items you send from home in connection with running a business, if you do this from home. We will ask about parcels separately.’ Question: ‘Approximately how many letters or cards do you receive in an average week? Please don’t include parcels, we will ask you about these separately.’ 6 Figure 1.8 Use of converging platforms

Statistically significant year-on-year changes (percentage points)

+3 +2 +7 +4 +2 +6 +4 +2 +10 -10 -5 +14 - +3 +6 50

40

30 44 46 following (%) 20 39 40 39 39 40 31 35 10 23 16 17 14 11 8 0 their household does the Data over mobile Data over mobile Data over mobile Data over mobile Data over mobile Radio over internet Radio over internet Radio over internet Radio over internet Radio over internet TV/ video over internet TV/ video over internet TV/ video over internet TV/ video over internet TV/ video over internet Proportion of individuals who claim that someone in UK England Scotland Wales N Ireland

Source: Ofcom research, Quarter 1 2012 Base: All adults aged 16+ (n = 3772 UK, 2251 England, 500 Scotland, 513 Wales, 508 Northern Ireland) QE5A-B. Which, if any, of these do you or members of your household use the internet for whilst at home? QD28A-B. Which, if any, of the following activities, other than making and receiving calls, do you use your mobile for?/ Includes download free applications, download paid for applications, send/ 7 receive emails, accessing the internet, connecting to the internet using Wi-Fi, using VoIP service, download a new video clip, video streaming, TV streaming, accessing/ receiving, sports/ team news/ scores, accessing/ receiving news, use IM/ Instant messaging

7 A2 – Which one of these would you miss doing the most? Base: All adults aged 16+ (3244 in 2005, 2905 in 2007, 1824 in 2009, 2117 in 2010), adults aged 16-24 (530 in 2005, 413 in 2007, 253 in 2009, 295 in 2010), adult Source: Ofcom research, fieldwork carried out by Saville Rossiter-Base in April to May 2009 and September to October 2010

Figure 1.9 Which media activity UK adults would miss the most

Use a portable media 5 3 player (2009 onwards) 13 5 4 4 3 8 Watch videos/ DVDs 8 9 10 6 Play console/ computer 12 15 17 games 12 17 Listen to a portable music 8 13 device/ MP3 player 11 18 13 Listen to music on a hi-fi/ 10 CD or tape player Read newspapers/ magazines Listen to the radio 52 50 44 44 46 Use the internet via computer/ laptop Use a mobile phone

Watch television 2005 2007 2009 2010 2011

Source: Ofcom media literacy research, fieldwork carried out by Saville Rossiter-Base A2 – Which one of these would you miss doing the most? Base: All adults aged 16+ (3244 in 2005, 2905 in 2007, 1824 in 2009, 2117 in 2010, 1823 in 2011).

8 Figure 1.10 Take-up of bundled services over time Proportion of households 60% 57% 53% Other 50% 6% 50% 8% 2% 46% 1% Mobile and broadband 9% 2% 2% 40% 1% 39% 6% 1% 2% 40% 1% 2% Fixed voice, broadband, mobile and 5% 5% 2% 19% multi-channel TV 1% 1% 29% 29% 3% 3% 16% Fixed voice, dial-up and multichannel 30% 1% 17% TV 3% 5% 16% 4% 1% 1% Fixed voice and multichannel TV 4% 7% 12% 20% 4% 5% Fixed voice and dial-up 7% 5% 27% 22% 24% 10% 3% 19% 20% Fixed voice, broadband and 17% multichannel TV 12% 9% Fixed voice and broadband 0% Q1 2005 Q1 2006 Q1 2007 Q1 2008 Q1 2009 Q1 2010 Q1 2011 Q1 2012

Source: Ofcom technology tracker Base: All adults aged 16+ (2012 n=3772) QG1. Do you receive more than one of these services as part of an overall deal or package from the same supplier?

0 Figure 1.11 Overall satisfaction with communication services

Proportion of users of service (per cent)

94 94 95 100 91 91 89 89 93 90 88 87 86 87 83 83 83 80 Satisfied 34 34 32 34 32 33 32 37 37 40 41 60 44 40 44 46 44 40 62 61 61 Very 57 57 57 56 58 50 50 20 46 43 42 39 42 40 satisfied 0 2011 Q1 2011 Q1 2011 Q1 2011 Q1 2011 2009 Q1 2010 Q1 2012 Q1 2009 Q1 2010 Q1 2012 Q1 2009 Q1 2010 Q1 2012 Q1 2009 Q1 2010 Q1 2012 Q1

Fixed Mobile Fixed Mobile telephony telephony broadband Broadband

Source: Ofcom research Note: Shows the proportion of users with each service, includes only those who expressed an opinion.

10 Figure 1.12 Average household spend on communications services

150 4.8% 4.8% 4.7% 4.7% 4.6% 5% 4.6% Radio

£110.50 4% Television £108.15 £104.43 £102.89 2.84 2.86 £100.15 £97.62 100 2.70 2.67 2.68 29.20 2.64 Fixed internet 29.30 28.69 3% 29.40 29.41 29.94 11.92 Mobile 11.06 10.68 11.02 10.53 10.78 2% services 50 37.94 37.81 36.51 Fixed voice 35.05 33.49 32.21 1% % of total 28.61 27.13 25.84 24.73 24.04 22.06 spend 0 0% 2006 2007 2008 2009 2010 2011

Source: Ofcom / operators/ONS.Notes: Radio data before 2004 were compiled using a different methodology and are not directly comparable to subsequent figures. TV includes pay-per-view from 2004 onwards. Figures expressed in 2011 prices.

11 The rise of text based communications Figure 1.13 Preferred method of communication with friends and family

% of adults who communicate with friends and family

Meet face to face 67 Voice calls on mobile phone 10 Voice calls via fixed landline phone 10 Text messaging 5 Email 2 Instant messaging 1 Social networking 1 Post 1

0 20 40 60 80

Q5a: If you had to pick one method of communicating with friends and family which one would it be? Source: Ofcom research, 2012 Base: all who ever use at least one form of communication to communicate with: Friends and family, n= 2007. Note - other mentions by 1% or fewer included: Emails, social networking, VoiP calls

1 Figure 1.14 Preferred methods of communication with friends and family by different age groups % of adults who communicate with friends and family 67 Meet face to face 59 70 10 Voice calls on mobile phone 15 3 10 Voice calls via fixed landline phone 1 20 5 Text messaging 11 1 2 Emails 2 1 0 Social networking e.g. Facebook 3 1 0 Instant messaging 3 1 0 VoIP (e.g. Skype) 2 All 1 1 16-24 Post 1 1 65+

0 20 40 60 80 Q5a: If you had to pick one method of communicating with friends and family which one would it be? Source: Ofcom research, 2012 Base: all who ever use at least one form of communication to communicate with: Friends and family, n= 2007. 2 Figure 1.15 Methods used at least once a day to communicate with friends and family % of adults

Text messages 58 Face to face 49 Voice call on mobile phone 47

Social networking 32 Any text Emails 30 based services Voice calls on fixed landline 29 68%

Instant messaging 26 Any voice based Comments on websites 12 services VoIP (e.g. Skype) 9 63% Micro blogging (e.g. Twitter) 8 Post (letters/cards/packages) 1

0 10 20 30 40 50 60 Source: Ofcom research, 2012 Q2a: How often do you use x to communicate with friends and family? Base: UK adults aged 16+ who communicate, n = 1980 Any text based services: text messages, social networking, emails, instant messaging, comments on websites, micro-blogging, post Any voice-based services: voice calls on mobile, voice calls on fixed landline, VoIP

3 Figure 1.16 Methods of communication used at least once a day to communicate with friends and family, by age of respondent % of adults 58 Text messages 90 15 49 Face to face 63 37 47 67 Voice call on mobile phone 17 Any text based 32 services Social networking e.g. Facebook 73 4 16-24 96% 30 Emails 43 65+ 21% 10 29 Voice calls on fixed landline 15 Any voice 42 based services 26 62 Instant messaging 2 16-24 74% 12 65+ 49% Comments on websites 27 2 9 VoIP (e.g. Skype) 19 2 All respondents 8 27 Micro blogging (e.g. Twitter) 1 16-24 1 Post (letters/cards/packages) 2 2 65+

Source: Ofcom research, 2012 0 20 40 60 80 100 Q2a: How often do you use x to communicate with friends and family? Base: UK adults aged 16+ who communicate, n = 1980 Any text based services: text messages, social networking, emails, instant messaging, comments on websites, micro-blogging, post Any voice-based services: voice calls on mobile, voice calls on fixed landline, VoIP 4 Figure 1.17 Methods use at least once a week to communicate with friends and family

% of adults Face to face 86 Text messages 70 Voice call on mobile phone 67 Voice calls on fixed landline 55 Any text Emails 47 based services Social networking 41 80% Instant messaging 34 Any voice Comments on websites 18 based services VoIP (e.g Skype) 17 88% Micro blogging 11 Post (letters/cards/packages) 10

Source: Ofcom research, 2012 0 10 20 30 40 50 60 70 80 90 Q2a: How often do you use x to communicate with friends and family? Base: UK adults aged 16+ who communicate, n = 1980 Any text based services: text messages, social networking, emails, instant messaging, comments on websites, micro-blogging, post Any voice-based services: voice calls on mobile, voice calls on fixed landline, VoIP 5 Figure 1.18 Methods of communication used at least once a week to communicate with friends and family, by age of respondent

70 Text messages 94 24 86 Face to face 91 82 67 Voice call on mobile phone 82 32 41 Social networking e.g. Facebook 83 7 Any text based 47 Emails 43 services 21 16-24 97% 55 Voice calls on fixed landline 27 74 65+ 42% 34 Instant messaging 73 Any voice 4 based services 18 Comments on websites 37 3 16-24 88% 17 65+ 82% VoIP (e.g. Skype) 37 7 11 Micro blogging (e.g. Twitter) 33 All respondents 1 10 16-24 Post (letters/cards/packages) 6 17 65+ Source: Ofcom research, 2012 0 10 20 30 40 50 60 70 80 90 100 Q2a: How often do you use x to communicate with friends and family? Base: UK adults aged 16+ who communicate, n = 1980 Any text based services: text messages, social networking, emails, instant messaging, comments on websites, micro-blogging, post Any voice-based services: voice calls on mobile, voice calls on fixed landline, VoIP 6 Figure 1.19 Communication methods ever used to send greetings (e.g. birthdays)

Post ( letters/cards/packages) 58

Meet face to face 55

Text messaging 36

Voice calls on mobile phone 33 Any text Voice calls via fixed landline phone 30 based services Any social networking 21 81%

Any email 20 Any voice based Any instant messaging 11 services Any comments on website forums 2 47%

0 20 40 60 80 100

Source: Ofcom research, 2012 Q3a: Thinking about personal communications which of these methods do you ever use to – greetings such as birthday/get well Base: UK adults aged 16+, n = 2012 Any text based services: text messages, social networking, emails, instant messaging, comments on websites, micro-blogging, post Any voice-based services: voice calls on mobile, voice calls on fixed landline, VoIP

7 Figure 1.20 Communication methods ever used to send greetings (e.g. birthdays) by age of respondent 58 Post ( letters/cards/packages) 31 77 55 Meet face to face 59 46 36 Text messaging 53 7 Any text based 33 services Voice calls on mobile phone 38 12 16-24 81% 30 65+ 79% Voice calls via fixed landline phone 15 38 Any voice 21 Any social networking eg Facebook 41 based services 0 16-24 45% 20 Any email 16 65+ 41% 11 11 All Any instant messaging eg MSN 23 1 16-24 2 Any comments on website forums 4 65+ 0

Source: Ofcom research, 2012 0 20 40 60 80 100 Q3a: Thinking about personal communications which of these methods do you ever use to – greetings such as birthday/get well Base: UK adults aged 16+, n = 2012 Any text based services: text messages, social networking, emails, instant messaging, comments on websites, micro-blogging, post Any voice-based services: voice calls on mobile, voice calls on fixed landline, VoIP

8 Figure 1.21 Net claimed changes in communications methods used in last two years

Net percentage change in use of communications methods (claimed) 20% 17% 17% 14% 11% 10% 5% 4% Landline 1% 1% 0% calls Post 0% Email SMS Social Mobile- Instant VoIP Website Face to Micro- networks voice message comments face blogging -4% -10%

-20%

-30% -30%

Source: Ofcom research, 2012 Q6a/6b: Which of these methods of communication do you use to communicate More/ Less than you did 2 years ago?( Multiple choice) Note chart shows net percentage (% who claimed to use more - % who claimed to use less) Base: UK adults aged 16+, n=2009 Figure 1.22 Net claimed changes in communications methods used in last two years,16-24 year olds

Net percentage change in use of communications methods (claimed) 40% 31% 30% 23% 20% 12% 11% 10% 6% 3% 3% Landline 0% 0% calls Post 0% Social SMS Instant Mobile- Email Face to Website VoIP Micro- -10% networks message voice face comments blogging -12% -20%

-30% -25% Source: Ofcom research, 2012 Q6a/6b: Which of these methods of communication do you use to communicate More/ Less than you did 2 years ago?( Multiple choice) Note chart shows net percentage (% who claimed to use more - % who claimed to use less) Base: UK adults aged 16+, n=319 Figure 1.23 Net claimed changes in communications methods used in last two years, 65+ year olds

Net percentage change in use of communications methods (claimed) 20% 13%

10% 8% 8% 7% 4% Micro- 2% 1% 1% 0% blogging Post 0% SMS Social Landline Mobile- Email Face to Website VoIP Instant -1% calls voice face comments networks message -10%

-20% -19%

Source: Ofcom research, 2012 Q6a/6b: Which of these methods of communication do you use to communicate More/ Less than you did 2 years ago?( Multiple choice) Note chart shows net percentage (% who claimed to use more - % who claimed to use less) Base: UK adults aged 65+, n=420 Figure 1.24 Net predicted changes in communications methods that will be used in next two years

Net percentage predicted change in use of communications methods 20% 17%

10% 7% 7% 7% 7% 5% 4% Landline 1% 1% calls Post 0% SMS Social Face to Email Mobile- VoIP Instant Website Micro- -1% voice networks message face comments blogging -10%

-20% -22% -30%

Source: Ofcom research, 2012 Q7a/7b: In the next 2 years which of them do you think you will use MORE than you do now? Note chart shows net percentage (% who predict to use more - % who predict to use less) Base: UK adults aged 16+, n=2009 Figure 1.25 Methods used at least once a week to communicate with businesses and services

% of adults Meet face to face 28

Any email 24 Any text based Voice calls on mobile phone 21 services Voice calls via fixed landline phone 20 35%

Post (letters/cards/packages) 13 Any voice based Text messaging on mobile phone 13 services Any Comments on websites 6 31% Any social networking eg Facebook 6 Any instant messaging eg MSN 5 Any internet based voice calls eg Skype 3 Any microblogging e.g. Twitter 3

0 20 40 Q2b How often do you ever use to communicate with business and services? Source: Ofcom research, 2012 Base: UK adults aged 16+, n = 2012

13 Figure 1.26 Methods used at least once a week to communicate with businesses and services, by age % of adults 28 17 Meet face to face 19 24 21 Any email 6 21 18 Voice calls on mobile phone 5 Any text based 20 services 8 Voice calls via fixed landline phone 15 16-24 33% 13 6 65+ 15% Post (letters/cards/packages) 11 13 Any voice Text messaging on mobile phone 11 5 based services 6 8 16-24 22% Any Comments on websites 1 6 65+ 17% Any social networking eg Facebook 12 1 All 5 Any instant messaging e.g. MSN 7 0 16-24 3 Any internet based voice calls eg Skype 4 1 65+ 3 6 Any microblogging e.g. Twitter 0

Q2b Which of the following methods do you ever use to communicate0 with for business purposes?20 40 Source: Ofcom research, 2012 Base: UK adults aged 16+, n = 2012 Any text based services: text messages, social networking, emails, instant messaging, comments on websites, micro-blogging, post Any voice-based services: voice calls on mobile, voice calls on fixed landline, VoIP

14 Figure 1.27 Preferred method of communicating with businesses and services

Top 5 methods % of adults 40 37 Contact bank/ financial 33 institutions 30 30 28 Contact other organisations 23 23 21 for official matters e.g. 19 council, tax office etc 20 18 1616 15 14 15 Contact services and utility 1312 12 companies 10 10 8 7 6 4 3 Follow up of goods/services 2 1 already purchased 0 Meeting face Voice calls on Any email Voice calls on Post Enquire about to face fixed landline mobile phone goods/services to purchase telephone

Q4b: Generally, which method do you prefer to use Source: Ofcom research, 2012 Base: UK adults aged 16+, who communicate with businesses, n = 701. Note: Other mentions by 3% or less included text messages, social networking, VoIP calls.

15 Figure 1.28 Agreement with attitudes towards communication methods I prefer to communicate with a real person rather than an automated service 88 I prefer to speak in person to family and friends rather than over other communication methods 83 I communicate with my family a lot 78

I communicate with my friends a lot 71

Technology has changed the way I communicate 64

New communication methods have made my life easier 57

I often use the cheapest form of communication possible 54 I don't send as many letters and cards by post as I used to because I prefer digital methods 48 I think Ecards are impersonal 40 I am happy to post messages online that a wide audience can see 21

0% 20% 40% 60% 80% 100% Q8: I am going to read out some statements and I would like you to tell me how much each one applies to you using a scale of 1-5 Source: Ofcom research , 2012 Base UK adults aged 16+ n = 2012

16 Figure 1.29 Preference for face-to-face communication with friends and family

‘ I prefer to speak in person to friends and family rather than via other communication methods’ By age, social grade and gender

100% 5 2 6 9 7 5 8 8 5 7 5 6 10 11 14 9 5 11 9 12 10 Don't know 80% 16

60% Not apply 86 89 85 40% 83 75 81 80 83 82 82 83 Neither/nor 20%

0% Apply UK 16-24 25-34 35-44 45-54 55-64 65+ ABC1 C2DE Male Female Adults

Source: Ofcom research , 2012 Q8: I am going to read out some statements and I would like you to tell me how much each one applies to you using a scale of 1-5. Chart shows the proportion that indicated that the statement applies to them, by rating 4 or 5. Base: UK adults aged 16+ n = 2012

17 Figure 1.30 Views on whether new communications methods have

made life easier By age, social grade and gender

‘ New communications methods have made my life easier’

100% 10 8 13 16 22 22 26 20 25 80% 17 18 28 Don't know 23 17 17 50 17 19 20 60% 22 21 Not apply

40% 73 17 72 65 Neither/nor 57 62 60 61 50 49 53 20% 30 Apply 0% UK 16-24 25-34 35-44 45-54 55-64 65+ ABC1 C2DE Male Female Adults

Source: Ofcom research , 2012 Q8: I am going to read out some statements and I would like you to tell me how much each one applies to you using a scale of 1-5 Chart shows the proportion that indicated that the statement applies to them, by rating 4 or 5. Base: UK adults aged16+ n = 2012

18 The Generation Gap

CHARTS USED IN CMR

Charlotte Mountjoy Figure 1.31 UK population predictions by age group 2010-2020

Population projection (millions) 13 12.67 65+ 12 12.23 Children 11 25-34s 10 9.45 45-54s 9 8.73 8.37 35-44s 8 8.20 7 7.54 55-64s 6 15-24s 5 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

Source: ONS 2010-based National Population Projections Published 26 October 2011

1 Figure 1.32 Take-up of internet, digital video recorders, and mobile phones by age

Internet DVR Mobile

2005 2012 2005 2012 2005 2012

All Adults 54% 80% 11% 47% 80% 92%

16-24 60% 90% 19% 45% 92% 98%

25-34 62% 90% 10% 51% 91% 98%

35-44 71% 91% 16% 55% 91% 97%

45-54 70% 85% 15% 52% 84% 97%

55-64 59% 75% 7% 47% 75% 91%

65+ 24% 46% 4% 31% 47% 68%

Source: Internet and Mobile phone, Ofcom’s Technology Tracker Q1 2012, 2005. DVR, Ofcom’s Media Literacy Tracker Q1 2005 & Ofcom’s Technology Tracker Q1 2012

2 Figure 1.33 Methods of communication used at least once a day to communicate with friends and family 58 90 Text messages 15 49 63 Face to face 37 47 67 Voice call on mobile phone 17 32 73 Social networking e.g. Facebook 4 30 43 Emails 10 29 15 Voice calls on fixed landline 42 26 62 Instant messaging 2 12 27 Comments on websites 2 All 9 19 respondents VoIP 2 16-24 8 27 Micro blogging (e.g. Twitter) 1 1 65+ 2 Post (letters/cards/packages) 2 0 10 20 30 40 50 60 70 80 90 100 Source: Ofcom ‘s research, 2012 Q2a: How often do you use x to communicate with friends and family? Base: UK adults who use communication methods aged 16+, n = 1980 Any text-based services: text messages, social networking, emails, instant messaging, comments on websites, micro blogging, post Any voice-based services: voice calls on mobile, voice calls on fixed landline, VoIP 3 Figure 1.34 Television consumption (hours per day) over time by age group

Average Hours viewed per day among adults 7

6 5.8 65+ 5.3 55-64 5 4.5 45-54 4.3 Adults 4 3.9 35-44 3.3 3 25-34 2.8 16-24 2 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

Source: BARB, all homes, average hours of daily viewing among adults. New BARB panel introduced 1st Jan 2010. As a result pre and post panel change data must be viewed with caution

4 Figure 1.35 Number of channels representing 75% of viewing age, 2002 versus 2011

40

30

20 2002 33 29 31 29 2011 24 23 10 16 10 8 Number of of Number channels 7 7 6 5 5 4 3 0 Individuals Children 16-24 25-34 35-44 45-54 55-64 65+

Source: BARB, All Individuals, Network. Individuals= 4+, Children= 4-15 years. Based on the number of channels representing 75% of each demographics viewing (channels ranked by channel share). New BARB panel introduced 1st Jan 2010. As a result pre and post panel change data must be viewed with caution 5 Overview of share

Figure 1.36 Share of viewing for main PSB channels and their portfolio channels 100% C5 digital channels C4 digital 2% 80% 3% channels 2% 2% 2% 4% 7% ITV digital 5% 6% 4% 2% 2% 8% channels 7% 2% 6% 5% 8% BBC digital 60% 11% 8% 4% 6% 5% 7% 4% 6% 5% channels 5% 7% 5% 6% 6% C5 7% 8% 7% 19% 7% 5% 40% 5% 7% 17% 5% C4 16% 9% 17% 9% 10% 14% 8% 7% 12% 6% ITV1 20% 12% 5% 4% 28% 3% 24% BBC Two 21% 17% 21% 12% 15% 0% BBC One Adults 16-24 25-34 35-44 45-54 55-64 65+ Source: BARB Q1 2012 – all adults 16+

6 Figure 1.37 Proportion of adults with home internet who watch online catch-up TV

Proportion of households (%) 50% 48% Q1 2009 Q1 2010 Q1 2011 Q1 2012 41% 40% 39% 40% 37% 37%38% 38%38% 35% 36% 35% 35% 33% 34% 31% 31% 32% 32% 29% 29% 30% 26% 23% 24% 24% 24% 24% 21% 20% 18% 18% 14% 10% 10%

0% Total 16-24 25-34 35-54 55-64 65+ Male Female Source: Ofcom’s research Q1 2012 QE5A. Which, if any, of these do you or your household use the internet for whilst at home? Base: All adults who have the internet at home (n=2823 UK, 423 16-24, 524 25-34, 1113 35-54, 431 55-64, 330 65+, 1367 Male, 1456 Female)

7 Figure 1.38 Average hours listened per week by age from 2001 to 2011 Average Hours listened per week 28 65+

26 25.8 25.7 55-64 24 24.2 45-54 22.5 22 22.2 All Adults 20 19.3 35-44 18 17 25-34 16 15-24 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

Source: RAJAR, weekly listening to all stations at a network level, and on the 12 months of each respective year ending Q4

8 Figure: 1.39

Radio’s share of audio 2009-2010, by all adults and 15-18s

Share of audio listening 100 17% 18% 80 38% 44% Other audio 60 listening

40 83% 82% Radio 62% 56% 20

0 2009 2010 2009 2010

All adults 15-18s

Source: BBC (A&M Audiences)/Brand Driver, Share of Ear research 2009, 2010

9 Figure 1.40 Percentage of people listening to four or more stations by age 2002 versus 2011

Q1 2002 Q1 2011 % change Adults 24.0% 28.0% +16.7% 15-24 34.0% 36.0% +5.9% 25-34 24.0% 31.5% +31.3% 35-44 24.5% 30.0% +22.4% 45-54 23.3% 30.0% +28.8% 55-64 20.5% 25.6% +25% 65+ 15.0% 17.5% +16.7%

Source: RAJAR, 3 month data number of stations listened to Q1 2002 and Q1 2011

10 Figure 1.41 Household penetration of fixed and mobile telephony, by age

Proportion of respondents (per cent)

100% 8 4 6 5 10 15 11 24 18 33 26 None 80% 45 61 60% 79 Mobile only 83 84 80 88 79 88 87 40% 74 81 65 73 54 Fixed and 20% 37 mobile 19 10 4 12 4 11 0% 5 Fixed only All All 15-24 16-24 25-34 25-34 35-54 35-54 55-64 55-64 65-74 65-74 75+ 75+ 2006 2012 2006 2012 2006 2012 2006 2012 2006 2012 2006 2012 2006 2012

Source: Ofcom ‘s Technology Tracker Q1 2012, Ofcom’s Residential Tracker Q1 2006

11 Figure 1.42 Smartphone take-up by age

Proportion of UK Smartphone Non-smartphone Total mobile adults (%) 98 98 97 100% 92 91 32 80% 38 68 53 54 60% 72 40% 65 66 60 20% 39 43 19 0% 3 UK 16-24 25-34 35-54 55-64 65+

Source: Ofcom’s Tecnology tracker, Jan/Feb 2012 QD2. Do you personally use a mobile phones? /QD4 Do you personally use a smartphone? Base: Total UK Adults aged 16+ (n = 3772 unweighted total)

12 Figure 1.43 Media activity missed the most in 2011 by age

% All Adults 80 Vs 2006 66 +2+8 60 +9 -1 +12+11 -1 +9 +6 52 46 46 48 40 40 40 22 25 18 21 20 20 18 18 20 17 17 16 14 13 10 8 6 7 5 2 4 1 0 all adults 16-24 25-34 35-44 45-54 55-64 65+

TV Mobile Internet Radio

Source: Ofcom Media Literacy 2011 and 2006 , Q Which of these activities would you miss most? (prompted responses)

13 Figure 1.44 Household internet access by age, 2005 vs 2012

Home internet access (%) 2005 2012 100 90 90 91 85 80 75 80 71 70 60 62 59 60 54 46 40 24 20

0 Total 16-24 25-34 35-44 45-54 55-64 65+

Source: Ofcom’s technology tracker, Q1 2012, Ofcom’s Residential Tracker Q1 2005. Total internet access is based on fixed/mobile and mobile phones.

14 Figure 1.45 Breadth of internet use (number of activities undertaken) by age

Proportion of internet users (%) 100 All UK 16+ 16-24 25-34 35-44 45-54 55-64 65-74 75+ 86 80 63 60 42 40 33 34 34 35 30 29 31 26 25 24 21 20 4 1 0 0-5 activities 11-17 activities

Source: Ofcom’s Technology Tracker, Q1 2012

15 Figure 1.46 Household internet activities by age

Households (%) 58 60 56 51 48 44 44 43 40 39 36 38 40 33

21 22 22 22 18 20 20 19 20 17 11 11 8 7

0 Playing games Downloading music Listening to the radio Watching video Uploading/ adding online/interactively files, movies or video clips/webcasts content clips All 16-24 25-44 45-64 65+

Source: Ofcom research, Q1 2012 Base: All adults who have the internet at home (n= 2823). QE5A: Which, if any, of these do you or members of your household use the internet for while at home?

16 The fourth screen

March 2012 Figure 1.47 Take-up of tablet computers by age, SEG and gender

Proportion of UK households (%) 40

30

20

15% 16% 15% 10 14% 13% 11% 11% 2% 9% 7% 6% 0 Total 16-24 25-34 35-44 45-54 55-64 65+ ABC1 C2DE Male Female

Source: Ofcom Technology Tracker 2012 Base: 2012:3772

1 Figure 1.48 Claimed ownership of tablet brands

Apple iPad 3 Samsung 13 Archos 2 2 Blackberry 2 Acer 2 3 HP 3 57 Asus 4 Motorola 8 Sony Other Don't Know

Source: Ofcom research Q.B1 Firstly, what brand of tablet computer is it? Base: All respondents with a tablet computer: 500 2 Figure 1.49 Reasons for purchasing a tablet

80 % NET: Entertainment: 53%

60 %

53 52 48 40 % 43 36 36 29 20 % 23 21 20 20 17 14 0 % 5

Source: Ofcom research Q.B6 Why did you decide to buy a tablet computer? Base: All respondents with a tablet: 500

3 Figure 1.50 Where tablets are used

1% 1% 4% At home

7% While travelling

At work

While on holiday 87% Somewhere else

Source: Ofcom research Q.B9 Where do you primarily use your tablet computer? Base: All respondents with a tablet computer: 500 4 Figure 1.51 How often consumers use their tablet computer

50 %

40 %

30 % 41 % 34 % 20 %

12 % 10 % 8 % 5 %

0 % Every day Most days A couple of times a week Weekly Less than weekly

Source: Ofcom research Q.B7 How often do you tend to use your tablet computer? Base: All respondents with a tablet: 500

5 Figure 1.52 Frequency of activities using a tablet

Watch short video clips 4 5 18 17 11 28 16 Work 7 7 9 6 3 17 51 Listen to music 6 10 14 13 8 25 24 Play games 9 13 23 13 7 18 17 Access news on website 9 16 21 14 7 15 17 Social networking 16 15 15 10 5 13 26 Email 26 19 17 12 5 13 8 Internet browsing 31 21 22 11 4 8 2

0% 20% 40% 60% 80% 100% More than once a day Every day Most days A couple of times a week Weekly Less than weekly Never

Source: Ofcom research Q.B11 How often, if at all, do you use your tablet computer for each of the following? Base: All respondents with a tablet: 500 6 Figure 1.53 Impact on behaviour 100% 1 Not 5 9 13 Applicable 21 17 21 16 20 80% 16 6 14 18 16 Less than 56 37 before 60% 33 50 40% 56 69 Same 54 59 amount as 44 42 before 20% 37 23 More than 14 10 before 0% 7 6 6 5

Source: Ofcom research Q.B20 For each of the activities below can you tell us whether you are doing it more, less or the same amount since owning your tablet computer? Base: All respondents with a tablet: 500

7 Figure 1.54 Impact on reading behaviour 100% 8 9 13 10 15 11 Not 11 applicable 80% 25 14 14 25 24 Less than 60% before 63 60 40% 60 63 Same 60 60 amount as before 20% More than 17 before 8 13 9 0% 5 4 Any books Paper books Any Paper Any magazines Paper Newspapers newspapers magazines Source: Ofcom research QB13/14 Since owning your tablet computer have you read books, magazines or newspapers more or less than before?/ We'd now like you to think specifically about paper based content - so since owning your tablet computer have you read books, magazines or newspapers more or less than before? Base: All respondents with a tablet: 500 8 Figure 1.55 Multi-tasking while using a tablet

Watch TV 68 %

Listen to your music 35 % Figure beside bar Listen to the radio 25 % represent net percentage of multi- Use smartphone/mobile 25 % tasking Use your laptop 12 % NET: Any Multi-tasking 84% NET: Triple Tasking Use your desktop PC 10 % 49%

Other 2 %

Nothing 16 %

0 % 20 % 40 % 60 % 80 %

Source: Ofcom research Q.B12 Some people multi-task while using their tablet computer. Which, if any, of the following things do you tend to do at the same time as using your tablet computer? Base: All respondents with an tablet computer: 500

9 Figure 1.56 Types of apps downloaded onto a tablet

Games/just for fun 75 % Weather 60 % Social networking 58 % News 57 % Maps/navigation 51 % Music 50 % Books 49 % Shopping 46 % Photo/video 40 % Travel 34 % Banking 32 % Sports 32 % Education 26 % Finance/ business 19 % Other 5 %

0 % 20 % 40 % 60 % 80 %

Source: Ofcom research Q.B18: Which of the following types of apps have you downloaded? Base: All respondents with apps on their tablet computer: 484

10 Figure 1.57 Sharing vs. personal device 100% I share it with other people I live 29 37 37 33 with 80% 43 41

It's my tablet 60% computer but I 35 26 26 sometimes let 29 other people use 26 26 40% it I'm the only person who uses it 20% 37 41 35 36 31 32

0% Total 18-34 35-44 45-54 54-64 65+

Source: Ofcom research Q.B5 Which of these statements best describes who uses your tablet computer? Base: All respondents with a tablet: 500

11 Figure 1.58 Tablet use among children

100 %

80 %

60 %

40 % 83 %

20 % 41 % 35 % 32 % 30 % 29 % 28 % 25 % 22 % 13 % 12 % 0 % Playing games Internet Listening to Watching Looking at Social School/college Watching TV Email Reading Instant browsing music short video photos networking work progs/movies ebooks/mags messaging clips

Source: Ofcom research Q.B22 What do your children use your tablet computer for? Base: All respondents with children aged under 16 who use their tablet computer: 170

12 Figure 1.59 Personal attachment to tablets

100 % “I couldn’t live without my tablet computer” 80 %

60 %

40 %

20 % 34 % 30 % 35 % 24 % 22 % 11 % 13 % 0 % NET Agree Strongly Agree Agree Neither Agree nor Disagree Strongly Disagree NET Disagree Disagree

Source: Ofcom research Q.B23 To what extent do you agree or disagree with the following statements? Base: All respondents with a tablet: 500

13 Figure 1.60 Consumer tablet satisfaction

Very satisfied 54 %

Fairly satisfied 33 % NET Satisfied: 87%

Neither satisfied or dissatisfied 5 %

Fairly dissatisfied 5 %

Very dissatisfied 3 %

0 % 20 % 40 % 60 %

Source: Ofcom research Q.B3 Taking all things into account, how satisfied or dissatisfied are you with your tablet computer? Base: All respondents with a tablet: 500

14 Figure 1.61 Take-up of e-readers

Proportion of UK adults (%) 20 Q1 2010 Q1 2011 Q1 2012 15 % 15 % 15 14 % 13 % 11 % 10 % 10 % 10 % 10 9 %

6 % 6 % 5 3 % 1 % 0 Total 16-24 25-34 35-44 45-54 55-64 65+ ABC1 C2DE Male Female

Source: Ofcom Technology Tracker 2010,2011, 2012 Base: 2010:9013, 2011: 3474, 2012:3772

15 Figure 1.62 Consumer e-reader satisfaction

Very satisfied 66

Fairly satisfied 25 NET Satisfied: 91%

Neither satisfied or 3 dissatisfied

Fairly dissatisfied 3

Very dissatisfied 3

0 % 20 % 40 % 60 % 80 %

Source: Ofcom research Q.C2 Taking all things into account, how satisfied or dissatisfied are you with your e-reader? Base: All respondents with an e-reader: 500

16 Figure 1.63 Claimed ownership of e-reader brands

1 Amazon 3 8 Kindle

Sony

NET: Kobo

86 Other

Source: Ofcom research Q.C1 What brand of e-reader is it? Base: All respondents with an e-reader: 500 17 Figure 1.64 Reasons why consumers decided to buy an e-reader

100 %

80 %

60 %

40 % 68 % 53 % 50 % 45 % 45 % 20 % 34 % 26 % 13 % 13 % 0 % 4 % NET Easy to carry Easily carry Lightweight Gift Books take It's cheaper Like to keep Thought it Other Portability around lots of books up too much to purchase up with the would make on holiday space at e-books latest me read home technology more

Source: Ofcom research Q.C4 Why did you decide to buy an e-reader? Base: All respondents with an e-reader: 500

18 Figure 1.65 Where do people primarily use their e-reader?

3 % 1 % At home

14 % While travelling

While on 15 % holiday

67 % At work

Somewhere else

Source: Ofcom research Q.C8 Where do you primarily use your e-reader? Base: All respondents with an e-reader: 500 19 Figure 1.66 Positive impact on reading books 100% 8 % N/A 36 80% 35

54 % Less than 60% 5 % 5 % before

40% Same 55 % amount as 56 % before

20% 38 % More than before 0% 5 % 4 % Books Magazines Newspapers Source: Ofcom research Q.C6 Since owning your e-reader have you read books, magazines or newspapers more or less than before? Base: All respondents with an e-reader: 500

20 Figure 1.67 Impact on reading paper material 100% 20 21 N/A 80% 10 % 8 % 60 % Less than 60% before

40% Same 68 % 69 % amount as before 20% 33 % More than before 6 % 2 % 2 % 0% Paper Books Paper Magazines Paper Newspapers Source: Ofcom research Q.C7 We’d now like you to think specifically about paper based content, so since owning your e-reader have you read books, magazines or newspapers more or less than before? Base: All respondents with an e-reader: 500

21 Figure 1.68 Replacing paperback books with e-book equivalents

“ I doubt I will buy many paper books any more” 100% Strongly 13 % agree

80% Agree 31 %

60% Neither agree or disagree 18 % 40% Disagree 23 % 20% Strongly 14 % disagree 0%

Source: Ofcom research Q.C10 To what extent do you agree or disagree with the following statements? Base: All respondents with an e-reader: 500

22 The London 2012 Games: media consumption

June 2012 Figure 1.69 Television reach of the Olympics: 2004 and 2008

% of total UK population

2004 45.7 million 83%

41.1 million 2008 73%

0 10 20 30 40 50 60

Source: BARB 2004 and 2008. 15+ minutes consecutive reach, all individuals 4+

1 Figure 1.70 Average time spent watching the Olympics: total minutes

Average total minutes

2004 826

2008 536

0 200 400 600 800 1000

Source: BARB data 2004: 13/08/2004 to 29/08/2004 and 2008: 08/08/2008 to 24/08/2008

2 Figure 1.71 Total viewing in Olympics and preceding year (total minutes)

Total minutes viewed Total : 3486 3686 3418 3896

4500 Non-Olympics 4000 viewing 3500 3000 Olympics viewing 2500 2860 3362 2000 3486 3418 1500 1000 500 826 536 0 2003 2004 2007 2008

Source: BARB data 2003: 13/08/2003 to 29/08/2003.2004: 13/08/2004 to 29/08/2004 2007 08/08/2007 to 24/08/2007 and 2008: 08/08/2008 to 24/08/2008

3 Figure 1.72 Top five most viewed half-hour slots: by viewer numbers, 2004 and 2008

Millions 2004 2008 12 10 8 6 11.7 9.8 9.4 8.5 8.2 4 6.9 5.5 5.4 5.3 2 4.2 0 Men's Women Opening Men's 100m Women Closing Men's 100m Opening Cycling Athetics 4x100 Relay 1500m Final Ceremony Final 22.08 800m Final Ceremony Final 16.08 Ceremony 17.08 Finals 28.08 2000- 28.08 1830- 13.08 2100-2130 23.08 24.08 1530-1600 08.08 1000-1030 23.08 2030 1900 2000-2030 1900-1930 1400-1430 1330-1400 1330-1400

Source: BARB data 2004 and 2008. Average audiences in ‘000s.

4 Source: Ofcom Technology tracker Q1 2008/ 2012. *Did not ask about these devices in 2008.

Figure 1.73 Take-up of communications devices and services

2008 2012 % UK adults % UK adults

Broadband at home (excl. mobile) 58 76 PC/laptop/netbook*/tablet* 69 79 Smartphone* - 39 Connected TV* - 5 DVR 20 47 HD or HD ready* - 70 3D ready* - 6 Tablets* - 11

Source: Ofcom Technology Tracker Q1 2008/ 2012. *Did not ask about these devices in 2008

5 Figure 1.74 Levels of interest in the Games Proportion of UK adults (%) 100% 17 Not at all 24 22 23 23 24 21 interested 30 24 27 80% 32 15 17 Not very 17 18 16 17 20 11 19 7 17 interested 60% 17 11 11 12 8 7 11 14 10 10 Neither 9 interested or 42 40% uninterested 34 37 36 41 35 34 33 37 Quite 31 34 20% interested 16 20 Extremely 13 9 13 12 13 13 10 14 11 0% interested total 16-24 25-34 35-44 45-54 55-64 65+ AB DE Male Female

Source: Ofcom Research Q4.Thinking about the London 2012 Olympic and/or Paralympic Games happening this July and August, please tell me how interested you are, using the following scale? Base: All adults in UK: 2192

6 Figure 1.75 Type of media intentions

80%

60%

40% 77 74

20%

19 16 12 12 6 8 0% Any media Any online TV Newspapers and MagazinesRadio Online throughOnline a computer through a tablet computerMobile phone

Source: Ofcom Research Q8 In which of the following ways do you think you are likely to personally follow coverage of the London 2012 Olympic and Paralympic Games Base: Questions asked of 1803 adults/Olympic non-rejectors and answers rebased on UK adult sample of 2192

7 Figure 1.76 Interest in following coverage of Olympic events by gender

50% 43 Total Men Women 40 41 40% 37 33 31 32 30% 27 27 27 27 27 24 25 22 21 22 22 21 22 21 19 20% 16 13 10%

0% Athletics Opening ceremonySwimming Football Men's 100m FinalClosing ceremonyGymnasticsWomen's 100m Final

Source: Ofcom Research Q.6A1 Which, if any, of these Olympic events are you interested in following coverage of? Base: Questions asked of 1803 adults/Olympic non-rejectors and answers rebased on UK adult sample of 2192

8 Figure 1.77 Type of media intentions, by gender

80 %

Total Male Female 60 %

82 40 % 77 77 73 74 71

20 % 25 4 19 16 18 16 6 12 14 12 12 11 12 11 7 9 8 6 0 % Any media Any online TV Newspapers and Radio Online through a Online through a Mobile phone Magazines computer tablet computer

Source: Ofcom Research Q8 In which of the following ways do you think you are likely to personally follow coverage of the London 2012 Olympic and Paralympic Games Base: Questions asked of 1803 adults/Olympic non-rejectors and answers rebased on UK adult sample of 2192

9 Figure 1.78 Type of media intentions, by age

80 %

Total 16-24 65+ 60 %

40 % 79 79 79 77 74 73

20 % 32 19 16 20 19 19 4 12 8 10 12 12 2 11 2 8 0 0 % 6 Any media Any online TV Radio Newspapers and MagazinesOnline throughOnline a computer through a tablet computerMobile phone

Source: Ofcom Research Q8 In which of the following ways do you think you are likely to personally follow coverage of the London 2012 Olympic and Paralympic Games Base: Questions asked of 1803 adults/Olympic non-rejectors and answers rebased on UK adult sample of 2192

10 Figure 1.79 Frequency of following coverage of the Games (via television, radio or online)

Frequency of following 11 21 20 8 10 5 coverage 7

% adults that will follow the Games on any type of 77 media

0 % 20 % 40 % 60 % 80 % 100 %

Follow at all Lots of times a day A couple of times a day Every day Most days Once a week Less often Don't know

Source: Ofcom Research Q7 Approximately how often do you think you will access coverage of the Olympic or Paralympic Games, either through watching television coverage, listening to radio coverage or accessing coverage online? Base: Questions asked of 1803 adults/Olympic non-rejectors and answers rebased on UK adult sample of 2192 11 Figure 1.80 Attitudes towards the Games

I am likely to watch as much of the Olympic and/or 35 Paralympic Games as possible

I will probably only watch the finals of the biggest 30 % Agree events

I will probably only watch the opening and/or closing 18 ceremonies

0 % 20 % 40 %

Source: Ofcom Research Q18 I am now going to read out some statements about the coverage of the London 2012 Olympic and Paralympic Games and I would like you to tell me how much you agree or disagree with each. Base: Question asked of 1803 adults/Olympic non-rejectors and answers rebased on UK adult sample of 2192

12 Figure 1.81 How people expect to watch coverage on their television set

80%

60%

40% 67

20% 26 22 9 6 0% Live TV TV news bulletins Highlights coverage on Recorded TV e.g. sky + Catch-up services TV or DVR e.g.BBC iPlayer

Source: Ofcom Research Q8 In which of the following ways do you think you are likely to personally follow coverage of the London 2012 Olympic and Paralympic Games... Base: Questions asked of 1803 adults/Olympic non-rejectors and answers rebased on UK adult sample of 2192

13 Figure 1.82 New technology is going to make accessing coverage easier

100 % % agree that new technology is going to make accessing coverage of the Olympic and/or Paralympic Games easier 80 %

60 %

40 % 64 60 53 47 20 % 37

0 % Total 16-24 65+ Male Female

Source: Ofcom research Q18 I am now going to read out some statements about the coverage of the London 2012 Olympic and Paralympic Games and I would like you to tell me how much you agree or disagree with each. New technology is going to make accessing coverage of the Olympic and\or Paralympic Games easier Base: Question asked of 1803 adults/Olympic non-rejectors and answers rebased on UK adult sample of 2192

14 Figure 1.83 Intention to follow coverage on many different devices

35 % % likely to follow coverage on many different devices 30 %

25 %

20 %

15 % 30 24 24 10 % 19 14 5 % 12 7 0 % Total 16-24 65+ AB DE Male Female

Source: Ofcom research Q18 I am now going to read out some statements about the coverage of the London 2012 Olympic and Paralympic Games and I would like you to tell me how much you agree or disagree with each. I am likely to follow the Olympic Games and\or Paralympic Games on many different devices Base: Question asked of 1803 adults/Olympic non-rejectors and answers rebased on UK adult sample of 2192

15 Figure 1.84 Attitudes to social networking and the Games

60 % % agree that social networking sites are going to make accessing coverage of the Olympic and/or Paralympic Games easier

40 %

48 20 % 28 26 24

8 0 % Total 16-24 65+ Male Female Source: Ofcom Research Q18 I am now going to read out some statements about the coverage of the London 2012 Olympic and Paralympic Games and I would like you to tell me how much you agree or disagree with each. Social networking sites like Facebook and Twitter are going to make following the Olympic and\or Paralympic Games easier Base: Questions asked of 1803 adults/Olympic non-rejectors and answers rebased on UK adult sample of 2192

16 Figure 1.85 Anticipated social networking about the Games while watching/listening to coverage

30 % % likely to read or post Olympic/Paralympic related material on social networking sites 25 %

20 %

15 % 24 10 %

5 % 11 11 11 5 0 % Total 16-34 35+ Male Female Source: Ofcom research Q14 When watching or listening to coverage of the Olympic and or Paralympic Games, how likely are you to use social networking (e.g. Facebook or Twitter) sites to read or post related messages (e.g. about the Olympic event)? Base: Question asked of 331 adults/Olympic non-rejectors who ever use social networking sites (e.g. Facebook or Twitter) when watching television to read or post related messages (e.g. about the programme or news event). Answers re-based on UK adult sample of 2192

17 Figure 1.86 Looking up information online about the Games while watching/listening to coverage

30 % % likely to look up Olympic/Paralympic relevant information on the internet as they watch/listen 25 %

20 %

15 % 27 10 % 17 15 13 5 % 10

0 % Total 16-34 35+ Male Female

Source: Ofcom research Q16 When watching or listening to coverage of the Olympic and or Paralympic Games, how likely are you to use the internet to look up relevant information (e.g. About the Olympic event) Base: Question asked of 508 adults/Olympic non-rejectors who ever use the internet to look up relevant information (e.g. about the programme). Answers rebased on UK adult sample of 2192

18 Nations chapter slides (UK report) Figure 1.87

UK communications market: fast facts

Northern UK England Scotland Wales UK urban UK Rural Ireland

Digital TV take-up among TV 98 97 98 97 99 99 91- homes +2 +2 +4

68- Total broadband take-up 76 78 68- 69- 76 77 +7

Mobile broadband take-up 13 13 12 16 7- 13 10

92 Mobile phone take-up 92 93 85- 93 92 92 +5

39 40 31- 39 35 39 35 Use mobile to access internet +7 +6 +10 +14 +6 +5 +12

39 40 32- 39 34 39 37 Smartphone take-up +12 +11 +14 +14 +13 +12 +10

Fixed landline take-up 84 85 82 80 84 83 91+

Households taking bundled 57 58 51 57 56 47- 47- services +4 +4 +5 +3 +11

DAB ownership amongst 38 40 29- 29- 22 38 41 radio listeners Smart TV ownership among 5 5 4 3 4 5 4 TV homes

11 11 11 8 9 11 11 Tablet computer take-up +9 +9 +10 +6 +7 +9 +9

E-reader take-up (personal 10 10 8 13 8 11 15+ use) +7 +7 +6 +10 +5 +8 +12

Fixed telephony availability 100 100 100 100 100 100 100

Fixed broadband availability1 100.0 100.0 99.9 100.0 100.0 100.0 99.9

LLU availability2 92 93 84 88 79 99 64

Cable broadband availability3 44 47 35 23 29 51 18

FTTC broadband availability4 31 33 10 17 87 35 15

Superfast broadband 60 62 42 34 88 67 28 availability5

2G mobile availability6 100 100 99 99 99 - -

3G mobile availability7 99 100 97 98 88 - -

DTT availability8 97 98 99 98 66 - -

TV consumption (hours per 4.0 3.6 - 4.5 4.5 4.4 4.2 - - day)9 Radio consumption (hours per 3.2 3.2 3.1 3.3 3.2 - - day) Source: Ofcom / operators

2 Figure 1.88 Communications infrastructure availability across the UK nations Proportion of individuals/homes (%) 100 100 100 100 100 100 100 100 99.98 99.87 99 99 99 99 100.00 100.00 100.00 99 98 98 98 97 97 94 93 100 92 88 88 87 84 80 79 66 62 60 60 47 44 42 35 34 33 31

40 29 23 17

20 10 0 Fixed 2G mobile Digital 3G mobile Fixed LLU Cable FTTC Superfast telephony terrestrial broadband broadband broadband broadband television

UK England Scotland Wales N Ireland Sources: Ofcom 1. Proportion of premises that have outdoor 2G mobile coverage from at least one operator. 2. Proportion of premises that have outdoor 3G mobile coverage from at least one operator. 3. Ofcom estimate of the proportion of households connected to an ADSL-enabled BT local exchange. 4. Ofcom estimate of the proportion of households connected to an LLU-enabled BT local exchange. 5. Ofcom estimate of the proportion of households passed by Virgin Media’s cable broadband network; excludes homes where Virgin Media is not also able to provide fixed voice and pay-TV cable services. 6. Ofcom estimate of the proportion of households able to receive FTTC services 7. Ofcom estimate of the proportion of households able to receive superfast broadband services

3 Figure 1.89 Coverage of 2G and 3G mobile services

Proportion of premises with outdoor coverage (per cent) 100

80 2G 60 96 87 94 92 40 86 78 76 73 3G 52 20 49

0 UK England Scotland Wales N Ireland

Source: Ofcom based on mobile operator data, May 2012 Note: This data is based on calculating coverage in 200 metre square pixels that cover the UK; this improved methodology is different to that used in the 2011 Communications Market Report, and as such the two sets of figures are not comparable.

4 Figure above bar shows % Figure 1.90 point change from Q1 2011 Patterns communications service adoption across the nations, 2012 -1 +/-0 +2 +/-0 +/-0 +1 +1 -1 +5 +1 +2 +2 +7 -3 -6 +2 +1 +2 +/-0 +1 +1 +1 -2 +2 -6 98% 99% 99% 100 97% 92% 93% 92% 93% 91% 85% 85% 84% 82% 84% 80% 78% 80 76% 68% 68% 69%

60

38% 40% 40 29% 29% 22% 20 Proportion of individuals

0 Fixed Mobile Broadband DTV DAB* UK England Scotland Wales N Ireland

Source: Ofcom research, Quarter 1 2012 Fixed line base: All adults aged 16+ (n = 3772 UK, 2251 England, 500 Scotland, 513 Wales, 508 Northern Ireland) Fixed line question: Is there a landline phone in your home that can be used to make and receive calls? Mobile base: All adults aged 16+ (n = 3772 UK, 2251 England, 500 Scotland, 513 Wales, 508 Northern Ireland) Mobile question: Do you personally use a mobile phone? Broadband base: All adults aged 16+ (n = 3772 UK, 2251 England, 500 Scotland, 513 Wales, 508 Northern Ireland) Broadband question: Which of these methods does your household use to connect to the internet at home? DTV base: Adults aged 16+ with a TV in the household (n= 3713 UK, 2214 England, 489 Scotland, 508 Wales, 502 Northern Ireland) DTV question. Which, if any, of these types of television does your household use at the moment? DAB base: Adults aged 16+ who listen to radio. *NB Data in 2011 is based on all with any active radio sets in the household who listen to radio (n = 2963 UK, 1790 England, 364 Scotland, 405 Wales, 404 Northern Ireland) DAB question: How many of these radio sets are digital radios? Response represents those with one or more sets. Note: Remaining percentages are Don’t know responses 5 Figure 1.91 Adoption of communications technology/services in urban and rural locations UK England Scotland Wales Northern Ireland 100 979799 98999898 100 94 9193 9293 93 9293 92 93 8787 8988 88 84 84 83 81 83 7879 78 79 80 76 77 76 73 676769 69

60

40 Proportion of homes/individuals 20

0 Urban Rural Urban Rural Urban Rural Urban Rural

Fixed telephony Mobile telephony Broadband Digital television Source: Ofcom research, Quarter 1 2012 Fixed telephony, mobile telephony, broadband base: All adults aged 16+ (n = 3772 UK, 2251 England, 500 Scotland, 513 Wales, 508 Northern Ireland) DTV base: Adults aged 16+ with a TV in the household (n= 3713 UK, 2214 England, 489 Scotland, 508 Wales, 502 Northern Ireland)

6 Figure 1.92 Ownership of smartphones, tablets and smart TVs

Figure above bar shows % point change in take-up from Q1 2011

+12 +9 +11 +9 +14 +10 +14 +6 +13 +7 50% Smartphone Tablet PC Smart TV 40%

30%

20% 39 40 39 32 34 10% 11 11 11 3 9 5 5 4 8 4 0% UK 2012 England 2012 Scotland 2012 Wales 2012 N Ireland 2012

QE1. Does your household have a PC, laptop, netbook or tablet computer? Source: Ofcom research, Quarter 1 2012 Tablet and smart TV base: All adults aged 16+ (n = 3772 UK, 508 Northern Ireland, 2251 England, 500 Scotland, 513 Wales, 255 Northern Ireland urban, 253 Northern Ireland rural, 511 Northern Ireland 2011, 508 Northern Ireland 2012) Smartphone base: Adults aged 16+ who personally use a mobile phone (n = 3392 UK, 430 Scotland, 2043 England, 456 Wales, 463 Northern Ireland, 220 Scotland urban, 210 Scotland rural)

7 Figure 1.93

Take-up of bundles, by nation

Homes with bundles (%) and increase year-on-year (percentage points) 57% 58% 47% 47% 51% Number of 4pp 4pp -2pp 0pp 5pp services 100% 1% 1% 2 1% Other

33% 80% 36% 35% 36% 45% Quad

bundles by 60% of type (%) 40% Triple 60% 60% 61% 64% 53% Distribution 20% Dual

0% UK England Scotland Wales N Ireland

Source: Ofcom research, Q1 2012 Base: All adults aged 16+ with a package of services regardless of whether or not these include a discount (n = 2007 UK, 1276 England, 254 Scotland, 223 Wales, 254 Northern Ireland) Note: Remaining percentages are Don’t know responses

8 Figure 1.94

Regular use of postage stamps and postal services products by nation

100

80 69 61 58 59 60 53 53 51 51 49 45 47 41 40 42 40 31 31 31 31 27 24 20

0 UK England Scotland Wales N Ireland

Buy stamps for letters and cards Send parcels and packets by post Neither Send any mail

Source: Ofcom Attitudes toward spending research, 2012 Base: All adults aged 16+ (n = 2124 UK, 1726 England, 182 Scotland, 99 Wales,117 Northern Ireland) Q: Do you or anyone in your household regularly do any of the following...

9 Figure 1.95 Spend per head by PSBs: 2011

Spend per head £70.00 £60.36 £60.00

£50.00 Welsh/Irish/Gaelic first run originations spend on TV £39.01 £38.91 £30.88 £40.00 £37.66 £36.86 programming £1.76 £1.80 £3.86 £2.83 £2.43 £3.10 BBC Nations/Local radio £30.00 £4.27 £13.27 £7.33 £11.17 £20.00 £10.16 £13.63 £29.12 £31.73 £8.74 BBC/ITV1/STV/UTV first run £10.00 £16.94 originations spend on TV £10.21 £9.57 programming for the nations £0.00 BBC/ITV/C4/C5 qualifying first run UK England Northern Scotland Wales network TV spend made out of Ireland London Source: broadcasters, BBC and S4C Annual Report and Accounts and Ofcom calculations. Figures include the BBC spend on programmes for S4C and BBC ALBA. Made out of London figures are taken from the Network Compliance Report, 2011. For further details on made out of London, see http://stakeholders.ofcom.org.uk/broadcasting/guidance/programme-guidance/reg_prod/ on the Ofcom website

10 Figure 1.96 Hours of daily viewing of television and radio, by nation: 2011 Hours per person per day 4.0 3.2 3.6-4.5* 3.2 4.5 3.1 4.4 3.3 4.2 3.2 (see notes) Audience share (%) 100%

80% 41% 39% 46% 45% 45% 47% 47% 47% 55% 54%

60% 9% Other channels 40% 61% Main 5 PSBs 54% 55% 50% 55% 53% 53% 53% 20% 45% 46%

0% TV Radio TV Radio TV Radio TV Radio TV Radio UK England* Scotland Wales N Ireland (see Notes) Source: TV = BARB. Based on all individuals (aged 4+). PSBs = BBC One, BBC Two, ITV1, C4, Five. Radio = RAJAR. Based on all adults (aged 16+). PSBs = all BBC radio. National data based on TSA’s of BBC Radio stations of respective nations *Notes: It is not possible to provide a single figure for ‘England’ so instead a range is displayed reflecting the regions with the highest (North East) and lowest (West) figures respectively.

11 Figure 1.97 Consumers’ use of converging platforms

Statistically significant year-on-year changes (percentage points)

+3 +2 +7 +4 +2 +6 +4 +2 +10 -10 -5 +14 - +3 +6 50

40

30 44 46 following (%) 20 39 40 39 39 40 31 35 10 23 16 17 14 11 8 0 their householdtheir does the Data over over Data mobile over Data mobile over Data mobile over Data mobile over Data mobile Radio over over Radio internet over Radio internet over Radio internet over Radio internet over Radio internet TV/ video over internet over video TV/ internet over video TV/ internet over video TV/ internet over video TV/ internet over video TV/ Proportion of individuals Proportion who claim someone in that UK England Scotland Wales N Ireland

Source: Ofcom research, Quarter 1 2012 Base: All adults aged 16+ (n = 3772 UK, 2251 England, 500 Scotland, 513 Wales, 508 Northern Ireland) QE5A-B. Which, if any, of these do you or members of your household use the internet for whilst at home? QD28A-B. Which, if any, of the following activities, other than making and receiving calls, do you use your mobile for?/ Includes download free applications, download paid for applications,12 send/ receive emails, accessing the internet, connecting to the internet using Wi-Fi, using VoIP service, download a new video clip, video streaming, TV streaming, accessing/ receiving, sports/ team news/ scores, accessing/ receiving news, use IM/ Instant messaging

12 Hyperlocal websites Figure 1.98 Frequency of local media usage

Proportion of UK adults

100% 80% Weekly or more Monthly 80% 76%

60% 49% 44% 42% 44% 34% 35% 40% 33% 30% 25% 19% 20% 12% 13% 14% 7% 0% Local / Local Radio Paid for' local Free' local Local Local news Local Internet in Regional TV newspaper newspaper magazines websites e.g. community general for (paid or free) the website for websites e.g. local news your local news website newspaper run by volunteers Source: Ofcom research, 2012 Q: I would now like you to think specifically about your local and regional media usage. By local, I mean the area in which you live. On average, how frequently do you use each of the following things? Base: All UK adults aged 15+ (n=2452)

2 Figure 1.99 Frequency of local community websites

Proportion of UK adults Weekly or more Monthly or more 25% 22% 20% 16% 14% 14% 14% 14% 15% 13% 12% 11% 10% 9% 10% 8% 8% 8% 8% 7% 7% 7% 6% 5% 2% 0% Male Female 15-24 25-34 35-44 45-54 55-64 65+ ABC1 C2DE

Source: Ofcom research, 2012 Q: I would now like you to think specifically about your local and regional media usage. By local, I mean the area in which you live. On average, how frequently do you use each of the following things? Base: All UK adults aged 15+ who use local community websites

3 Figure 1.100 Importance of local media, among users of each service

Proportion of UK adults 0% 20% 40% 60% 80% 100%

Internet in general for local news 32% 30% 38% Local community websites e.g. news website run by volunteers 36% 27% 37% Local news websites e.g. the website for your local newspaper 41% 31% 28% Local magazines (paid or free) 44% 30% 27%

Free' local newspaper 40% 30% 29% 1 to 4 Paid for' local newspaper 30% 27% 43% 5 to 6 Local Radio 26% 30% 44% 7 to 10 Local / Regional TV 18% 23% 59% Source: Ofcom research, 2012 Q: Using a scale of 1 to 10, where one is not at all important and you would not miss it if it were not available, and ten is extremely important and you would miss it if it were not available, how important are the following types of local media to you? Base: All UK adults aged 15+ who use each medium

4 Figure 1.101 Most important local media source Proportion of UK adults 60% 50% All who use any local media once a month or more All who use local community websites once a month or …

40% 31%

20% 17% 14%13% 12%12% 9%11% 9% 9% 6% 6% 3% 2% 1% 0% Local / Regional Local Radio Paid for' local Free' local Local Local news Local Internet in TV newspaper newspaper magazines websites e.g. community general for local (paid or free) the website for websites e.g. news your local news website newspaper run by Source: Ofcom research, 2012 volunteers Q: Using a scale of 1 to 10, where one is not at all important and you would not miss it if it were not available, and ten is extremely important and you would miss it if it were not available, how important are the following types of local media to you? Base: All UK adults aged 15+ (n=2024 for all media, n=328 for local community websites) 5 Figure 1.102

Active hyperlocal websites listed on Openly Local

600

ebsites 432 w 400 295 hyperlocal 200

Number ofNumber 0 2010 2012

Source: Openly Local/Birmingham City University (May 2012)

6 Figure 1.103 Location of hyperlocal websites in the UK

Nation / Region No. sites

London 77 South West England 76 South East England 66 West Midlands 62 East England 38 North West England 32 Yorkshire and Humber 29 Wales 15 Scotland 13 East Midlands 12 North East England 3 Source:Northern Ofcom/Birmingham Ireland City University 3 Source: Openly Local/Ofcom/Birmingham City University

7 Figure 1.104 Council areas with five or more hyperlocal websites

Council Name No. sites Birmingham City Council 28 Wiltshire Council 11 South Gloucestershire District Council 11 Bristol City Council 8 Ryedale District Council 7 City of Edinburgh 7 Stoke-on-Trent City Council 7 Leeds City Council 7 Cornwall Council 7 London Borough of Richmond upon Thames 7 Cardiff Council 6 London Borough of Lambeth 6 North Somerset Council 5 Mendip District Council 5 Cheshire East 5 Brighton and Hove City Council 5 London Borough of Lewisham 5 Greater London Authority 5

Source: Openly Local/Birmingham City University (May 2012)

8 Figure 1.105 Comparison of population and hyperlocal website provision

100 10000 Population Websites 76 77 80 8000 66 62 websites 60 6000

38 40 4000 29 32 hyperlocal Population(000’s) 20 15 12 13 2000 No. of 3 3 0 0

Source: Openly Local / Birmingham City University / ONS / Ofcom (May 2012)

9 Figure 1.106 Stories produced by 312 hyperlocal websites during an 11-day sample period

120 108

websites 80 70

49 40 32 hyperlocal 17 7 5 8 No. of 3 3 1 2 4 3 0 1 - 4 5 - 9 10 - 14 15 - 19 20 - 24 25 - 29 30 - 34 35 - 39 40 - 44 45 - 49 50 - 54 55 - 59 60 - 64 65+ No. of stories produces during sample period

Source: Ofcom / Birmingham City University (May 2012)

10 Figure 1.107 Average hourly stories from hyperlocal sites excluding weekends

38 40 36 34 32 31 33 29 28 30 22 23 20 16 14 14 11 10 10 10 7 7 7 2 1 1 1 3

Average hourly hourly stories Average 0 1:00 2:00 3:00 4:00 5:00 6:00 7:00 8:00 9:00 ------11:00 10:00 12:00 13:00 14:00 15:00 16:00 17:00 18:00 19:00 20:00 21:00 22:00 23:00 24:00 ------1:00 2:00 3:00 4:00 5:00 6:00 7:00 8:00 24:00 9:00 10:00 11:00 12:00 13:00 14:00 15:00 16:00 17:00 18:00 19:00 20:00 21:00 22:00 23:00

Source: Openly Local/Ofcom/Birmingham City University (May 2012)

11 2. Television and audio visual

0 1. KEY MARKET DEVELOPMENTS

1 Figure 2.1 Industry metrics

UK television industry 2005 2006 2007 2008 2009 2010 2011

Total TV industry revenue (£bn) 10.5 10.6 11.1 11.2 11.1 11.7 12.3

Proportion of revenue generated by public funds 25% 25% 25% 24% 25% 23% 22%

Proportion of revenue generated by advertising 35% 33% 32% 31% 28% 30% 29%

Proportion of revenue generated by subscriptions 35% 36% 37% 39% 41% 41% 42%

TV as a proportion of total advertising spend 30% 28% 27% 27% 28% 29% 29%

Spend on originated output by 5 main networks (£bn) 3.0 2.8 2.7 2.6 2.4 2.5 2.5

Digital TV take-up 62% 70% 86% 87% 91% 93% 96%

Proportion of DTV homes paying for TV (Q1) 64% 60% 55% 53% 55% 55% 54%

Viewing per head, per day (hours) in all homes 3.65 3.60 3.63 3.74 3.75 4.04 4.03

Share of the five main channels in all homes 70% 67% 64% 61% 58% 56% 54%

Number of channels broadcasting in the UK 416 433 470 495 490 510 515 Source: Ofcom/broadcasters/Advertising Association/Warc/BARB/GfK. Note: Public funds include the DCMS grant to S4C and BBC funding that is allocated to TV; TV as a proportion of total advertising spend excludes direct mail and is based on Advertising Association/Warc Expenditure Report (www.warc.com/expenditurereport); spend on originations includes spend on nations and regions programming (not Welsh and Gaelic language programmes but some Irish language).

2 Figure 2.2 Total TV industry revenue, by source

Revenue (£m) 12,500

12,400 +0.7% +1.5% +4.9% +8.4% +6.1% £15m £13m 12,300 £43m +2.2% £45m 12,200 +8.3% £59m 12,100 12,000 £403m 11,900 £12,326m 11,800 11,700 11,600 £11,747m 11,500 2010 Subscriber BBC TV Other PSB portfolio PSB NAR Other NAR 2011 revenue revenue spending NAR revenue Source: Ofcom/broadcasters. Note: Figures expressed in nominal terms. PSB NAR comprises Channel 3 licensees (including ITV Breakfast, ITV Plc, Channel Television, STV and UTV), Channel 4, Channel 5 and S4C. PSB portfolio NAR includes commercial channels owned by the PSBs (ITV2, ITV3, ITV4, E4, More 4, Film 4, 5* and 5USA. ‘Other NAR’ comprises the rest of the multichannel market. Platform operator revenues do not include installation costs, equipment sales or subsidies. BBC TV spending represents the amount of BBC revenue that is allocated to TV, which is estimated by Ofcom based on Note 2c in the BBC’s annual report and accounts 2011/12.

3 Figure 2.3 Advertising revenue, by share

1-year change (%) £m £ 3,557m £3,486m 2.4% 4,000 ITV Breakfast £55m £52m -5,1% £518m £561m 3,000 8.4% PSB portfolio channels £824m £837m 1.5% Other multichannels 2,000 £216m £281m £600m £587m 30.2% Channel 5 1,000 -2.2% Channel 4/S4C £1,273m £1,239m -2.7% ITV1/STV/UTV 0 2010 2011

Source: Ofcom/broadcasters. Note: Totals may not equal the sum of the components due to rounding. ITV1/Channel 3 includes ITV Plc, STV, UTV and Channel Television.

4 Figure 2.4 Multichannel take-up in UK households

% of homes 41.7% 44.7% 48.0% 56.7% 64.9% 71.8% 80.3% 87.2% 89.6% 92.1% 93.1% 96.2% TV Households (m) 26 Analogue 24 terrestrial only 22 Digital terrestrial 20 only 18 Analogue cable 16 14 Digital cable 12 10 Free-to-view 8 digital satellite 6 Analogue satellite 4 Pay digital 2 satellite 0 Q1 Q1 Q1 Q1 Q1 Q1 Q1 Q1 Q1 Q1 Q1 Q1 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 Source: BARB Establishment Survey from Q2 2011, GfK NOP research from Q1 2007, previous quarters include subscriber data and Ofcom market estimates for DTT and free satellite. Note: Digital terrestrial relates to DTT-only homes. Figure 2.5 Share of TV viewing, via signal type: 2002 - 2011

Proportion of viewing (%) 70%

60% 64% Analogue terrestrial

50% Analogue satellite 43% 40% Analogue cable 40% Digital terrestrial 30% 21% Digital satellite 20% 14% 9% Digital cable 10% 4% 3% 0% 1% 0% 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

Source: BARB, all individuals (4+), all homes. Based on total minutes of viewing on all sets. Note: New BARB panel introduced in 2010. As a result pre- and post-panel change data must be compared with caution.

6 Figure 2.6 Share of TV viewing of ‘free to view’ channels, by TV home type Proportion of viewing (%)

100%

97.2% 94.9% All mulichannel 90% homes 89.5%

80% 77.2% Digital terrestrial only homes 71.5% 70.5% 70% Digital satellite 63.9% 63.6% homes 62.9% 60% Digital cable 61.4% 59.3% 58.8% homes

50%

40% 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 Source: BARB, all individuals (4+), all homes. Note: New BARB panel introduced in 2010. As a result, pre- and post-panel change data must be compared with caution. ‘Free to view channels’ defined as those available on digital terrestrial only as of May 2012. Not all channels on the digital terrestrial platform were available in previous years, neither are all channels individually reported via BARB, therefore DTT total does not equal 100%.

7 Figure 2.7 Channel share for PSB digital portfolio channels, all homes: 2002 - 2011

3% 3% 4% 7% 9% 12% 14% 15% 17% 19% = PSB digital channels % Share of viewing (%) 25%

20% 2% C5 digital channels 1% 15% 1% 5% 1% 5% C4 digital channels 4% 1% 4% 10% 3% 7% 2% 6% ITV digital channels 5% 5% 1% 4% 5% 4% 1% 3% 1% 1% 1% 1% 5% 5% BBC digital channels 1% 3% 3% 4% 4% 2% 2% 3% 0% 1% 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 Source: BARB, All Individuals (4+), all homes. Note: New BARB panel introduced 1st Jan 2010. As a result, pre- and post-panel change data must be viewed with caution. Data charted based on the following channel groupings: BBC digital channels = BBC3, BBC4, BBC News, BBC Parliament, CBeebies, CBBC. ITV digital = ITV1+1, ITV2, ITV3, ITV4, CITV. C4 digital = C4+1, E4, More4, Film 4. C5 digital = C5+1, 5*, 5USA. Time-shifted channels for digital channels are included within data. . 8 Figure 2.8 Audio-visual consumption online and via mobile: Q1 2008 – Q1 2012 Proportion of UK adults (%) 50%

40% Catch up TV via Internet

29% 30% 27%

23% 22% TV streaming via internet 20% 18% 16% 16% 13% 10%* 10%* 10% TV streaming via Mobile 6%

1% 1% 2% 2% 0% Q1 2008 Q1 2009 Q1 2010 Q1 2011 Q1 2012 Source: Ofcom Technology Tracker. All adults 16+ (note - data has been re-based from all those with internet access and mobile phones respectively).Based on Q1 survey data for each respective year. Internet: Q - Which, if any, of these do you or members of your household use the internet for whilst at home? Mobile: Q - Which if any, of the following activities, other than making and receiving voice calls, do you use your mobile for? * Data for internet responses from Q1 2008 are based on respondents stating ‘watch TV programmes’

9 Figure 2.9 Average daily hours of TV viewing, by age: 2002 vs. 2011

Average hours per day 6

4

5.8 2002 5.3 4.9 2011 4.5 4.4 2 4.0 3.9 3.9 3.6 3.3 3.3 3.5 2.8 2.4 2.5 2.7

0 Individuals Children 16-24 25-34 35-44 45-54 55-64 65+

Source: BARB, all homes. Individuals = 4+. Children = 4-15 years. Note: New BARB panel introduced in 2010. As a result pre and post panel change data must be compared with caution.

10 Figure 2.10 Take-up of audio-visual devices: 2006 – Q1 2012

Proportion of UK adults (%)

100% 96% Digital television 85% 80% DVD player 70% 60% HD-ready TV 55% 47% Games console 40% DVR

20% Smart TV 6% 5% 3D ready TV 0% 2006 2007 Q1 2008 Q1 2009 Q1 2010 Q1 2011 Q1 2012

Source: Ofcom Technology Tracker survey Note: The Question wording for DVD Player and DVR was changed in Q1 2009 so data is not directly comparable with previous years.

11 Figure 2.11 Ownership of TV device, main sets vs. other sets: 2011

Main sets Other sets 100%

80%

60%

40% 73%

20% 45% 41% 29%

14% 10% 0% DVR HDTV (via STB or built-in) DVD/Blue Ray player

Source: GfK NOP research (‘Digital’ data) taken from Ofcom’s July 2011 DTV update report. Remaining data from BARB Establishment survey. Annual network report, Q2 2011. Data based on all UK TV households (= 98% of all UK households)

12 Figure 2.12 Percentage of TV sets sold, by screen size: 2001 – Q1 2012

100% 1.1 1.4 2.3 1.4 2.1 3.0 3.1 5.4 4.6 4.5 6.3 8.9 11.0 11.5 18.2 20.2 23.0 24.1 80% 39.5 35.6 23.1 44.4 42.6 35.3 23.9 35.0 60% 34.1 30.9 32.5 30.6 30.2 20.1 19.6 28.5 27.7 24.1 17.1 40% 25.7 10.3 10.0 14.9 19.2 21.0 22.7 20% 40.3 38.4 34.7 34.5 31.5 28.1 30.4 31.5 27.9 19.7 16.7 13.4 0% 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012*

up to 19" 20" to 25" 26" to 32" 33" to 42" 43+"

Source: GfK sales data estimates. *2012 data represents Q1 only.

13 Figure 2.13 Main sets vs. other sets, by screen size: 2011

100% 4%

26% 15% 80%

40+" 31% 60% 40% 30"-39"

40% 20"-29"

49% 20% 28% 20" and under

0% 4% Main sets Other sets

Source: BARB Establishment survey. Annual network report for Q2 2011. Set level profile data based on all UK TV households (= 98% of all UK households).

14 Figure 2.14 Total TV viewing, main sets vs. other sets: 2002 - 2011 35% 37% 36% 37% 36% 37% 38% 39% 39% 40% = single set HH

Average minutes per day per individual (4+) 250

31 33 27 27 25 25 200 27 28 26 25

150

Other sets

100 200 200 210 209 187 196 195 191 190 192 Main set

50

0 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 Source: BARB, all individuals (4+), all homes. BARB Establishment Surveys – Annual Network Q2 reports. Note: i) New BARB panel introduced in 2010. As a result, pr- and post-panel change data must be compared with caution. ii) ‘Main set’ defined as set located in the living room. ‘Other sets’ defined as all other TV sets in the home.

15 Figure 2.15 Solo viewing and shared viewing in multi-set households – main sets vs. other sets: 2011 Solo viewing Viewing with others Profile of total viewing 100%

32% 80% 51% 57%

60%

40% 68%

49% 20% 43%

0% All sets Main sets Other sets

Source: BARB, all individuals (4+). Based on multi-set households.

16 Figure 2.16 Smart TV sales and market share

Market share Market share (%) Sales units (000s) Sales units 25% 750

20% 20% 600 18% 17% 17% 15% 15% 14% 450 12% 11% 10% 300

5% 5% 150

0% 0 Q1 2010 Q2 2010 Q3 2010 Q4 2010 Q1 2011 Q2 2011 Q3 2011 Q4 2011 Q1 2012

Source: GFK sales estimates

17 Figure 2.17 Reasons people buy a smart TV

80%

60% 60%

40% 39% 40% 32% 27% 24% 20% 18% 20% 15% 15%

0% I needed a I liked the It was the I wanted the It was I wanted to I liked the I like to keep I wanted to I wanted to new TV and look and best TV I best screen nothing to do watch range of up with the stream films watch decided to design of the could get for with the programmes internet latest straight to my internet video buy one with TV my budget internet on my TV connected technology TV clips/films on the latest functionality screen rather services the TV with technology of the TV than a available friends and computer family, rather screen than alone on my computer

Source: Ofcom research, fieldwork carried out by Populus, March to April 2012. Q.D6 Why did you decide to buy your Smart TV? (Multicoded). Base: All respondents with a smart TV (252)

18 Figure 2.18 Consumers’ use of internet connection on smart TVs

35% Used internet connection on Smart TV

Never used internet connection on Smart TV 65%

Source: Ofcom research, fieldwork carried out by Populus, March to April 2012. Q.D7 Have you ever used the internet connection on your Smart TV? Base: All respondents with a smart TV (252)

19 Figure 2.19 Activities undertaken on smart TVs and internet-enabled TVs

60% 54% 51% Smart TVs Internet-enabled TVs

42% 41% 39% 40% 36% 32% 31% 30% 28% 26% 26% 25% 19% 17% 20% 15% 13% 12% 9% 8%

0% Watching Streaming Streaming Watching Accessing Listening to Playing Social Skype Shopping catch-up TV TV movies short clips news music games networking using an app programmes Source: Ofcom research, fieldwork carried out by Populus, March to April 2012. (1) Q.D8 What do you use the internet functionality on your Smart TV for? (Multicoded) (2) When you connect your TV to the internet, what do you tend to do online? (Multicoded) Base: (1) All respondents who have used the internet functionality on their Smart TV (165) (2) All respondents with an internet-enabled TV ( 250)

20 Figure 2.20 Levels of satisfaction with smart TVs

Satisfied Neither satisfied nor dissatisfied Dissatisfied

Smart TVs 87% 6% 7%

0% 20% 40% 60% 80% 100%

Source: Ofcom research, fieldwork carried out by Populus, March to April 2012. (1) Q.D2 Taking all things into account, how satisfied or dissatisfied are you with your Smart TV? (2) Q.E3 Taking all things into account, how satisfied or dissatisfied are you with the experience of connecting your TV to the internet? Base: (1) All respondents who have used the internet functionality on their Smart TV (165) (2) All respondents with an internet-enabled TV (250)

21 Figure 2.21 Attitudes towards Smart TVs Agree Neither agree nor disagree Disagree

I just wanted to buy a new TV, I wasn't concerned if it was internet connected or not * 30% 21% 49%

I don't think I will use the internet connection on my Smart TV very much 31% 19% 50%

I would prefer to watch TV and films streamed from the internet on my Smart TV than on a 71% 17% 11% PC or laptop

I find the menu system on my Smart TV a bit confusing or annoying 25% 20% 55%

I regret buying a Smart TV 5% 17% 77%

I couldn't live without my Smart TV 27% 35% 38%

0% 20% 40% 60% 80% 100%

Source: Ofcom research, fieldwork carried out by Populus, March to April 2012. Q.D16 To what extent do you agree or disagree with the following statements? Base: All respondents who have used the internet functionality on their Smart TV (165) Note: * Among all respondents with a Smart TV (252), 47% agreed, 35% disagreed and17% neither agreed nor disagreed

22 1. TV AND AV INDUSTRIES

23 Figure 2.22 Total TV industry revenue, by source Revenue (£m) Growth 1 year 5yr CAGR £10,030 £10,502 £10,619 £11,041 £11,157 £11,109 £11,747 £12,326 4.9% 3.0% £6,000m 5,242 4,839 £5,000m 4,596 8.3% 6.7% Subscription 4,277 revenue 4,064 £4,000m 3,699 3,795 3,410 2.1% 0.5% Net 3,615 advertising 3,431 3,462 3,576 3,470 3,486 3,557 £3,000m 3,136 revenue

2,622 2,623 2,663 2,690 2,749 2.2% 1.7% BBC income 2,464 2,525 £2,000m 2,443 allocated to TV

£1,000m 3.1% -1.5% Other revenue 746 724 837 780 787 713 732 777 £0m 2004 2005 2006 2007 2008 2009 2010 2011 Source: Ofcom/broadcasters. Note: Figures expressed in nominal terms and replace previous Ofcom revenue data for TV industry, owing to restatements and improvements in methodologies. ‘Subscription revenue’ includes Ofcom’s estimates of BSkyB, Virgin Media, BT Vision, TalkTalkTV, Setanta Sports (until its closure), ESPN and Top Up TV television subscriber revenue in the UK (Republic of Ireland revenue is excluded). It also excludes revenue generated by broadband and telephony. ‘Other’ includes TV shopping, sponsorship, interactive (including premium-rate telephony services), programme sales and S4C’s grant from the DCMS. The BBC re- stated licence fee revenue in 2008. Totals may not equal the sum of the components due to rounding. 24 Figure 2.23 TV industry revenues, by share TV industry revenue shares (%) £10,030 £10,502 £10,619 £11,041 £11,157 £11,109 £11, 747 £12,326 50% 42.4% Subscription 41.4% 40.8% revenue 36.8% 38.3% 40% 34.0% 35.2% 35.7%

34.4% 28.2% Net advertising 30% 34.2% 32.6% 32.4% 31.1% 29.7% 28.9% revenue

20% 24.4% 23.5% 23.8% 23.7% 23.5% 24.0% 22.7% 22.3% BBC income 10% allocated to TV

7.4% 6.9% 7.9% 7.1% 7.1% 6.4% 6.2% 6.4% 0% Other revenue 2004 2005 2006 2007 2008 2009 2010 2011

Source: Ofcom/broadcasters. Note: Figures expressed in nominal terms and replace previous Ofcom revenue data for TV industry, owing to restatements and improvements in methodologies. ‘Subscription revenue’ includes Ofcom’s estimates of BSkyB, Virgin Media, BT Vision, TalkTalkTV, Setanta Sports (until its closure), ESPN and Top Up TV television subscriber revenue in the UK (Republic of Ireland revenue is excluded). It also excludes revenue generated by broadband and telephony. ‘Other’ includes TV shopping, sponsorship, interactive (including premium-rate telephony services), programme sales and S4C’s grant from the DCMS. The BBC re-stated licence fee revenue in 2008. Totals may not equal the sum of the components due to rounding.

25 Figure 2.24

Total TV industry revenue, by sector Growth 5yr Revenue (£m) 1 year CAGR £10,030 £10,502 £10,619 £11,041 £11,157 £11,109 £11,747 £12,326 5% 3% 12,000

8% 7% Platform 10,000 £5,242 operators £4,064 £4,277 £4,839 £3,699 £3,795 £4,596 8,000 £3,410 6% 5% Commercial multichannels £1,300 £1,477 £1,650 £1,755 £1,856 6,000 £1,239 £1,726 £1,619 1% -3% Main commercial 4,000 £2,843 £2,906 £2,725 £2,603 £2,420 £2,359 £2,385 £2,123 PSB channels

2,000 £2,538 £2,597 £2,622 £2,725 £2,734 £2,768 £2,795 £2,843 2% 2% Publicly-funded channels 0 2004 2005 2006 2007 2008 2009 2010 2011

Source: Ofcom/broadcasters. Note: Figures are nominal. Main commercial PSB channels comprise ITV/ITV Breakfast, STV, UTV, Channel Television, Channel 4, Channel 5 and S4C. Commercial multichannels comprise all multichannels including those owned by ITV1, Channel 4 and Channel 5. Publicly-funded channels comprise BBC One, BBC Two, the BBC’s portfolio of digital-only television channels and S4C. S4C is listed under publicly-funded and commercial analogue channels because it has a mixed advertising and public funding model. The BBC re-stated licence fee revenue in 2008. Totals may not equal the sum of the components due to rounding.

26 Figure 2.25 TV net advertising revenues, by source Net advertising revenue (£m) Growth £4,000m 1 year 5yr CAGR £3,615m £3,576m £3,557m £3,431m £3,462m £3,471m £3,486m £3,500m 2% 1% £758m £3,135m £640m £803m £837m £3,000m £759m £808m £824m £105m £173m £786m 2% 2% Commercial £2,500m £276m £386m multichannels £459m £518m £561m £453m £2,000m

£1,500m 8% 15% Commercial PSB £2,686m £2,684m portfolio channels £2,427m £2,387m £2,204m £2,144m £2,159m £1,000m £1,896m

£500m 1% -2% Main commercial PSB channels £0m 2004 2005 2006 2007 2008 2009 2010 2011

Source: Ofcom/broadcasters. Note: Figures expressed are in nominal terms and replace previous data published by Ofcom. Main commercial PSB channels comprise ITV1, STV, UTV, Channel Television, ITV Breakfast, Channel 4, Channel 5 and S4C; Commercial PSB portfolio channels include, where relevant, ITV2, 3, 4, CiTV, E4, More 4, Film 4, 4Music, Five USA and 5* (and their ‘+1’ channels). For previous years closed channels have also been included. Sponsorship revenue not included. Totals may not equal the sum of the components due to rounding.

27 Figure 2.26 TV net advertising revenue market shares: 2010 - 2011

Proportion of NAR by broadcaster (%)

Total = £3,486m Total = £3,557m Other multichannels 100% 23.6% 23.5% PSB portfolios 80% 14.9% 15.8% ITV Breakfast 60% 1.6% 1.5% 6.2% 7.9% Channel 5 17.2% 40% 16.5% Channel 4/S4C 20% 36.5% 34.8% ITV1/Channel 3 0% 2010 2011 Source: Ofcom/broadcasters. Note: ITV1/Channel 3 includes ITV1, STV, UTV and Channel Television.

28 Figure 2.27 Breakdown of other / non-broadcast revenue: 2011 Total non-broadcast revenue = £777m (6%)

Other Sponsorship £163m (31%) £168m (-6%)

Programme sales £34m (-6%)

Interactive £46m (-13%)

PPV TV Shopping £45m (-7%) £229m (21%) S4C £91m (-11%)

Source: Ofcom/broadcasters. Note: Percentage figures in brackets represent year-on-year change for total non-broadcast revenue versus 2010. TV shopping represents aggregate operating margin of products sold via television. Totals may not equal the sum of the components due to rounding. Owing to the nature of these revenue components, annual changes may be a function of a higher number of broadcaster returns being made by the time of writing, rather than material changes in the contributions that these revenue components are making to total industry income. 29 Figure 2.28 Revenue generated by multichannel broadcasters, by genre: 2011 Total revenue = £4,580m across the eight genres included Music £110m (6%) Movies £609m (9%)

Entertainment £1,403m (19%)

Factual £196m (-3%)

Kids Sport £150m (-9%) £1,971m (10%) Leisure News £60m (11%) £80m (25%) Source: Ofcom/broadcasters. Note: Percentage figures in brackets represent year-on-year change for total revenue compared to 2010. The figures in this chart include all sources of revenue accruing to multichannels and are expressed in nominal terms. This includes those set out in Figure 1.22 plus wholesale subscriber payments from platform operators.

30 Figure 2.29 Spend on network TV programmes: 2007 - 2011 1 yr change

£m £4,972m £5,108m £5,107m £5,369m £5,485m 1.6% £6,000m £5,500m 10% Channel 5 £162m £178m £204m £227m £5,000m £205m £149m £230m £191m £224m £210m £230m £219m £206m £348m £358m 11% Other PSB portfolio channels £4,500m £224m £216m £361m £357m £378m £475m £496m £4,000m 0% BBC digital channels £507m £467m £528m £678m £3,500m £716m £672m £755m 3% BBC Two £3,000m £623m £847m £811m £810m 4% Channel 4 £2,500m £840m £856m £777m £2,000m £869m £799m -5% Other digital channels £1,500m £802m £868m -4% ITV1/ITV Breakfast £1,000m £1,730m £1,338m £1,546m £500m £1,166m £1,199m -11% BBC One £0m 2007 2008 2009 2010 2011 12% Film/Sport channels Source: Ofcom/broadcasters. Note: Figures expressed in nominal terms. Figures do not include spend on nations and regions output. BBC digital channels includes BBC Three, BBC Four, BBC News Channel, BBC Parliament, CBBC and CBeebies (but not BBC HD). ‘Other digital channels’ include all genres (excluding Sports and Films). Programme spend comprises in-house commissions, productions, commissions from independents, spend on first-run acquired programmes, spend on rights and on repeats (originations or acquisitions). 31 Figure 2.30 Spend on first-run originated output on the five main networks

Growth £m 1 year 5yr CAGR £3,126m £2,959m -6% -4% £3,000m £2,864m £381m £2,655m £2,657m £367m £332m £2,506m £341m £281m £274m 2% -3% Regional £290m £271m £267m £208m £223m £247m £2,000m £734m £677m 11% -6% £698m £672m £668m Late night £563m

-16% -5% Day time £1,000m £1,670m £1,625m £1,563m £1,494m £1,493m £1,429m -4% -3% Peak time

£0m 2006 2007 2008 2009 2010 2011

Source: Ofcom/broadcasters. Note: Figures are expressed in 2011 prices. They include ITV Breakfast, spending in the nations and regions on English-language programming (and a small amount of Irish-language programmes) but do not include the BBC’s digital channels .

32 Figure 2.31

Total and first-run originated hours of output, all day: 2011

Proportion of hours by broadcaster (%)

Total = 1,527,635 (-6.6%) Total = 256,350 (-12.6%) YOY change (%) 100% Total Hours First Run

-6.8% -15.1% Other Digital 80% Channels

60% 212,535 -12.8% -0.4% Programmes for 1,439,391 Nations & Regions 40% 0.2% 1.9% BBC Digital Channels 20% 12,516 11,648 33,230 13,133 42,498 19,034 -0.3% 0.3.% Main Five Channels 0% (network) Total Hours Total First-Run Hours

Source: Ofcom/broadcasters. Note: Percentage figures in brackets represent year-on-year change. The first-run figures include in-house productions and external commissions, not first-run acquisitions. ITV Breakfast is included within the figures for the five main channels. ‘Other digital channels’ includes Entertainment, Sports, Film, Factual, Children’s, News, Leisure and Music genres. Regional hours exclude Welsh and Gaelic-language programming but include a small proportion of Irish-language programmes.

33 Figure 2.32 Hours of first-run originated output on the five main channels

Growth 1 Year 5 yr CAGR 34,048 35,000 33,379 33,110 2.3% -1.7% 30,485 29,978 30,682 30,000 11,859 11,825 11,977 25,000 10,439 10,997 11,648 5.9% 0.3% Regional 20,000

15,000 0.2% 16,021 16,646 15,536 -3.6% Non-peak 14,632 13,316 13,338 network 10,000

5,000 Peak-time 5,533 5,543 5,597 5,414 5,665 5,696 0.5% 0.6% network 0 2006 2007 2008 2009 2010 2011

Source: Ofcom/broadcasters. Note: Figures include ITV Breakfast but do not include the BBC’s digital channels. Regional hours exclude Welsh and Gaelic-language programming but do include a small proportion of Irish-language programmes.

34 Figure 2.33 First-run originated output by the PSBs per week, all day and peak time

All Day Peak-Time

800 200 168 171 171 167 173 175 676 674 653 629 618 619

BBC digital 600 BBC digital 150 channels channels 64 65 262 247 62 65 63 63 247 Channel 5 Channel 5 243 248 253

Channel 4 12 14 Channel 4 400 71 100 13 12 14 11 74 69 54 27 35

Hours per week 22 64 Hoursper week 22 22 22 22 23 ITV1/ITV 65 61 57 58 59 ITV1/ITV Breakfast Breakfast 25 26 105 119 104 101 106 101 25 26 26 26 BBC Two 200 BBC Two 50 71 68 70 70 73 66 21 21 21 20 22 21 BBC One BBC One 100 105 101 104 106 105 25 27 25 26 26 26 0 0 2006 2007 2008 2009 2010 2011 2006 2007 2008 2009 2010 2011

Source: Ofcom/broadcasters. Note: Figures do not include spend on nations and regions output.

35 Figure 2.34 Genre mix on five main PSB channels in peak time, by hours Proportion of total hours 7,933 7,936 7,929 7,923 7,978 7,964 8,009 7,961 100% Sport 401 341 507 366 457 357 483 334 Light Entertainment & 1,268 1,277 1,144 1,395 1,362 1,282 1,225 1,520 Modern Music 80% Films 688 618 611 757 579 630 675 661 Drama 1,746 60% 1,935 1,952 1,833 1,648 1,559 Education 1,863 1,954 General Factual

40% Religious/Ethics 2,656 2,512 2,501 2,105 2,253 2,149 2,370 2,365 Children's

20% Arts & Classical Music 52 73 64 51 54 50 56 50 296 318 318 303 312 308 328 298 Current Affairs 835 785 788 792 871 878 879 857 0% News 2004 2005 2006 2007 2008 2009 2010 2011 Source: Ofcom/broadcasters. Note: Includes five main channels including ITV Breakfast, figures do not include hours of nations and regions output. 36 Figure 2.35 Genre mix on five main PSB channels in daytime Proportions of total hours 21,668 21,553 21,313 21,703 21,612 21,597 21,654 21,610 100% Sport 1,958 1,837 1,753 1,687 1,796 1,505 1,650 1,488 Light Entertainment & 2,491 2,370 2,435 2,814 2,596 2,627 2,810 2,713 Modern Music 80% Films 1,811 1,716 1,593 1,645 1,557 1,721 2,080 2,464 2,759 2,817 2,590 2,719 2,375 Drama 2,056 1,797 2,654 60% 275 16 738 821 816 810 733 659 Education 3,150 5,777 General Factual 3,512 3,744 4,368 4,637 4,775 5,232 40% Religious

4,906 4,575 Children's 4,333 4,275 4,074 4,137 4,214 4,204 20% Arts & Classical Music 379 384 460 451 459 438 440 549 Current Affairs 3,299 3,191 3,041 3,068 2,901 2,881 2,793 2,679 0% News 2004 2005 2006 2007 2008 2009 2010 2011 Source: Ofcom/broadcasters. Note: Includes five main channels plus ITV Breakfast. Figures do not include hours of nations and regions output.

37 Figure 2.36 The BBC’s digital channels genre mix by hours: all day Output (hrs) 32,506 33,148 33069 33151 33202 33230 Investment (£m) £267m £255m £236m £226m £242m £230m 100% 1,788 1,576 1,622 1,588 1,369 2,210 Other 1,386 1,743 1,569 1,532 1,768 1,908 1,077 1,048 1,182 1,077 1,296 1,151 2,335 2,471 2,629 2,405 2,648 80% 2,503 Light Entertainment & Modern Music

7,957 8,326 8,347 8,406 8,213 8,178 Arts & Classical Music 60% 1,168 1,331 611 1,339 1,472 1,421 General Factual

40% Children's

16,762 16,740 16,593 16,546 16,460 16,555 20% Current Affairs

News 0% 2006 2007 2008 2009 2010 2011

Source: Ofcom/broadcasters. Note: BBC digital channels include BBC Three, BBC Four, BBC News 24, BBC Parliament, CBBC, CBeebies. Investment figures are in 2011 prices. ‘Other’ includes: Education, Drama, Film, Religion and Sports.

38 Figure 2.37 Total multichannel hours and first-run originations/acquisitions, 2011

Proportion of hours by channel genre (%)

Total = 1,439,391 Total = 212,535 1 year change % Total (2010 = 1,544,668) (Total 2010 = 249,753) Total First Run 100% 21,177 0% -38% Music 280,720 11,019 80% -4% -36% Movies 163,657 51,587 140,285 -38% 3% Sport 60% 87,600 39,785 -31% -31% News 115,922 55,593 40% 225,570 1,603 24% 7% Leisure 9,594 4,603 20% 13% 32% Kids 385,852 57,359 28% 89% Factual 0% All Hours1 First-Run2 Hours -10% 6% Entertainment

Source: Ofcom/broadcasters. Note: Broadcast hours exclude Sky Box Office and ‘barker’ channels, which promote TV content. First-run hours include first-run in-house, commissioned and acquired content.

39 Figure 2.38 Content spend by commercial multichannels in key genres: 2010 - 2011

1 year change % £3,000m £2,635m £25m 8% Leisure £70m £25m £2,500m £2,322m £90m £23m 8% Music £71m £23m £243m £99m £2,000m £257m 2% Kids £652m

£1,500m £518m -1% Factual

£1,000m -9% News £1,487m £1,289m -5% Movies £500m

26% Entertainment £m 2010 2011 15% Sport Source: Ofcom/broadcasters. Note: Excludes BBC digital channels.

40 Figure 2.39 Online TV revenues

Revenues (£m)

250 229.3

Annual 200 Growth

151.7 Total 143.4 51% 150 73% FTV views 14% Subscriptions 82.8 100 13% PPV transactions 78.0 31% DTO transactions 23.2 49.6 38.3 20.4 50 21.6 19.1 17.9 56.8 11.0 15.0 43.3 11.7 17.2 0 12.0 2006 2007 2008 2009 2010 2011

Source: Screen Digest. Note: FTV = free to view; PPV = pay per view; DTO = download to own.

41 1. TV AND AV VIEWER

42 Figure 2.40 Multichannel take-up in UK households

% of homes 41.7% 44.7% 48.0% 56.7% 64.9% 71.8% 80.3% 87.2% 89.6% 92.1% 93.1% 96.2% TV Households (m) 26 Analogue 24 terrestrial only 22 Digital terrestrial 20 only 18 Analogue cable 16 14 Digital cable 12 10 Free-to-view 8 digital satellite 6 Analogue satellite 4 Pay digital 2 satellite 0 Q1 Q1 Q1 Q1 Q1 Q1 Q1 Q1 Q1 Q1 Q1 Q1 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 Source: BARB Establishment Survey from Q2 2011, GfK NOP research from Q1 2007, previous quarters include subscriber data and Ofcom market estimates for DTT and free satellite. Note: Digital terrestrial relates to DTT-only homes. Figure 2.41

Platform demographics by age, socio-economic group and viewing hours

% platform profile Average Hours per day

16-24 25-44 45-64 65+ AB C1 C2 DE 4.3 100% 4.0 4.5 12% 10% 3.9 17% 25% 22% 24% 3.7 4 27% 33% 33% 80% 42% 3.5 29% 38% 31% 18% 20% 19% 3 31% 60% 21% 16% 2.5 24% 2 40% 30% 31% 29% 45% 36% 24% 28% 38% 30% 1.5 20% 28% 1 25% 21% 23% 26% 27% 14% 14% 14% 16% 0.5 0% 5% 0

Source: Ofcom 2012 data and BARB 2011data 44 Figure 2.42

Average hours of television viewing per day, by age, all homes

Hours viewed

6 Individuals 5 Children Adults 16-24 4.04 4.03 4 3.7 3.65 3.6 3.63 3.74 3.75 Adults 25-34 Adults 35-44 3 Adults 45-54 Adults 55-64 2 Adults 65+

1

0 2004 2005 2006 2007 2008 2009 2010 2011 Source: BARB. Note: New BARB panel introduced in 2010. As a result, pre- and post-panel change data must be compared with caution.

45 Figure 2.43

Average 2011 audiences, weekdays/weekends: by day part, all homes

Average audience (millions) 28

24

20

16 Weekend 12 Weekday 8

4

0 06:00 - 09:00 - 12:00 - 15:00 - 18:00 - 21:00 - 00:00 - 03:00 - 07:00 10:00 13:00 16:00 19:00 22:00 01:00 04:00 Source: BARB

46 Figure 2.44

Average 2011 weekday audiences, by day part and age, all homes Average audience (millions) 7

6 Children Adults 16-24 5 Adults 25-34 Adults 35-44 4 Adults 45-54 3 Adults 55-64 Adults 65+ 2

1

0 06:00 - 09:00 - 12:00 - 15:00 - 18:00 - 21:00 - 00:00 - 03:00 - 07:00 10:00 13:00 16:00 19:00 22:00 01:00 04:00 Source: BARB

47 Figure 2.45

Average 2011 weekend audiences, by day part and age, all homes Average audience (millions) 7

6 Children Adults 16-24 5 Adults 25-34 Adults 35-44 4 Adults 45-54 3 Adults 55-64 Adults 65+ 2

1

0 06:00 - 09:00 - 12:00 - 15:00 - 18:00 - 21:00 - 00:00 - 03:00 - 07:00 10:00 13:00 16:00 19:00 22:00 01:00 04:00 Source: BARB

48 Figure 2.46 Average weekly TV reach in all homes, by channel

15-minute consecutive weekly reach – full weeks (%) 100%

82% 83% 87% 80% 78% 78% 79% Multichannels 80% 79% 79% 77% 77% 71% 70% 69% 79% 74% 74% BBC One 69% 68% 67% 63% 60% 61% 68% 57% 57% 59% 58% 60% 63% 64% 56% BBC Two 62% 58% 55% 55% 50% 57% 54% 54% 54% ITV1 41% 40% 44% 44% 40% 40% 42% 40% 40% C4 + S4C Five 20%

0% 2004 2005 2006 2007 2008 2009 2010 2011 Source: BARB Note: due to a new BARB measurement panel from 2010 onwards, 2010 and post data should be viewed with caution when comparing with previous years. Note: In 2010 C4 and S4C became two separate channels following digital switchover in Wales. For the purposes of this report the two channels remain labelled together in relevant charts. S4C weekly reach’s in 2011 was 0.6%. HD and SD viewing included. 49 Figure 2.47

Channel shares in all homes: 1982 to 2011 Audience share, all homes (%) 60%

50% BBC One

40% BBC Two

30% ITV 1

Channel 20% 4 + S4C Five 10% Others 0% 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 Source: BARB, TAM JICTAR and Ofcom estimates. Note: due to a new BARB measurement panel from 2010, 2010 and post data should be viewed with caution when comparing with previous years. Note: In 2010 C4 and S4C became two separate channels following digital switchover in Wales. For the purposes of this report the two channels remain labelled together in relevant charts. S4C 2011 channel share = 0.1%. HD and SD viewing included. 50 Figure 2.48

Five main PSB channels’ audience share, all homes Audience share (%) 73.8% 70.3% 66.8% 63.6% 60.8% 57.8% 55.5% 53.7% 80% 70% 6.6% 6.4% 5.7% 9.8% 5.2% 60% 9.7% 5.0% Five 9.8% 8.6% 4.9% 7.8% 4.5% 50% 6.8% 4.4% 22.8% 6.3% 6.0% Channel 4 + 21.5% 19.7% S4C 40% 19.2% 18.4% 17.8% 17.0% 16.0% ITV1 30% 10.0% 9.4% 8.8% 8.6% 7.8% 7.5% 6.9% 6.6% 20% BBC Two

24.7% 23.3% 22.8% 22.0% 21.8% 20.9% 20.8% 20.7% 10% BBC One 0% 2004 2005 2006 2007 2008 2009 2010 2011 Source: BARB. Note: New BARB panel introduced in 2010. As a result, pre- and post-panel change data must be compared with caution. Note: In 2010 C4 and S4C became two separate channels following digital switchover in Wales. For the purposes of this report the two channels remain labelled together in relevant charts.S4C 2011 channel share = 0.1%. HD and SD viewing included

51 Figure 2.49

Five main PSB channels’ audience shares, by platform Audience share (%) 100% 100%

Terrestrial homes 80% 74% 69% 65% 62% Digital 69% 60% 56% terrestrial 60% 65% 62% 60% 58% 56% homes All homes 49% 48% 49% 48% 49% 40% 48%

Cable and 20% satellite homes

0% Dec-05 Dec-06 Dec-07 Dec-08 Dec-09 Dec-10 Dec-11

Source: BARB, all homes, all viewers, various platforms. Note: New BARB panel introduced in 2010. As a result, pre- and post- panel change data must be compared with caution. Note: In 2010 C4 and S4C became two separate channels following digital switchover in Wales. For the purposes of this report the two channels remain grouped together in relevant charts.S4C 2011 channel share (all homes)= 0.1%. HD and SD viewing included.

52 Figure 2.50

Channel share, by platform: 2011

Audience share (%) Analogue terrestrial Digital terrestrial Digital cable Digital satellite 60% 52% 50% 44%

40% 37%

24% 21% 18% 20% 19% 17% 16% 15% 15% 12% 7% 6% 6% 6% 5% 6% 4% 5% 4% 3% 0% BBC One BBC Two ITV1 C4 + S4C Five Other

Source: BARB. Note: In 2010 C4 and S4C became two separate channels following digital switchover in Wales. For the purposes of this report the two channels remain labelled together in relevant charts.S4C 2011 channel share (all homes) = 0.1%. HD and SD viewing included

53 Figure 2.51

PSB and portfolio channel shares in multichannel homes Audience share (%) 100%

26.5% 33.1% 31.2% 29.7% 28.1% 28.4% 28.6% 80% 35.1% Other digital channels

11.3% 13.6% 15.9% 16.9% 20.3% 60% 7.4% 9.2% 17.4% PSB portfolio channels 40% PSB channels 57.5% 57.7% 57.6% 56.7% 56.0% 54.8% 54.0% 53.2% 20%

0% 2004 2005 2006 2007 2008 2009 2010 2011

Source: BARB. Note: New BARB panel introduced in 2010. As a result, pre- and post-panel change data must be compared with caution. Note: In 2010 C4 and S4C became two separate channels following digital switchover in Wales. For the purposes of this report the two channels remain grouped together in relevant charts.S4C 2011 channel share = 0.1%. HD and SD viewing included.

54 Figure 2.52 Broadcaster portfolio shares in multichannel homes Audience share (%) 100% Other 14.3% 14.0% 12.9% 12.8% 12.3% 11.8% 13.2% 11.5% 2.6% Virgin Media 2.8% 2.8% 2.6% 2.7% 2.6% 2.7% 1.9% 4.0% 3.1% 2.9% 2.7% 2.6% 4.1% 80% 3.4% 3.9% 3.9% 4.0% 8.8% Viacom 4.2% 4.0% 4.0% 8.4% 7.6% 6.8% 7.4% 9.3% 8.7% 5.9% UKTV 10.4% 5.9% 6.0% 5.9% 5.1% 5.6% 5.1% 5.3% 11.8% BSkyB* 11.5% 60% 11.2% 11.2% 11.7% 11.5% 8.6% 9.6% Five Channel 4 23.1% 22.6% 22.6% 22.7% 40% 21.7% 22.1% 22.0% 22.3% ITV BBC

20% 29.5% 29.8% 30.6% 31.2% 31.8% 31.4% 32.3% 32.7%

0% 2004 2005 2006 2007 2008 2009 2010 2011 Source: BARB. Note: due to a new BARB measurement panel from 2010 onwards, post-2010 data should be viewed with caution when comparing with previous years.*BSkyB took ownership of VMTV in June 2010, Virgin Media TV portfolio shares are included in the BSkyB figure for the whole of 2010. ITV includes all ITV network channels, not just those owned by ITV plc. Note: In 2010 C4 and S4C became two separate channels following digital switchover in Wales. For the purposes of this report the two channels remain grouped together in relevant charts.S4C 2011 channel share = 0.1%. HD and SD viewing included. 55 Figure 2.53

BBC portfolio share in multichannel homes Audience share (%) 29.5% 29.8% 30.6% 31.2% 31.8% 31.4% 32.2% 32.7% 35% 1.3% 1.3% 1.3% 1.3% 0.8% 30% 1.2% 1.3% 0.6% 0.6%0.7% 1.3% 0.5% 0.6%0.8% 0.8% 1.1% 1.2% 1.3% 0.6% 0.8% 0.5% 0.5%0.6% 0.7% Other 0.6% 0.5%0.6% 0.6%1.0% 0.4%1.1% 0.4%1.2% 1.3% 1.4% 1.5% 0.7% 0.2%0.9% 0.3% 25% CBeebies 6.9% 7.1% 7.0% 6.9% 6.6% 6.5% 6.7% 6.9% CBBC 20% BBC News 24

15% BBC Four BBC Three 10% 19.5% 19.3% 20.0% 19.9% 20.4% 20.0% 20.2% 20.5% BBC Two 5% BBC One

0% 2004 2005 2006 2007 2008 2009 2010 2011 Source: BARB Note: ‘Other’ includes BBC Parliament, BBC Choice, BBC HD and BBC Knowledge. Due to a new BARB measurement panel from 2010 onwards, post-2010 data are not directly comparable with previous years. HD and SD viewing included 56 Figure 2.54 ITV portfolio shares in multichannel homes

Audience share (%) 22.1% 22.0% 22.3% 22.6% 22.7% 23.1% 25% 21.7% 22.6%

0.9% 0.9% 1.0% 1.1% 1.0% 1.2% 0.5% 0.7% Other 1.4% 1.4% 1.6% 1.8% 2.2% 2.4% 20% 1.7% 2.0% 2.0% 2.2% 2.4% 2.6% 2.6% 2.7% CITV 15% ITV4

10% 18.9% 18.4% ITV3 17.5% 17.6% 17.2% 16.9% 16.6% 16.5%

5% ITV2

ITV1 0% 2004 2005 2006 2007 2008 2009 2010 2011 Source: BARB. Note: ‘Other’ includes (when relevant) ITV Play, Men & Motors, GMTV2, Granada Breeze, Plus, ITV News. ITV1, ITV2, ITV3 and ITV4 and include +1 services’ shares. Note: New BARB panel introduced in 2010. As a result, pre- and post-panel change data must be compared with caution 57 Figure 2.55

Channel 4 portfolio shares in multichannel homes Audience share (%)

8.6% 9.6% 11.2% 11.2% 11.7% 11.5% 11.5% 11.8% 12% 0.3% 0.2% 0.3% 0.3% 0.3% 0.6% 0.8% 0.9% 0.8% 0.8% 0.8% 10% 0.5% 1.0% 4Music 0.1% 0.9% 1.2% 1.2% 1.4% 1.9% 1.0% 1.6% 1.0% 1.8% 1.2% 1.4% C4+1 8% 1.2% 1.8% 1.8% 1.9% 1.8% More4 Total 6% Film4 Total 8.2% 4% 7.9% 7.4% 7.3% 6.8% 6.4% 6.1% 5.9% E4 Total 2% C4 + S4C

0% 2004 2005 2006 2007 2008 2009 2010 2011 Source: BARB. Note: New BARB panel introduced in 2010. As a result, pre- and post-panel change data must be compared with caution.E4, More4 and Film 4 respective +1 channel shares are included. Note: In 2010 C4 and S4C became two separate channels following digital switchover in Wales. For the purposes of this report the two channels remain labelled together in relevant charts. S4C 2011 channel share = 0.1%. HD and SD viewing included.

58 Figure 2.56

Five portfolio shares in multichannel homes

Audience share (%) 7% 5.1% 5.3% 5.1% 5.6% 5.9% 6.0% 5.9% 5.9%

6% 0.8% 0.7% 0.9% 0.1% 0.6% 1.0% 5% 0.6% 0.6% 0.1%0.4% 0.5% Five USA/5 0.5% USA 4% Fiver/5* 3% 5.3% 5.1% 4.9% 4.6% 4.7% 4.7% 4.5% 4.4% 2% Five 1%

0% 2004 2005 2006 2007 2008 2009 2010 2011 Source: BARB. Note: 5* and 5 US include their +1 service share. Note: New BARB panel introduced in 2010. As a result, pre- and post-panel change data must be compared with caution HD and SD viewing included.

59 Figure 2.57

BSkyB portfolio shares in multichannel homes Audience share (%)

10.4% 9.2% 8.7% 7.6% 6.8% 7.4% 8.4% 8.8% Former Virgin TV 12% portfolio* 0.3% Sky Arts/Real Lives 10% 0.6% 0.3% 0.1% 0.6% 2.9% 0.5% Sky Travel 8% 1.6% 1.5% 2.4% 0.5% 0.0% 2.7% 0.5% 0.0% 0.7% 0.5% 0.6% Sky News 6% 2.2% 2.4% 3.1% 2.1% 2.2% 2.5% 2.5% 4% 2.2% 1.6% Sky One/Two/Three 1.5% 1.5% 1.3% 1.2% Sky movie channels 2% 3.6% 3.4% 3.2% 3.2% 2.6% 2.9% 2.7% 2.7% 0% Sky sports channels 2004 2005 2006 2007 2008 2009 2010 2011 Source: BARB. Note: New BARB panel introduced in 2010. As a result, pre- and post-panel change data must be compared with caution. *BSkyB took ownership of VMTV in June 2010, Virgin Media TV portfolio shares are included in the BSkyB figure for the whole of 2010 onwards. HD and SD viewing included.

60 Figure 2.58

UKTV portfolio shares in multichannel homes Audience share (%) 5% 4.2% 4.0% 4.0% 3.9% 3.9% 4.0% 4.1% 4.0% Other

4% 0.2% 0.1% 0.1% UKTV G2/Dave 0.2% 0.3% 0.3% 0.2% 0.1% 0.2% 0.1% 0.2% 0.4% 0.2% 0.7% 1.3% UKTV Drama/Alibi 0.3% 0.2% 1.3% 0.2% 0.5% 1.2% 1.1% 3% 0.3% 0.4% 0.2% 0.6% UKTV 0.5% 0.2% 0.1% 0.4% 0.4% Documentary/Eden 0.5% 0.4% 0.1% 0.8% 0.6% 0.2% 0.1% 0.1% 0.1% 2% 0.1% 0.1% UKTV Food/Good Food 0.7% 0.6% 0.3% 0.2% 0.6% 0.4% 0.4% 0.8% 0.4% UKTV 0.4% 0.2% 0.3% 0.3% 0.1% History/Yesterday 1% 1.9% UKTV Style/Home 1.6% 1.4% 1.2% 1.1% 1.2% 1.2% 1.1% UKTV 0% Gold/G.O.L.D/Watch 2004 2005 2006 2007 2008 2009 2010 2011 Source: BARB. Note: UKTV portfolio channels have evolved over the past twelve months. In the 2008 figures, new channel names and shares have been matched to old channels. Dave went live in Oct 2007. Note: New BARB panel introduced in 2010. As a result, pre- and post-panel change data must be compared with caution. HD and SD viewing included.

61 Figure 2.59

The top channels by share in multichannel homes: 2010 to 2011

Share Rank Share Rank Channel 2011 2011 2010 Channel 2011 2011 2010 BBC One 20.5% 1 1 CBeebies 1.3% 11 10 ITV1 16.5% 2 2 More4 1.2% 12 14 Channel 4 6.7% 3 3 Sky Sports 1 1.2% 13 13 BBC Two 6.5% 4 4 BBC News 1.2% 14 15 Channel 5 4.4% 5 5 ITV4 1.1% 15 16 ITV2 2.7% 6 6 Dave 1.1% 16 12 ITV3 2.4% 7 8 Sky One 1.1% 17 17 E4 1.8% 8 7 Pick TV 1.0% 18 18 BBC Three 1.5% 9 12 5 USA 1.0% 19 20 Film4 1.4% 10 11 Yesterday 0.8% 20 27

Source: BARB. Note: Includes channels’ +1 services. Note: New BARB panel introduced in 2010. As a result, pre- and post-panel change data must be compared with caution. HD and SD viewing included.

62 Figure 2.60

Age and gender profile of the 30 most-viewed channels in multichannel homes Older

Yesterday ITV3 BBC4 BBC News BBC1 BBC2 ITV1 5 USA GOLD ITV4 CH5 More4 Sky News Sky Sports 1 Pick TV Sky Sky Living ITV2 Film4 Sky Sports 2 CH4 Sports 5* News Dave Female Sky 1 Male BBC3 Comedy Cbeebies E4 Central CBBC Disney Channel

Younger

Source: BARB Note: The profile of a channel is calculated relative to the television population in multichannel homes. Includes channel’s +1 services. HD and SD viewing included.

63 Figure 2.61 Live versus time-shifted viewing, DVR homes

Average minutes viewed per day 250 13% 15% 15% 16% 14% 15% % timeshifted 16 18 200 14 16 16 15 16 14 15 Viewed 1-7 days 12 14 after broadcast 150 10

Viewed on same day as live 100 189 184 163 166 150 160 Live

50

0 2006 2007 2008 2009 2010 2011 Source: BARB, DVR owners, all homes. Note: New BARB panel introduced in 2010. As a result, pre- and post-panel change data must be compared with caution. Time-shifted viewing defined as total minutes of viewing on same day as live (VOSDAL) + Viewing 1-7 days after broadcast (Coded Playback). All viewing (via a TV set) of broadcast content viewed within 7 days after broadcast is reported by BARB. This will include viewing to catch-up TV services and content viewed via player services such as BBC iPlayer, ITV Player, 4OD etc 64 Figure 2.62 Proportion of time shifted viewing, by age

25%

16-24 20%

25-34 15% 35-44

10% 45-54

55-65 5%

65+

0% 2006 2007 2008 2009 2010 2011

Source: BARB, DVR owners, all homes. Note: New BARB panel introduced in 2010. As a result, pre- and post-panel change data must be compared with caution.

65 Figure 2.63

Proportion of adults with home internet who watch online catch-up TV: 2009 to 2012

Proportion of households (%) 50% 48% Q1 2009 Q1 2010 Q1 2011 Q1 2012 41% 40% 39% 40% 37% 37%38% 38%38% 35% 36% 35% 35% 33% 34% 31% 31% 32% 32% 29% 29% 30% 26% 23% 24% 24% 24% 24% 21% 20% 18% 18% 14% 10% 10%

0% Total 16-24 25-34 35-54 55-64 65+ Male Female Source: Ofcom research Q1 2012 QE5A. Which, if any, of these do you or your household use the internet for whilst at home? Base: All adults who have the internet at home (n=2823 UK, 423 16-24, 524 25-34, 1113 35-54, 431 55-64, 330 65+, 1367 Male, 1456 Female) 66 Figure 2.64 Proportion of adults with home internet who watch online catch-up TV

50 48%

39% 40 37% 18 36% 32% Use less 30 18 often 16 16 15 21% 20 Used in last 30 9 week 21 21 10 20 17 12 0 Total 16-24 25-34 35-54 55-64 65+ Source: Ofcom technology tracker Q1 2012 Base: All adults who have the internet at home (n=2823 UK, 423 16-24, 524 25-34, 1113 35-54, 431 55-64, 330 65+, 1367 Male, 1456 Female) Question: Which, if any, of these do you or members of your household use the internet for whilst at home?/ And which, if any, of these activities have you or members of your household used the internet for in the last week?

67 Figure 2.65 Unique Audience of major online catch-up TV services

Total 22.6 23.6 25.2 24.8 Unique audience (m) 10

BBC iPlayer 8 ITV Player 6 Channel 4oD

4 Channel 5 - Demand Five Sky Player 2 TVCatchup

0 Mar-11 Jun-11 Sep-11 Dec-11 Mar-12

Source: UKOM/Nielsen, home and work panel. Note: ‘Active reach’ is the percentage of all active unique persons aged 2+ who visited the site or used the application. ‘Active is defined as anyone who used an internet-enabled computer within the time period. ‘Demand Five trend data not available prior to March 2010 due to change in UKOM definitions.

68 Figure 2.66 Requests to the BBC iPlayer, by platform

Requests (m)

160 Online TV requests Virgin Media Cable TV requests

140 23 24 120 25 25 25 25 25 23 24 100 24 24 23 24 23 23 20 80 20 21 21 20 18 17 17 19 20 19 18 60 115 120 17 16 109 16 101 96 97 96 16 90 94 93 91 90 14 15 15 15 84 86 85 40 15 73 77 68 69 67 70 68 70 66 60 65 53 45 43 45 20 37 37 39 37 31 36

0 Jan-09 Jan-10 Jan-11

Source: BBC

69 Figure 2.67 Unique audiences to selected online film and TV sites Unique audience (m)

3.00 LOVEFiLM.com

MSN Video

blinkBox

Virgin Media Movies 2.00 Hulu

Yahoo! Movies

Netflix

1.00 Blinkx

Metacafe

Google Video

Watchfreemovies.ch 0.00 Mar-11 Apr-11 May-11 Jun-11 Jul-11 Aug-11 Sep-11 Oct-11 Nov-11 Dec-11 Jan-12 Feb-12 Mar-12 sidereel

Source: UKOM/Nielsen, home and work panel.

70 Figure 2.68 Unique audiences to selected video-sharing sites

Growth% Unique audience (m) Mar 11 – Mar 12 30 0 Total Videos / Movies 6 YouTube 25 -73 Google 20 Video -51 MSN Video 15 51 Dailymotion

10 -48 Bing Videos

-22 5 Metacafe

-41 Vimeo 0 Mar-11 Jun-11 Sep-11 Dec-11 Mar-12 -19 Yahoo! Video Source: UKOM/Nielsen, home and work panel. Note: ‘Active reach’ is the percentage of all active unique persons aged 2+ who visited the site or used the application. ‘Active is defined as anyone who used an internet-enabled computer within the time period. 71 Figure 2.69

Video on demand (VoD) use in Virgin Media homes

VoD views per month/VoD reach

90 80 70 Q4 2008 60 50 Q4 2009 90m 40 87m Q4 2010 53m 72% 30 64% 33m 47% 52% Q4 2011 20 30 35 36 33 10 0 Average total VoD views Average VoD views per Average VoD reach per month month per user

Source: Virgin Media company results 2008-2011.

72 Figure 2.70

Use of games consoles that use the device for additional services

% of households with games consoles that use the device for additional services 30 27% 26%

20 16% 14% 10% 10 7%

0 Online gaming Watch DVDs/ Blu-ray Catch-up TV Web browsing Watch video clips Watch live TV

Source: Ofcom research, Q1 2012 Base: UK adults 16+ who have access to a games console at home (n=1958) QB5. Which, if any, of these do you use your games console for?

73 Figure 2.71

Opinions on programme standards over time

70%

60% 54% 55% 58% 55% 49% 50% 47% 46% 55% 44% 53% 40% 41% 40% 40% 33% 35% 31% 30% 34% 32% 31% 28% 20% 12% 15% 9% 13% 13% 12% 10% 10% 10% 11% 12% 0% 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

Got worse Improved Stayed the same

Source: Ofcom Media tracker. Base: All with TV, but excluding those never watching (1,723). Q - Do you feel that over the past year television programmes have improved, got worse or stayed about the same?

74 Figure 2.72 Attitudes towards television programme standards 2011, by age

% of respondents

48% 55% 57% 55% 59%

4% Got worse 12% 12% 9% Improved 18% Stayed the same 46% 31% 32% 32% 22%

All Adults 16-34 35-54 55-64 65+

Source: Ofcom Media tracker 2011. Base: All who watch TV (1,723); 16-34 (573); 35-54 (602); 55-64 (223); 65+ (325). Q - Do you feel that over the past year television programmes have improved, got worse or stayed about the same?

75 Figure 2.73 Multi-tasking when watching television

% of respondents 76% 66% 54% 31% 22% 16%

3% Several times/year 8% 7% At least once/month 29% 13% 6% Several times/week 21% 30% 3% 5% 3% Every day 36% 11% 5% 26% 5% 16% 9% 4% 12% 5% 5% 2% Use mobile Use landline Use internet Listen to Listen to Play games phone phone radio music* on console

Source: Ofcom Media tracker 2011 Base: All respondents. *On stereo or MP3 player or mobile phone or computer. Q - At the same time as watching TV on your TV set, how frequently, if at all, do you also do any of the following activities? 76 Figure 2.74 Reasons for using online TV and film services

80%

60%

40% 59% 20% 34% 25% 25% 17% 15% 0% Missed the Want to watch Use it when there Just to pass some Programme/film Someone watching programme/film programme/film at is nothing on time/relax was recommended something else at when on TV and time that suits me 'normal' TV to by someone I know the time it was on use/d to catch up watch so used to catch up

Source: Ofcom Media tracker 2011. Base: All who use online ‘video on demand’ (658). Note: Only responses ≥ 10% charted. All responses unprompted. Q - What would you say are the reasons you use/ used your on demand service, whether you were catching up or accessing other content?

77 3. Radio and audio

0 Figure 3.1 UK radio industry key metrics

UK radio industry 2006 2007 2008 2009 2010 2011

Weekly reach of radio (% of population) 89.8% 89.8% 89.5% 89.8% 90.6% 90.8%

Average weekly hours per head 21.2 20.6 20.1 19.8 20.1 20.4

BBC share of listening 54.7% 55.0% 55.7% 55.3% 55.2% 54.7%

Total industry revenue £1,126m £1,174m £1,137m £1,092m £1,123m £1,162m

Commercial revenue £512m £522m £488m £432m £438m £456m

BBC expenditure £614m £652m £649m £660m £685m £706m

Community radio revenue - - £7.5m £9m £10m £10.5m

Radio share of advertising spend 3.0% 2.9% 2.8% 2.8% 2.7% 2.7%

DAB digital radio take-up (households) 19.5% 27.3%% 32.1% 34.5% 38.2% 42.6%

Source: RAJAR (all adults age 15+), Ofcom calculations based on figures in BBC Annual Report and Accounts 2011-12 note 2c (www.bbc.co.uk/annualreport), AA/Warc, broadcasters. Revenue figures are nominal. Figure 3.2

Radio industry revenue and spending 2006-2011

£ million 1174 1162 1200 1126 1137 1092 1123 1000 456 Total commercial 512 522 488 432 438 800

600

400 652 649 660 685 706 BBC expenditure 614 (estimated) 200

0 2006 2007 2008 2009 2010 2011

Source: Broadcasters Note: BBC expenditure figures are estimated by Ofcom based on figures in Note 2c of the BBC Annual Report (www.bbc.co.uk/annualreport); figures in the chart are rounded and are nominal. Does not include community radio revenue. Figure 3.3

Commercial revenue percentage change 2010-2011

All commercial radio National advertising Local advertising Sponsorship 5% 4.1% 4.0% 4% 2.8% 3% revenue 2% 1% 0% -1% -2% -3% -4%

Percentage change in -5% -4.3%

Source: Ofcom / operator data 2010-2011 Figure 3.4 BBC station expenditure percentage change 2010-11 to 2011-12 Annual % change of BBC radio-10% station expenditure 0% 10%

BBC Radio 5 Live -4.9% BBC Radio 4 -3.3% BBC Local/National 0.5% 1Xtra from the BBC 0.9% BBC Radio 2 2.2% BBC Asian Network 3.2% BBC Radio 3 3.6% BBC Radio 1 5.2% BBC Radio 5 Live Sports Extra 8.2% BBC 6 Music 8.3% BBC Radio 4 Extra 0.0% BBC network average 0.0% Source: BBC Annual Report 2011-12. Note that these are financial year figures, excluding BBC-wide overheads, and are therefore not directly comparable to those set out in Section 3.2.2. Figures are nominal. It should be noted that the percentage changes are based on operating expenditure for individual stations based on financial years and they do not include BBC-wide overheads; as such they are not comparable with the calendar year figures that are set out in Section 3.2.2. Figure: 3.5

Listening hours by age group, 2001-2011

Average hours listened per week 30 65+ 26.9 26.7 26.8 27.3 26.7 26.4 25.7 25.2 25.8 26.6 26.5 26.2 25.1 25.6 55-64 26.6 26.6 26.1 25.4 25.2 25.7 25.4 25.3 25.5 25.8 25 25.5 25.3 25 25 24.4 24.2 24.3 24.4 24 24.2 24.2 45-54 23.6 24 23.8 23.6 22.9 23.7 23.6 23.7 23.7 23.4 22.4 22 22.1 22.5 22.7 21.7 23.3 All Adults 21.9 22.2 22.7 21.9 22.1 22 22.2 21.8 21.4 21.5 20 20.9 20.9 21 20.4 35-44 20.1 19.7 19.9 19.2 19.3 18.7 19.1 17.8 25-34 17.2 17 15 16.3 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 15-24

Source: RAJAR, average weekly listening per listener, 2001-2011

5 Figure: 3.6

Radio’s ‘share of ear’ 2009-2010, by all adults and 15-18s

Share of audio listening 100 17% 18% 80 38% 44% Other audio 60 listening

40 83% 82% Radio 62% 56% 20

0 2009 2010 2009 2010

All adults 15-18s

Source: BBC (A&M Audiences)/Brand Driver, Share of Ear research 2009, 2010

6 Figure 3.7

Digital radio’s share of radio listening, Q1 2012

35%

29.2% 30% 28.2% 29.1% 26.9% 26.5% 3.4% 24.8% 25.0% 3.9% 24.6% 3.2% 3.7% Internet 25% 3.6% 1.8% 1.8% 2.9% 2.8% 3.1% 1.7% 1.8% 1.8% 2.0% 4.5% 20% 1.8% 2.2% 4.4% 4.8% 4.7% 4.1% 4.3% 4.1% Digital 4.4% unspecified 15%

DTV 10% 19.4% 19.1% 17.2% 18.0% 15.8% 15.3% 15.8% 16.7% 5% DAB

Digital radio platforms share of all 0% radio hours Q2 2010 Q3 2010 Q4 2010 Q1 2011 Q2 2011 Q3 2011 Q4 2011 Q1 2012

Source: RAJAR Note: ‘Digital unspecified’ relates to listening to digital-only stations where the survey respondent has not specified the listening platform used. From Q1 2012 ‘Internet’ has been reclassified as ‘Online/Apps’ Figure 3.8

Ownership of DAB set, Q1 2012

Percentage of adults who claim to own a DAB set / have a DAB set in the home

45%

30%

42.6% 38.2% 32.1% 34.5% 15% 27.3% 19.5% 13.6% 8.1% 0% Q1 2005 Q1 2006 Q1 2007 Q1 2008 Q1 2009 Q1 2010 Q1 2011 Q1 2012

Source: RAJAR / Ipsos MORI / RSMB Q1 2005-2012.

8 Figure 3.9 Tak e-up of equipment capable of receiving digital radio, Q1 2012

Year-on-year increase (pp) +3 +2 +5 +12

Share of households 100%

80%

60% 98% 40% 80%

20% 43% 39%

0% Internet Digital TV DAB radio Smartphone

Source: Research from: Ofcom, RAJAR Q1 2012

9 Figure 3.10

UK commercial radio revenue and BBC radio spending

£ million 1126 1174 1137 1162 1,200 1092 1123 Total

1,000 BBC expenditure (estimated) 800 685 706 614 652 649 660 Total commercial 600 National commercial 512 522 488 400 438 456 268 271 246 432 Local commercial 201 210 220 153 156 142 200 136 136 130 Commercial 96 100 92 0 91 94 89 sponsorship 2006 2007 2008 2009 2010 2011

Source: Ofcom / operator data / BBC Annual Report 2006-2011 Note: BBC expenditure figures are estimated by Ofcom based on figures in Note 2c of the BBC Annual Report (www.bbc.co.uk/annualreport); figures in the chart are rounded and are nominal. Revenue £m Share of all advertising Revenue £m Share of all advertising

Figure 3.11

UK radio advertising spend and share of display advertising, 2008 – 2011

Revenue £m Share of all advertising

£1000m 4% Radio advertising expenditure Radio share of all media advertising

£800m 2.7% 2.8% 2.7% 2.7% 3%

£600m 454 404 420 427 2% £400m

1% £200m

£0m 0% 2008 2009 2010 2011

Source: AA/Warc Expenditure Report. Figures are nominal. www.warc.com/expenditurereport

11 Figure 3.12

Commercial radio revenue per listener

£ per listener 20 £16.59 £16.69 £15.70 15 £13.71 £13.33 £13.55

10

5

0 2006 2007 2008 2009 2010 2011

Source: Broadcaster returns and RAJAR, 2006-2011. Figures are nominal. Figure 3.13

Number of commercial analogue licences owned, by group

Lincs FM Guardian Media 3.8% 6-10 stations in group 5.8% UTV 16.4% 3.8%

UKRD 2-5 stations in group 6.1% 5.8%

Bauer Radio 14.0% Independent 15.7%

Global Radio 24.2%

Source: Ofcom, April 2012 Figure 3.14 Share of all radio listening hours, Q1 2012

Percentage share of listening hours Orion, 0.9% Other, 7.9% Absolute, 2.0%

UTV, 3.2% BBC network, 45.9% GMG, 4.4%

Bauer, 10.9%

Global, 15.7%

BBC local/regional, 9.4% Source: RAJAR, all adults (15+), year ending Q1 2012, does not include community radio listening Figure 3.15 Commercial radio by weekly audience reach: Q1 2012

Weekly UK 37.1% 25.9% 11.0% 8.8% 5.7% 2.5% 1.3% audience reach Annual change in reach -1.7pp -0.8pp +0.2pp -0.3pp +1.1pp -0.4pp 0

20,000 40% 35% 15,000 30% 25% thousands) ( 10,000 19,279 20% 15% 13,473 5,000 10% 5,718 5% 4,585 2,978 1,312 680 Weekly reach reach Weekly 0 0% Global Bauer GMG UTV Absolute Orion Lincs FM

Source: RAJAR, all adults (15+), Q1 2012, does not include community radio listening Figure 3.16 Weekly reach of BBC stations: Q1 2012 Year on year Average weekly listening (% UK adults), and year on year change percentage point change BBC Radio 2 28.0% -0.2

BBC Radio 1 21.4% -1.5

BBC Radio 4 19.8% -1.2

BBC Local/Regional 19.0% -0.8

BBC Radio FIVE LIVE 12.3% -0.6 BBC Radio 3 3.7% -0.7 BBC Radio 4 Extra 2.9% +0.7 BBC 6 Music 2.8% -1.0 BBC World Service 2.5% +0.3 1Xtra from the BBC 1.8% +0.1 BBC Asian Network UK 1.0% 0 0% 10% 20% 30%

Source: RAJAR, all adults (15+), Q1 2012 Figure 3.17

BBC radio stations: spend on radio content, 2011-12

Cost (£m), (and % change year on year)

BBC English Local Radio 112.7 (-1.8%) BBC Radio 4 88.1 (-5.1%) BBC Radio 5 Live 51.1 (-7.8%) BBC Radio 2 47.2 (+1.1%) BBC Radio 3 37.8 (+1.3%) BBC Radio 1 38.4(+4.6%) BBC Radio Scotland 23.2 (-2.5%) BBC Radio Ulster / Foyle 17.3 (+6.8%) BBC Radio Wales 13.0 (no change) BBC Radio Cymru 11.4 (-3.4%) BBC Asian Network 8.5 (-1.2%) BBC 1 Xtra 7.2 (+2.7%) BBC Radio 6 Music 7.8 (+6.8%) BBC Radio 4 Extra 5.0 (+5.7%) BBC Radio nan Gàidheal 3.6 (-5.3%) BBC Radio 5 Live Sports Extra 2.6 (+4%) 0123456781091112131415161718192021222324252627282930313233343536373839404142434445464748495051525354555657585960616263646566676869707172737475767778798081828384858687888990919293949596979899100101102103104105106107108109110111112113114115116117118119120121122123124125126127128129130131132133134135136137138139140141142143144145146147148149150

Source: BBC Annual Report 2011-12 Figure 3.18 UK radio stations broadcasting on analogue, DAB digital radio, and community radio, May 2012

Type of station AM FM AM/FM total

Local commercial 54 242 296

UK-wide commercial 2 1 3

BBC UK-wide networks 1 4 5

BBC local and nations 36 46 46

Community radio 6 192 198

TOTAL 99 446 548

Source: Ofcom, May 2012 Note: the conditions of each licence will determine the amount of programming that may be shared between these licensed services. Here we have taken the view that a service providing at least four hours a day of separate programming (even if the same brand has other services) equals one service. Figure 3.19 Average income for community radio stations, 2008 to 2011

Income 2008 2009 2010 2011

Average (mean) income £84,000 £75,500 (-10.2%) £65,750 (-12.9%) £60,250 (-8.3%)

Median income £53,750 £46,750 (-15.0%) £42,500 (-7.14%) £40,500 (-4.8%)

Source: Ofcom analysis of community broadcasters returns Note: The data collection period changed from the financial year to the calendar year as of 2011. Data from previous years has been adjusted to reflect this. Figure: 3.20

Distribution of total income levels across the community radio sector 30

25

20

15 27 22 10 20 19 18 12 5 10 9 7 6 6 5 4 4 1 1 0 2 0

Source: Ofcom analysis of community broadcasters’ returns

20 Figure 3.21 Community radio income, by source

Community radio stations’ income 2011

Income by type The average community radio station income was around £60,250 Other 18% On-air advertising and sponsorship 26% Donations 13%

SLAs Grants 10% 33%

Source: Ofcom analysis of community broadcasters’ returns Figure: 3.22

Average income by type of community served

£100,000

Other £80,000 £76,500 £77,000 £70,250 14% 12% Donations £60,250 5% 10% £60,000 24% 5% 18% 13% £51,000 SLAs £43,000 13% 29% £39,500 39% Grants £40,000 10% 16% 36% 8% 45% 15% 33% 23% On air advertising and 36% £20,000 37% 11% sponsorship 43% 38% 26% 36% 24% 15% 26% 18% £0 8% Sector average Geographic - Geographic - Minority ethnic Military (9) Religious (13) Youth (16) (176 stations) town/rural (72) urban (29) (25)

Source: Ofcom analysis of community broadcasters’ returns

22 Figure 3.23 Average expenditure for community radio stations, 2008 to 2011

Expenditure 2008 2009 2010 2011

Average (mean) expenditure £86,500 £76,500 (-11.4%) £67,000 (-12.3%) £64,250 (-4.1%)

Median expenditure £55,000 £52,250 (-5.3%) £43,000 (-17.5%) £41,000 (-4.9%)

Source: Ofcom analysis of community broadcasters returns Note: The data collection period changed from the financial year to the calendar year as of 2011. Data from previous years has been adjusted to reflect this. Figure 3.24 Community radio expenditure, by source

Community radio stations’ expenditure 2011

Expenditure by type The average community radio station income was around £64,250 Other 21%

Staff Technical 47% 9%

Admin and marketing 11% Premises 12%

Source: Ofcom analysis of community broadcasters’ returns Figure: 3.25

Average expenditure by type of community served

£100,000

£83,250 Other £80,000 18% £73,000 £67,000 £64,250 16% Technical costs 6% £60,000 £60,000 21% 7% 8% £54,500 23% £46,500 12% Admin and marketing 9% 13% 7% 39% 48% 11% 19% 9% £40,000 17% Premises 12% 12% 14% 15% 14% 9% 56% 10% Staff £20,000 12% 7% 47% 46% 47% 42% 33% 31% £0 Sector average Geographic - Geographic - Minority ethnic Military (9) Religious (13) Youth (16) (176 stations) town/rural (72) urban (29) (25)

Source: Ofcom analysis of community broadcasters’ returns

25 Figure 3.26 Community radio hours and volunteers

Sector average

Total live hours per week 84

Total original hours per week 91

Speech output as a percentage of total daytime output 31%

Number of volunteers 68

Source: Ofcom analysis of community broadcasters returns Figure 3.27

Recorded music retail revenues: 2008-2011

Revenues (£bn) 1.75 CAGR (%) 1.5 1.32 0.05 1.23 1 year 3 year 1.25 0.10 0.06 1.12 1.07 0.13 0.04 0.04 -4.4 -4.7 Total 1 0.14 0.16 0.75 1.4 -7.3 Music 1.17 videos 1.05 0.5 0.93 0.87 10.7 6.6 Singles 0.25 -6.9 -6.1 Albums 0 2008 2009 2010 2011

Source: Entertainment Retailers’ Association yearbook, 2012. Figures are nominal.

27 Figure 3.28

Distribution of recorded music retail revenues: 2008-2011 Total recorded music revenues £1.27bn £1.17bn £1.07bn £1.02bn 100% 13% 20% 26% Albums 80% 33% Albums 54% 60% Singles

87% 40% 80% Digital share 74% 67% Singles 46% 20% Physical share Revenue share (%) 0% 2008 2009 2010 2011 Single/album split in 2011

Source: Entertainment Retailers’ Association yearbook 2012 Note: This chart does not include revenues from music videos.

28 Figure 3.29

Recorded music sales by volume: 2008-2011

Sales volumes (million units) 177.9 180 161.8 160 152.8 139.8 134.6 140 10.3 124.8 16.1 117.5 115.2 120 21 100 26.6 176.6 Digital 80 149.7 159.7 Physical 60 129.5 118.5 110.3 103.8 40 90.9 20 2.1 0 4.9 3.1 1.3 2008 2009 2010 2011 2008 2009 2010 2011 Albums Singles

Source: Entertainment Retailers’ Association yearbook 2012

29 Figure 3.30

Consumer spending on digital music: 2006-2011 CAGR (%) Revenues (£m) 450 1 5 £406.5 year year 49.5 £318.3 28 27 Total 300 £256.5 24.9 14.4 99 48 Subscription £173.0 347.7 150 £120.8 283.7 230.3 -4 -4 Mobile £72.0 purchases 150.9 102.5 59.7 23 28 Online 0 purchases 2006 2007 2008 2009 2010 2011 Source: Screen Digest Note: Due to different data sources this chart is not directly comparable with previous charts. Figures are nominal.

30 Figure 3.31

Reach of radio, by sector

Percent of population 100% 90.0% 89.8% 89.9% 89.4% 89.8% 90.6% 90.8% 89.8% All radio

67.6% 66.6% All BBC 80% 66.7% 66.0% 66.2% 66.2% 66.0% 67.1% 62.7% 61.9% 62.3% 61.5% 61.5% 63.7% 64.9% 63.9% All commercial

60% BBC network 58.5% 57.9% 58.4% 58.9% 59.4% 60.6% 61.3% 60.0% Local commercial 51.0% 50.3% 50.1% 49.5% 49.7% 51.5% 52.0% 51.1% 40% 30.5% 30.6% National 27.8% 27.4% 28.5% 26.4% 26.8% 26.2% commercial 20.5% 20.2% 19.7% 19.0% 17.7% 18.4% 18.7% 19.0% BBC nations / 20% local 5.6% 6.4% 6.0% 6.1% 6.7% 6.3% 6.0% 6.0% Other

0% 2005 2006 2007 2008 2009 2010 2011 Q1 2012

Source: RAJAR, All adults (15+), calendar years 2005-2011, Q1 2012

31 Figure 3.32

Share of listening hours, by sector

Percent of listening hours 60% 54.8% 54.9% 55.1% 55.7% 55.3% 55.2% 54.7% 55.4% All BBC Radio 46.6% 46.3% 44.4% 45.2% 46.1% 46.0% 45.9% 43.9% BBC network

40% 43.2% 42.8% 42.7% 42.2% 42.3% 42.6% 43.0% 42.3% 33.0% 32.3% All commercial 31.6% 31.3% 31.7% 31.5% 31.2% 30.3% Local commercial

20% National 12.0% commercial 10.9% 10.4% 11.1% 10.9% 10.6% 11.1% 11.8% BBC nations/local 10.2% 10.5% 9.9% 9.5% 8.7% 8.9% 8.7% 9.4% 2.0% 2.3% 2.1% 2.1% 2.4% 2.2% 2.3% 2.4% Other 0% 2005 2006 2007 2008 2009 2010 2011 Q1 2012

Source: RAJAR, All adults (15+), calendar years 2005-2011, Q1 2012

32 Figure 3.33

Changes in listening hours by sector: 2007 - 2011

Percentage change in listening hours

All Radio All BBC All Commercial BBC network radio BBC local / national National commercial Local commercial

10% 7.7% 4.7% 2.5% 2.9% 1.9% 1.2% 0%

-10% -10.8%

-20%

Source: RAJAR, all adults (15+), data based on calendar years 2007 and 2011 Figure 3.34 Changes in listening hours by age: 2007-2011

Percentage change in listening hours

All 15+ 15-24 25-34 35-44 45-54 55-64 65-74 75+

15% 11.1% 10.5% 10.1% 10%

5% 2.5% 3.4% 1.4% 0%

-5% -6.5% -10% -8.8%

Source: RAJAR, all adults (15+), data based on calendar years 2007 and 2011 Figure 3.35 Average weekly listening by demographic, year ending Q1 2012

Weekly listening hours 30 Average listening per week 25 22.6 hours

20 25.7 25.9 26.6 15 24.5 23.7 24.2 22.1 21.5 21.3 10 19.2 16.9 5

0 15-24 25-34 35-44 45-54 55-64 65-74 75+ Adult Adult ABC1 C2DE Men Women Adults Adults

Source: RAJAR, all adults (15+), year ending Q1 2012, average weekly listening hours per listener

Figure 3.37

Share of listening hours across analogue and digital platforms

Radio listening share by digital and analogue listening 100% 17.8% 20.1% 24.0% 26.5% 29.2% 80% 9.5% Digital 12.5% 9.3% 8.1% 7.7% 60% Unspecified 40% 72.7% 67.5% 66.7% 65.4% 63.1% Analogue 20%

0% Q1 2008 Q1 2009 Q1 2010 Q1 2011 Q1 2012

Source: RAJAR Ipsos MORI/ RSMB. All adults (15+), data relates to corresponding year ending each date shown Note: Unspecified relates to listening where the radio platform was not confirmed by the listener. Figure 3.38

Digital radio listening by age group, (monthly)

Digital radio listening by age group (at least monthly) 60%

40%

58% 59% 56% Q1 2011 50%53% 52% 53% 53% 50%53% 20% 42%44% 36% 25% Q1 2012

0% All 16+ 16-24 25-34 35-54 55-64 65-74 75+

Source: Ofcom research, Base: All who listen to the radio, Q1 2012 (n=2963), Q1 2011 (n=2811) Q:Use digital radio at least monthly (includes digital listening via DTV, DAB set and online)

38 Figure 3.39 Audience profiles and platform split, by sector and station, year ending Q1 2012

Share All Radio / BBC / commercial National commercial BBC stations of radio listening 100% 46% 9% 12% 30% 4% 2% 1% 8% 17% 1% 12% 4% 100% 8 6 9 7 9 8 10 4 8 6 7 6 7 14 18 22 80% 29 33 29 27 31 Not Stated 31 34 39 54 60% 70 Digital 40% 77 72 70 63 62 67 63 61 60 59 54 20% 39 26 Analogue 0%

Source: RAJAR, year ending Q1 2012, adults 15+ Figure 3.40 Most popular digital-only stations, Q1 2012

Average weekly reach Q1 2012 (millions) % change year on year

2.0

+29.6% Radio group 1.5 +12.1% Bauer -5.3% -9.5% BBC 1.0 +19.1%+2.7% +8.1%+14.4% Independent / other 1.5 +37.4% 1.5 Absolute +14.0% 1.1 0.5 1.0 +15.9%+20.0% Global 1.0 0.9 0.9 0.9 0.7 0.6 +61.9% -26.2% 0.3 0.3 -50.6% 0.3 0.2 0.0 0.2 Q Chill Heat The HitsThe Jazz FM Jazz Planet Rock BBC 6 Music Classic Rock Classic Absolute Radio Smash Hits Radio BBC Radio 4 Extra 1Xtra 1Xtra from the BBC Absolute Radio 80s Absolute Radio 90s Absolute Radio 00s Five Five Live Sports Extra Source: RAJAR, Q1 2012, adults 15+ Figure 3.41 Average weekly reach and share of listening hours by nation: 2011 Listening hours share 100% 2% 2% 1% 2% 8% Other 25% 31% 31% 80% 40% 38% Local/Nations 13% Commercial 60% 12% 12% 12% UK 9% 13% 9% 9% Commercial 40% 8% 22% BBC Local/Nations 47% 49% 46% 20% 37% BBC Network 24% 0% England Scotland Wales Northern UK TOTAL Ireland

Average weekly 22.5 hours 21.4 hours 23.2 hours 22.0 hours 22.5 hours listening Reach 91.1% 87.3% 93.2% 90.1% 91.0% Source: RAJAR, All adults (15+), calendar year 2011

41 Figure 3.42

Location of listening – year to Q1 2012

Work/Elsewhere 15% In-vehicle 20%

Home 65%

Source: RAJAR, year ending Q1 2012, all adults 15+ Figure 3.43

Listening to radio via internet, digital television, DAB set and mobile phone

Proportion of respondents (%) who have listened to radio via digital television, internet, DAB set or mobile phone Digital TV Internet DAB Mobile Phone 50% 40% 28% 28% 27% 27% 27% 27% 26% 25% 25% 25% 25% 30% 25% 25% 24% 24% 24% 23% 23% 22% 21% 21% 18% 17% 17% 16% 16% 16% 16%

20% 15% 14% 14% 14% 14% 13% 13% 12% 12% 11% 11% 11% 10% 10% 10% 10% 10% 7% 7% 10% 6% 0% UK 2011 UK UK 2012 UK 2008 UK 2009 UK 2010 UK 2012 UK Wales 2012 Wales UK rural 2012 rural UK England 2012 England Scotland 2012 Scotland N Ireland 2012 Ireland N UK urban 2012 urban UK

Source: Ofcom research, Quarter 1 2012 Base: All adults aged 16+ (n = 3772 UK, 2251 England, 500 Scotland, 513 Wales, 508 Northern Ireland, 2731 UK urban, 1041 UK rural, 5812 UK 2008, 6090 UK 2009, 9013 UK 2010, 3474 UK 2011, 3772 UK 2012) QP3. How often, if at all, do you access the radio via – Digital radio via: TV, Internet, DAB radio, mobile phone?

43 Figure 3.44

Number of analogue and digital radio sets sold 2006 to 2011

Total annual 9.4 million 10.4 million 9.3 million 9.2 million 8.5 million 6.8 million sales

Digital share of 18.5% 20.1% 22.5% 20.9% 22.3% 27.4% sales 10 8.3 7.7 7.2 7.3 8 6.6 Analogue sets 6 5.0 DAB sets 4 1.7 2.1 2.1 1.9 1.9 1.9 2 Radio set sales (millions) sales set Radio 0 Year to Q1 2007 Year to Q1 2008 Year to Q1 2009 Year to Q1 2010 Year to Q1 2011 Year to Q1 2012

Source: GfK sales data, 2006-2012. Note: Figures cover GB only, GfK Panelmarket data represent over 90% of the market. Categories of device included are; portable radios, personal media players, car audio systems, home audio systems, clock radios, radio recorders, headphone stereos, tuners and receivers. Figure 3.45

Have you heard of the term ‘DAB’ digital radio?

Don't know 2% No 16%

Yes 82%

Source: Ofcom research 2012

45 Figure 3.46

Likelihood to buy a DAB radio within the next 12 months

Percentage of respondents who listen to the radio but have no DAB set in the home

70% 65% 60% 50% 40%

30% 16% 19% 20% 10% 0% Likely to buy Unlikely to buy Don't know

Source: Ofcom research, Q1 2012 Base: Those who listen to the radio but have no DAB sets in the home (n=1855) QP12: How likely is it that your household will get a DAB radio in the next 12 months?

46 Figure 3.47

Unique audience of selected music streaming sites

Unique audience (m)

2 Spotify 1.75 Soundcloud 1.5 Last.fm 1.25 Radio Player Hypster.com 1 Grooveshark 0.75 We7.com 0.5 Yahoo! Music 0.25 Napster 0 Jango.com Mar-11 Jun-11 Sep-11 Dec-11 Mar-12

Source: UKOM / Nielsen. Month of April 2012, home and work panel. Applications included. Radio player data starts Apr 11

47 Figure 3.48 Audio internet usage

% of respondents 2010 2011 2012 19% 20% 18% 16% 16%

12% 8% 8% 7% 7% 3% 4% 2% 2% 0% Listening to radio Streamed audio services Streamed audio services (free) (subscription based)

Source: Ofcom research, Q1 2012 Base: Those with access to the internet at home (n= 2823) QE5A. Which, if any, of these do you or members of your household use the internet for whilst at home?

48 Figure 3.49 BBC iPlayer quarterly radio requests

Radio requests (millions) 150 134 140 117 120 35 105 106 32 On-demand 96 94 95 28 Simulcast 90 84 28 28 27 28 26 26 60 102 105 89 69 69 77 78 30 66 58

0 Q1 2010 Q2 2010 Q3 2010 Q4 2010 Q1 2011 Q2 2011 Q3 2011 Q4 2011 Q1 2012

Source: Ofcom calculations based on BBC iStats

49 Figure 3.50

Time spent using selected music services and media players

Time per person (hours) 2:00:00 Spotify (App)

1:45:00 iTunes (App) Windows Media 1:30:00 Player (App) Hypster 1:15:00 We7.com 1:00:00 Last.fm 0:45:00 Soundcloud 0:30:00 Grooveshark 0:15:00 Napster 0:00:00 Mar-11 Jun-11 Sep-11 Dec-11 Mar-12 Radioplayer

Source: UKOM/Nielsen. Month of April 2012. Home and work panel. Applications included. No radio player data for March 2011

50 Figure 3.51 MP3 player/iPod ownership and personal use

% of respondents Personal use Ownership 50% 43% 44% 41% 40% 37% 35% 31% 31% 29% 30% 26% 27%

20%

10%

0% UK England Scotland Wales Northern Ireland

Source: Ofcom research, Quarter 1 2012 Base: All adults aged 16+ (n = 3772 UK, 2251 England, 500 Scotland, 513 Wales, 508 Northern Ireland) QB1: Which of the following do you, or does anyone in your household, have in your home at the moment? QB2. Do you personally use: MP3 player/ iPod? Please note data not comparable to 2010 figures

51 4.1 Internet and web-based content 4.1 Key market developments Figure 4.1 UK internet and web-based content market: key statistics

UK internet and web-based content 2007 2008 2009 2010 2011 2012 market 1PC/laptop take-up (%) 71 72 74 76 78 79

1Internet take-up (%) 64 67 73 75 77 80

1Total broadband take-up (%) 52 58 68 71 74 76 1Fixed broadband take-up (%) n/a n/a 68 71 67 72

1Mobile broadband take-up (%) n/a n/a 12 15 17 13

1Internet on mobile-phone take-up (%) n/a n/a 20 21 32 39

1Social networking online take-up (%) n/a 20 30 40 46 52

2Internet advertising expenditure (£) 2.8bn 3.4bn 3.5bn 4.1bn 4.8bn n/a

2Mobile advertising revenue (£) n/a 29m 38m 83m 203m n/a

Source: 1Ofcom consumer research, Q1 each year, 2Internet Advertising Bureau/PwC

2 Figure 4.2 Take-up of mobile phones and smartphones, UK adults

Smartphone Non-smartphone Total mobile

98 98 97 95 100% 92 92 92 88 80 80% 32 38 54 49 53 51 55 60% 58 69 40% 66 60 20% 41 43 46 39 37 30 11 0% Proportion of of Proportion UK adults (%) UK Male Female 16-24 25-34 35-54 55+ ABC1 C2DE

Source: Ofcom Tecnology tracker, Jan/Feb 2012 QD2. Do you personally use a mobile phones? /QD4 Do you personally use a smartphone? Base: Total UK Adults aged 16+ (n = 3772 unweighted total)

3 Figure 4.3 Importance of smartphones for internet access

“My phone is more important to me for accessing the internet than any other device” Net agreement 33% 42% 100% Strongly 22 disagree 31 80% Slightly 20 disagree 60% 22 Neither/nor 16 40% 13 19 Slightly agree 17 20%

Smartphone users (%) users Smartphone Strongly agree 16 23 0% 2011 2012

Source: Ofcom omnibus research, March 2011/2012 Q.15c Please tell me how much you agree or disagree with each of the following statement: My phone is more important to me for accessing the internet than any other device? 2012 Base: Total GB adults who use a Smartphone (n = 654)/ Total 2011 GB adults who use a smartphone (n = 474).

4 Figure 4.4 Smartphone ‘addiction’

Net agreement 5.6 5.5 100% 24 25 80% Low

60% 35 37 40% Moderate

20% 41 37 Smartphone users (%) users Smartphone 0% High 2012 2011

Source: Ofcom omnibus research, March 2012/2011 Q14 Choose a number between 1 and 10, where 1 represents ‘I’m not at all addicted to my mobile phone’ and 10 represents ‘I’m completely addicted to my mobile phone’. Low is 1, 2, 3; moderate: 4, 5, 6, and high: 7, 8, 9, 10. 2012 Base: Total GB adults who use a Smartphone (n = 654)/ Total 2011 GB adults who use a smartphone (n = 474).

5 Figure 4.5 Activities conducted on a smartphone by GB adults Any 92 96 Taking photos/video 37 71 Internet surfing 44 68 Email 51 68 Listening to music 35 61 Downloading apps 25 58 Social networking 42 57 Playing games 26 56 Used Maps/GPS 23 51 regularly Picture messaging (MMS) 18 49 Instant Messaging (IM) 31 49 Ever used Accessing general news 21 44 Watching video clips 16 43 Accessing sports news 17 37 Checking in to a place 12 30 Tweeting 13 23 Watching TV programmes/film 8 22 Using voice activated services 6 14

0% 20% 40% 60% 80% 100% Smartphone users (%) Source: Ofcom omnibus research, March 2012 Q.5 Which, if any, of the following functions or activities have you ever used your smartphone for ? Q.6 Which of them do you use your smartphone for regularly ? Total GB adults who use a smartphone (n = 654) 6 Figure 4.6 Activities conducted less on other devices since getting a smartphone Watching video clips on PC/laptop 51 Instant Messaging (IM) from PC/laptop 47 Taking photos/video using a camera 43 Accessing general news from a PC/laptop 39 Social networking from a PC/laptop 37 Maps/GPS on laptop/sat nav 36 Reading a newspaper 35 Email from a PC/laptop 35 Accessing sports news on PC/laptop 35 Accessing news on TV/radio 34 Emailing/uploading photographs 34 Accessing sports news on PC/laptop 32 Listening to music 32 Watching TV on PC/laptop 28 Internet surfing on PC/laptop 26

0% 20% 40% 60% Smartphone users (%) Source: Ofcom omnibus research, March 2012 Q.7 For each activity, please tell m whether you do more, less or the same amount on other devices since you have had your Smartphone ? Base: All GB adults with a smartphone who have ever conducted the activity on their smartphone (all base over n = 75 shown) 7 Figure 4.7 Principal device for selected activities among smartphone and tablet owners Tablet more than smartphone About the same Smartphone more than tablet Don't know 100% 6 27 21 33 36 28 80% 34 55 53 64 67 60 60% 39 45 35 42 34 35 40% owners (%) owners 24 31 25 22 20 20% 39 30 31 35 21 25 27 12 13 13 14 Proportion of of Proportion smartphone and tablet 0% Taking Picture Instant Maps/GPS Listening to Downloading Email Social Watching Playing Browsing the photos messaging Messaging music apps networking short video games internet (MMS) (IM) clips

Source: Ofcom omnibus research, March 2011 Q8 You mentioned earlier you have a tablet, which of the following activities do you use your tablet more or less for compared to your Smartphone? Base: All GB adults with a smartphone and tablet who have ever conducted the activity on their smartphone (all base over n = 75 shown)

8 Figure 4.8 Activities conducted on smartphone while out shopping

Took a picture of the product 31 Compared a price to a price online 25 Scanned a bar code to get more product info 21 Read product reviews online 19 Researched product features online 19 Used phone to redeem a mobile coupon 13 Searched for coupons or deals online 11 Any 57

0% 20% 40% 60% Smartphone users (%)

Source: Ofcom omnibus research, March 2012 Q.8b Which, if any of the following activities have you ever done on your Smartphone while out shopping ? Base: Total GB adults who use a smartphone (n = 654) 9 Figure 4.9 UK advertising expenditure, by category 2006 – 2011

Internet share of total advertising expenditure 12% 16% 20% 24% 26% 30% Advertising CAGR expenditure 17,081 5yr 1yr 16,333 16,589 16,102 (£000) 15,684 Cinema 2% -7% 15,000 14,504 2,171 2,040 Radio -2% 2% 2,322 1,712 1,729 1,686 Outdoor -1% 1% 3,945 10,000 6,439 5,713 4,306 Direct Mail -6% 1% 6,523 4,386 Press -10% -8% 4,159 4,083 Television 1% 2% 5,000 4,016 3,922 3,525 3,905 Internet 19% 17% 4,784 3,350 3,541 4,098 2,016 2,813 0 2006 2007 2008 2009 2010 2011 Source: AA/Warc Expenditure Report Notes: All figures are nominal; CAGR = compound annual growth

10 Figure 4.10 Internet advertising share, active internet users, and broadband penetration: 2005-2011

Internet advertising share Internet users Broadband Penetration 45 90

76 71 74

30 68 60 (%) up 58 52

(millions) 41 15 30 30 24 26 20 16 - take Household 12 Active digital media universe universe media digital Active

Share of total advertising (%) / / (%) of advertising total Share 8 0 0 2005 2006 2007 2008 2009 2010 2011 Source: Internet Advertising Bureau, Nielsen Work and Home Panel, Ofcom Note: Broadband household take-up figures are from Q1 of each year (2006-2012).

11 Figure 4.11 Internet advertising, by type: 2008 - 2011

Year on Year Growth £ millions 6% 16% 17%** 6000 4,784 4,097 2011 785 Growth 4000 3,541 3,350 751 Other 89% 667 715 Classified 5%* 2,767 Search 2000 2,346 18%* 2,148 1,987 Display 13%*

1,128 637 709 945 0 2008 2009 2010 2011

Source: IAB/ PwC Adspend 2008-2011 Note: *Like for like growth of the total market **Like for like 2011 growth was 14%

12 Figure 4.12 Video display advertising revenue and time spend on film/video sites: 2008 - 2011 Video Advertising Revenue Time per person on movie/video sites 02:00:00 120

) 01:30:00 90

01:00:00 60 hh:mm:ss 109 Time ( 00:30:00 54 30 £ Revenue millions 28 12 00:00:00 0 2008 2009 2010 2011 2012 Source: Internet Advertising Bureau, Nielsen Work and Home Panel inc. applications. Note: Time accounts for total time on sites of this category and not time spent viewing video content. Movie/video sites is a collection of more than 400 sites including YouTube, BBC iPlayer, Dailymotion, LOVEFiLM.com, Channel 4oD, ITV Player, Yahoo! Movies, blinkbox, Sky Go, Netflix, and Vimeo.

13 Figure 4.13 Demographic profile of video advertisement viewers

100% 19% 13% 80% 46% 44% 20% 17% 55+ 60% 19% 15% 45-54 40% 21% 20% 35-44 54% 56% 20% 25-34 26% 23% 15-24 0% Females Unique Views Percent of Total Unique Views Percent of Total Time Spent Time Spent Males

Gender Age Source: comScore Video Metrix Note: Percent of Total Time Spent: % of Time Spent Watching Ad Videos by Demographic Segment / % of Total Internet Population from the Demo Segment x 100. Percent of Total Time Spent does not sum to 100% since not all ages groups are shown. 14 Figure 4.14 Mobile advertising revenues, and smartphone and mobile internet take- up

Mobile Advertising Revenues Internet on mobile phone take-up Smartphone take-up 250 50 39 200 40

203 (%) up

32 - 150 26 27 30 20 21 100 20 83 50 10 UK take adult UK Revenue (£ Revenue millions) 29 38 0 0 2008 2009 2010 2011

Source: Mobile Advertising Revenues: IAB/PWC, Ofcom: take-up of internet on mobile phone and of smartphones Note: Take-up figures are from Q1 of the following year.

15 Figure 4.15 Search and display share of mobile advertising revenues: 2008 - 2011

100%

80% 34 34 50 46 Display 60%

40% 66 66 Search Revenue Revenue (%) 50 54 20%

0% 2008 2009 2010 2011 Source: IAB/PWC .

16 Figure 4.16 Mobile display advertising revenues, by type and location: 2008 - 2011

100% 6 Browser Ads 9 11 80% 46 App Ads 60% Video 40% 84 86 Tenancies

Revenue (%) Revenue 54 20% SMS, MMS, and 0% other Banners and text 2010 2011 2011 links Location

Source: IAB/PWC .

17 4.2 Internet and devices Figure 4.17 Household PC and internet take-up, 2005-2012

Proportion of adults (%)

100 Internet 80 76 80 71 72 74 7777 79 PC / laptop 68 67 73 75 74 76 68 71 72 64 67 67 Total 60 60 65 65 60 58 broadband 52 42 Fixed 40 41 38 39 broadband 31 32 27 30 Mobile data 21 user 20 20 17 12 15 13 Internet on mobile 0 Mobile 2005 Q1 2006 Q1 2007 Q1 2008 Q1 2009 Q1 2010 Q1 2011 Q1 2012 Q1 broadband

QE1: Does your household have a PC or laptop computer? / QE2: Do you or does anyone in your household have access to the Internet/Worldwide Web at HOME (via any device, e.g. PC, mobile phone etc)? / QE6: Which of these methods does your household use to connect to the Internet at home? Source: Ofcom technology tracker, Q1 2012 Base: All adults aged 16+ (n=3772) Note 1: “Internet on mobile” is the % of adults who use a mobile phone for any of the following activities: Instant messaging, Downloading Apps or programs, Email, Internet access, downloading video, video streaming, visiting social networking sites. Note 2: From,Q1 2009 the ‘Internet’ figure includes those who access the internet on mobile phones.

19 Figure 4.18

Use of wireless router versus broadband take-up, 2007 - 2012

Wireless router take-up Fixed broadband take-up 100% 72 80% 65 65 67 61 80% 57 Currently use 52 53 60% wireless router* 60% 40% 85 40% 75 Fixed 66 broadband 57 52 44 20% penetration** 20% 34 41

0% 0% Q1 2007 Q3 2007 Q1 2008 Q3 2008 Q1 2009 Q1 2010 Q1 2011 Q1 2012 Source: Ofcom research, Quarter 1 2012 Base: Wireless router take-up - adults aged 16+ with a broadband connection at home (* from 2009 this is based on fixed broadband connections only). Fixed broadband penetration based on all adults aged 16+ (** prior to 2009 this is total broadband penetration). 20 Figure 4.19

Ownership of internet-enabled devices

80 61 60 52 44 41 39 40 32

20 14 11 7 5

Household penetration penetration (%) Household 0 Laptop Games Desktop Internet Smartphone Portable E-reader* Tablet Netbook Smart TV console PC enabled games STB console Source: Ofcom research, Quarter 1 2012 Base: Adults aged 16+ n = 2258 Note: IP-enabled devices include laptop, games console, desktop PC, smartphone, portable games console, internet enabled STB (Sky+, Sky+ HD, V+ and V+ HD set top boxes), e-reader, tablet, netbook, and smart TV. *E-reader take-up stated here is household while elsewhere in the report we state figures by individual take-up.

21 Figure 4.20

The proportion of each social group owning internet-enabled devices

Proportion of social group (%) AB C1 C2 DE 80 75 67 58 60 5557 56 51 49 52 44 46 46 39 37 3636 34 34 40 30 33 31 32 26 23 20 16 19 20 12 12 11 8 1010 8 9 8 7 6 4 5 3 5 5 4 0 Laptop Games PC Smart- Portable Sky+ E-reader Tablet V+ Netbook Smart TV Console phone Games Console

Source: Ofcom research, Quarter 1 2012 Base: Adults aged 16+, AB n = 822,, C1 n= 1085, C2 n=765, DE n=1098

22 Figure 4.21

Internet-enabled devices, by social group

Proportion of device owners (%) ABC1 C2DE 100% 24 26 28 80% 35 35 36 37 39 41 42 44 60%

40% 76 74 72 65 65 64 63 61 59 58 56 20% 0% Tablet E-reader Netbook PC Smart- Smart Laptop Sky+ V+ Portable Games phone TV Games Console Console

Source: Ofcom research, Quarter 1 2012 Base: Adults aged 16+

23 Figure 4.22 Devices used to visit internet websites in 2011, by age

All aged 16+ 16-24 25-34 35-44 45-54 55-64 65+ 100% 91% 88%89% 84%84%85% 81% 78% 80% 76% 72% 69% 70% 68% 67%

59% 60%

45% 39% 40% 30% 29% 26% 20% 18% 16% 20% 14% 11% 12% 11% 10% 9% 10% 7% 8% 8% 5% 6%6% 5% 4% 3% 1% 1% 1% 0% ANY OF THESE PC or laptop at Mobile phone Games console/ Portable media Tablet computer home player player IN1/ IN2- Do you or does anyone in your household have access to the internet at home through a computer, laptop or notebook? And do you personally use the internet at home?/ Do you have and use any of the items shown on this card to access the internet or to visit internet websites? (Prompted responses, single coded) Base: All adults aged 16+ (1823 aged 16+, 225 aged 16-24, 252 aged 25-34, 294 aged 35-44, 228 aged 45-54, 281 aged 55-64, 543 aged 65+). Significance testing shows any difference between any age group and all adults aged 16+ 24 Source: Ofcom research fieldwork carried out by Saville Rossiter Base in September to October 2011 Figure 4.23

Number of different internet-enabled devices per household

Own at least n no. of devices 100 85 72 56 40 27 15 7 3 1.1 0.1 20 100 Own n no. of devices 16 15 15 Own at least n no. of devices 15 14 14 75 12

10 8 50

5 4 25 2 1 0.1

Proportion of of Proportion households(%) 0 0 None One Two Three Four Five Six Seven Eight Nine Ten (%) of households Proportion n number of different devices Source: Ofcom research, Quarter 1 2012 Base: Adults aged 16+ n = 2258 Note: IP-enabled devices include laptop, games console, desktop PC, smartphone, portable games console, internet enabled STB (Sky+, Sky+ HD, V+ and V+ HD set top boxes), e-reader, tablet, netbook, and smart TV. 25 Figure 4.24

Device ownership, by number of different internet-enabled devices in household 100% Laptop Smartphone 80% Games console Desktop PC 60% Portable games console Internet enabled STB 40% own device own E-reader 20% Tablet Netbooks Proportion of of Proportion that households 0% Smart TV 1 2 3 4 5 6 7 Number of different internet-enabled devices in household Source: Ofcom research, Quarter 1 2012 Base: Adults aged 16+ that own at least one IP enabled device n = 1927 (one device, n=307; two devices, n=348; three devices, n=364; four devices n=309; five devices n=263; six devices n=187, seven devices n=86) Note: IP-enabled devices include laptop, games console, desktop PC, smartphone, portable games console, IP enabled STB (Sky+, Sky+ HD, V+ and V+ HD set top boxes), e-reader, tablet, netbook, and smart TV. 26 Figure 4.25

Home internet access, by age, socio-economic group and gender

Home internet access (%) 100 2010 2011 2012 90 90 899192 85 8688 878788 86 84 8283 81 7780 7778 7778 78 80 75 7375 73 7376 69 64 63 55 5757 60 51

40 27 2326 20

0 UK 16-24 25-34 35-54 55-64 65-74 75+ AB C1 C2 DE Male Female Age Socio-economic group Gender QE2: Do you or does anyone in your household have access to the internet/ Worldwide Web at home? Source: Ofcom technology tracker, Q1 2012. Base: All adults 16+ (n = 3772 UK, 483 16-24, 608 25-34, 1295 35-54, 596 55-64, 447 65-74, 341 75+, 822 AB, 1085 C1, 765 C2, 1098 DE, 1804 male, 1968 female) 27 Figure 4.26 Laptop and desktop computer online audience vs. broadband take- up: 2004 – 2011

YoY Growth -1.7% 9.1% NA* 8.4% 10.3% 6.7% 2.8% 1.6% 50 100 38.0 39.0 39.7 40 35.6 80 29.8 32.2 30 24.5 24.1 26.3 60 20 40

(millions) 10 20

0 0 11 11 11 Active digital media universe universe media digital Active 04 05 06 07 08 09 10 12 04 05 06 07 08 09 10 04 05 06 07 08 09 10 Proportion of of Proportion (%) households ------Jan Jan Jan Jan Jan Jan Jan Jan Jan Sep Sep Sep Sep Sep Sep Sep Sep May May May May May May May May

Online Audience Total Broadband Take-up

Source: Nielsen UKOM, internet users aged 2+, home and work panels, applications included. Ofcom technology tracker, Q1 2012. Base: Total broadband penetration - all adults aged 16+ (n=3772) Note: The online audience is an individual aged 2+ that has used an internet enabled home or non shared work computer to go 28 online at least once in the month. * Due to a change in methodology figures prior to October 2006 should be treated with caution. Figure 4.27 Active internet users and time online on a laptop or desktop computer: 2004 – 2011 Year 2004 2005 2006 2007 2008 2009 2010 2011 Average 11.1 12.5 NA* 17.6 18.7 23.9 23.0 23.5 (hrs) 50 Jan 2012 30 24.6 40 24 Nov 2009 30 28.7 18 20 12

(millions) Jan 2004 10 6

11.9 (hours) online Time 0 0 Active digital media universe universe media digital Active 11 11 11 04 05 06 07 08 09 10 12 04 05 06 07 08 09 10 04 05 06 07 08 09 10 ------Jan Jan Jan Jan Jan Jan Jan Jan Jan Sep Sep Sep Sep Sep Sep Sep Sep May May May May May May May May

Online Audience Online Time Per Person Source: Nielsen UKOM, internet users aged 2+, home and work panels, applications included. Ofcom technology tracker, Q1 2012. Base: Total broadband penetration - all adults aged 16+ (n=3772) Note: The online audience is an individual aged 2+ that has used an internet enabled home or non shared work computer to go online at least once in the month. Online time per person is the average time spent using a web browser or internet enabled application across the online audience. * Due to a change in methodology figures prior to October 2006 should be treated with caution. 29 Figure 4.28

Average time spent on the internet on a laptop or desktop, by age and gender

Average monthly hours online per internet user Male Female 40 34.1 33.8 27.5 30 26.3 25.6 24.2 23.7 24.3 21.8 20.5 20 15.8 14.5

10 4.5 4.2

0 2 - 11 12-17 18 - 24 25 - 34 35 - 49 50 - 64 65+

Source: UKOM/Nielsen, March 2012, Home and Work Panel, applications included

30 Figure 4.29

Time spent online on a laptop or desktop computer, by region

Time per person (hrs) 30 26.0 25.9 25.5 24.2 23.9 23.7 23.5 23.5 22.3 21.4 21.2 21.1 20.0 20

10

0

Source: UKOM/Nielsen, home and work panel, applications included. Month of March 2012. Regions based on ISBA regions. Internet users aged 2+

31 Figure 4.30 Online audience and domains visited per person on laptop and desktop computers: 2004 - 2011

50 Jan 2012 100 Jan 2004 82 40 71 80 Nov 2010 30 98 60 20 40 (millions) 10 20

0 0 Active digital media universe universe media digital Active Sessions/Domains per person Sessions/Domains 11 11 11 04 05 06 07 08 09 10 12 04 05 06 07 08 09 10 04 05 06 07 08 09 10 ------Jan Jan Jan Jan Jan Jan Jan Jan Jan Sep Sep Sep Sep Sep Sep Sep Sep May May May May May May May May

Online Audience Domains Visited per Person

Source: Nielsen UKOM, internet users aged 2+, home and work panels, applications included. Ofcom technology tracker, Q1 2012. Note: The online audience is an individual aged 2+ that has used an internet enabled home or non shared work computer to go online at least once in the month. Due to a change in methodology figures prior to October 2006 should be treated with caution.

32 Figure 4.31 Internet take up and intentions: 2008 - 2011 Average monthly hours online per internet user 100% 15 Don't intend 21 22 17 17 2 to get 80% 4 3 4 3 5 4 8 5 6 Don't know if 60% will get

Likely to get 40% 79 70 73 76 in next 12 65 months 20% Internet connection at home 0% 2008 2009 2010 2011 2012

QE2/ QE24 – Do you or does anyone in your household have access to the internet / world wide web at home (via any device)?/ How likely are you to get internet access at home in the next 12 months? Base: All adults aged 16+ (5812 aged 16+ in 2008, 6090 aged 16+ in 2009, 9013 aged 16+ in 2010, 3474 aged 16+ in 2011, 3772 aged 16+ in 2012, 483 aged 16-24, 608 aged 25-34, 713 aged 35-44, 582 aged 45-54, 596 aged 55-64, 447 aged 65-74, 341 aged 75+, 822 AB, 1085 C1, 765 C2, 1098 DE), 1804 male, 1968 female). Source: Ofcom research, fieldwork carried out by Saville Rossiter-Base in January to February 2012 Figure 4.32 Internet take-up and intentions, by demographic group

Internet connection at home Likely to get in next 12 months Don't know if will get Don't intend to get

16-24 88 6 2 4 25-34 88 6 2 4 35-44 90 3 2 6 45-54 84 4 10 55-64 75 2 2 20 65-74 64 2 33 75+ 27 2 5 66 AB 92 1 6 C1 85 4 1 10 C2 76 4 3 16 DE 61 6 3 30 Male 81 3 2 14 Female 77 4 2 17 QE2/ QE24 – Do you or does anyone in your household have access to the internet / world wide web at home (via any device)?/ How likely are you to get internet access at home in the next 12 months? Base: All adults aged 16+ (5812 aged 16+ in 2008, 6090 aged 16+ in 2009, 9013 aged 16+ in 2010, 3474 aged 16+ in 2011, 3772 aged 16+ in 2012, 483 aged 16-24, 608 aged 25-34, 713 aged 35-44, 582 aged 45-54, 596 aged 55-64, 447 aged 65-74, 341 aged 75+, 822 AB, 1085 C1, 765 C2, 1098 DE), 1804 male, 1968 female). Source: Ofcom research, fieldwork carried out by Saville Rossiter-Base in January to February 2012 2005, 2009,2007, 2010 and 2011 Stated reasons for not intending getto home internet access inthe next 12 months: Base: Base: coded) single responses, at (Unprompted access home? internet for not reason getting your main Significance testing between any testing change shows Significance than one than – IN18 IN17/ Figure 4.33 Figure internet, wouldn’t internet, 82 interested in the the in interested

2005 82 aged 16+ 16+ agedwho do adults not to intend All get at access internet (930 in home 743 2005, in 2007, 410 in 478 in 2009, Interest (e.g. Not use it) use 66% - Rossiter by Saville out carried fieldwork Ofcom : research, Source reason.

2007 72 Can you tell me what your reasons are for not getting internet access at home? (Unprompted responses, multi responses, at (Unprompted access home? internet are for not getting yourme reasons youwhat tell Can

2009 78

2010 78 2011 (e.g. I can’t affordcan’t a I (e.g. computer, it’stoo 18

2005 expensive) 21 Cost 16%

2007 31

2009 35

2010 30 2011 2010 NA (e.g. I don’t have have don’t I (e.g. Ownership/ availability 2005 a computer) NA and 2007 7% 2011. 2011. 23

2009 Reason 2011Main 26

Percentages may add to more than 100% as respondents can nominate more more nominate can as respondents 100% than to more add may Percentages 2010 20 2011 (e.g. Don’t know Don’t (e.g. 7 Knowledge 2005 a use how to computer) 15 2007 4% Base in in Base 11 2009 17 2010 14 September September 2011 about security/ ID ID security/ about (e.g. Worried(e.g. 2 2005 Concerns to October October to 2 2007 theft) 4% 2009 6 6

2011 2010 2011 8 2010, 328 in 2011). 2011). in 328 2010, (e.g. Can the use (e.g. - internet at work/ work/ at internet )/ And And )/ coded 2 elsewhere

2005 elsewhere) Access 2007 1 1% 2009 2 what is is what 2010 2 35 2011 1 Figure 4.34 Interest in internet functions among non-users: 2009 - 2011 Interested Not interested Don't know Use e-mail to contact friends and relatives 2009 18 78 4 2010 16 78 6 2011 14 79 7 Transfer photos from a digital 2009 camera or mobile phone to a 19 76 4 computer 2010 15 79 6 2011 12 80 8 Buy things over the internet 2009 16 79 4 2010 13 81 6 2011 13 81 6 Find out about local services such 2009 15 79 5 as cinemas and restaurants 2010 12 82 6 2011 12 81 7 Find out information from your 2009 13 81 6 local government or local council such as health services, recycling, 2010 10 83 7 local libraries 2011 12 81 8 Complete government processes 2009 11 83 6 online (e.g. register for tax credits, renew driving licence, car tax or 2010 8 85 7 passport, complete tax return) 2011 10 82 8 Look at information on hobbies or interests 2011 14 78 7 Watch online or download TV 2011 9 83 7 programmes or films (e.g. BBC iPlayer, 4OD, ITV player, Sky Player etc) IN10A-M –I’m going to read out some different types of tasks associated with the internet, PCs or laptops, and for each one please say which of the options on the card applies to you. (Prompted responses, single coded) Base: Adults aged 16+ who do not use the internet at home or elsewhere (542 in 2009, 628 in 2010, 454 in 2011) – significance testing shows any change between 2010 and 2011 Source: Ofcom research, fieldwork carried out by Saville Rossiter-Base in September to October 2011 36 4.3 Web-based content Figure 4.35 Claimed use of the internet for selected activities Increase Since Q1 2011 (%-age points)

Any 97 2 99 Sending and receiving email 79 10 89 General surfing/browsing 78 10 88 +/-0 Purchasing goods/services 41 33 74 +/-0 Banking 49 15 64 +2 Using social networking sites 55 9 64 +3 Finding/ downloading info for personal use 42 19 62 +2 TV/ Video viewing 35 22 57 +3 Finding/ downloading info for work 31 16 47 +2 Watching video clips/ webcasts 29 15 44 +2 Using local council/ Government websites 16 25 +3 41 Used in the past week Use less often Playing games 26 14 40 +1 Downloading music/films/video clips 21 19 40 +1 Find health information 14 25 39 +2 Finding/ downloading info for college 26 12 38 +3 Instant messaging 22 10 32 +2 Realtime gambling/auctions 10 11 21 -2 Listening to radio 12 8 20 +/-0 Uploading/ adding content to internet 10 9 19 +1 Streamed audio services 5 5 10 +2 +3 0% 20% 40% 60% 80% 100%

QE5. Which, if any, of these do you or members of your household use the internet for whilst at home? Source: Ofcom research, Quarter 1 2012 Base: Adults aged 16+ with a broadband connection at home (n= 2726 UK) 38 Figure 4.36 Time spent on selected activities on desktop and laptop computers

Total time (millions of hrs) Time per user (hrs) 210 7 Total time (millions of hrs) Time per user (hrs) 180 6 6.5

150 190.4 5

120 4 4.4 90 3

60 2 72.7 2.1 2.0 2.0 1.8 30 23.7 1 51.7 43.3 37.7 1.0 0.9 1.0 34.0 33.1 35.6 0 0 Member Online Email Videos/ Classifieds/ Instant General Search Mass Communities Games Films Auctions Messaging Interest Merchan Portals & -diser Communities Source: UKOM/Nielsen home and work panel, desktop and laptop computers only, applications included, month of March 2012

39 Figure 4.37 Leading sites in selected categories, by unique audience

Unique audience (m) 40

31.2 30 25.7 20.8 18.5 20 17.1 15.6

9.6 10.1 10 6.2 7.4 7.3 6.5 5.1 4.9 4.0

0 eBay Tesco Twitter iTunes Yahoo! Yahoo! Search Search Google Google Amazon LinkedIn YouTube Bing Web Bing Wikipedia Facebook MailOnline BBC NewsBBC BBC iPlayer

Source: UKOM/Nielsen home and work panel, desktop and laptop computers only, applications included, month of March 2012

40 Figure 4.38 Relative popularity of the top ten websites on desktop and laptop computers, by age group

Rank 2-17 18-24 25-34 35-49 50-64 65+

1 YouTube YouTube Microsoft eBay Amazon Amazon

2 Google MSN/Windows MSN/Windows BBC BBC Microsoft Live/Bing Live/Bing

3 Facebook Facebook Yahoo! Amazon Yahoo! BBC

4 BBC Wikipedia Facebook Wikipedia Microsoft Wikipedia

5 MSN/Windows Yahoo! YouTube Yahoo! eBay Yahoo! Live/Bing

6 Wikipedia Microsoft eBay MSN/Windows Google eBay Live/Bing

7 Yahoo! Google Google Google Wikipedia Google

8 eBay eBay Amazon Facebook Facebook Facebook

9 Microsoft BBC Wikipedia YouTube MSN/Windows YouTube Live/Bing

10 Amazon Amazon BBC Microsoft YouTube MSN/Windows Live/Bing Source: UKOM/Nielsen home and work panel, desktop and laptop computers only, applications included, month of March 2012 41 Figure 4.39 Most popular applications on desktop and laptop computers, by active reach

Active reach (%) Time per user (hrs) 35 3.5 30.8% Active reach (%) Time per user (hrs) 30 28.1% 3.0

25 23.4% 2.5

20 18.8% 2.0

15 1.5 9.3% 10 1.0 5.4% 5.1% 4.8% 4.8% 4.7% 4.4% 4.4% 4.0% 5 3.8% 2.8% 0.5

0 0.0 Skype Steam iTunes Picasa Spotify uTorrent Time Player Yahoo! Yahoo! VLC Media VLC Player Messenger Real Player Apple QuickApple Messenger Google Earth Photo Gallery Help Viewer Windows Live Windows Live Microsoft Office Office Microsoft Windows Media

Source: UKOM/Nielsen home and work panel, desktop and laptop computers only, month of March 2012

42 Figure 4.40 Most popular search, email and reference services offered by Google, Microsoft and Yahoo! Unique audience (m) Page views per visitor 35 350 31.2 Unique audience Page views per visitor 30 300

25 250

20 17.1 200

15 12.5 12.2 150 9.9 8.5 8.1 10 6.8 100 5.9 5.7 5.1 4.9 5 50

0 0 Mail Maps Gmail Yahoo! Yahoo! Yahoo! Yahoo! Search Search Google Google Google Google Google Google Yahoo! Yahoo! MSN Account Answers Yahoo! Yahoo! Bing Web Bing Search Hotmail Homepage Homepage Windows Live Live Windows Google Image Image Google Source: UKOM/Nielsen home and work panel, desktop and laptop computers only, applications included, month of March 2012

43 Figure 4.41 Unique audiences of selected search engines on desktop and laptop computers: March 2011 to March 2012

Unique Audience (m) 40

Total Search 30 Google Search

Google Image 20 Search Yahoo! Search

10 Bing Web

0 Mar-11 May-11 Jul-11 Sep-11 Nov-11 Jan-12 Mar-12

Source: UKOM/Nielsen home and work panel, desktop and laptop computers only, March 2011 to March 2012

44 Figure 4.42 Web browsers’ shares of total page views on desktop and laptop computers

0.9% 0.8%

11.6% Windows Internet Explorer Google Chrome 38.9% Mozilla Firefox 19.8% Apple Safari

Opera

Other 28.0%

Source: StatCounter, month of March 2012

45 Figure 4.43 Web browsers’ shares of total page views on mobile devices

0.8% 3.0% 3.4%

Apple Safari

BlackBerry 20.7% 42.4% Android

Opera

Windows Internet Explorer Mobile 29.7% Other

Source: StatCounter, month of March 2012

46 Figure 4.44 Proportion of adults who access social networking sites on the internet at home: Q1 2009 to Q1 2012

Q1 2009 Q1 2010 Q1 2011 Q1 2012 80% 78 69 64 64 61 61 60

60% 57 57 54 53 52 52 50 50 48 48 48 47 46 46 46 46 46 45 42 40 39 39 39 36

40% 35 35 33 31 31 30 30 29 28 28 20 19

20% 16 13 12 7 5 3 3 3 1 0% UK 15-24 25-34 35-54 55-64 65-74 75+ AB C1 C2 DE Male Female QE12: Which, if any, of these do you or members of your household use the internet for while at home? Source: Ofcom technology tracker, Q1 2012 Base: All adults aged 16+ (n = 5812 Q1 2008, 1581 Q3 2008, 6090 Q1 2009, 9013 Q1 2010, 3474 Q1 2011, 3772 Q1 2012)

47 Figure 4.45 Unique audiences of selected social networking sites on desktop and laptop computers: March 2011 to March 2012

Unique audience (m) 30 25 Facebook

20 Twitter

15 LinkedIn 10 Myspace 5 Friends 0 Reunited Mar-11 May-11 Jul-11 Sep-11 Nov-11 Jan-12 Mar-12

Source: UKOM/Nielsen home and work panel, desktop and laptop computers only, March 2011 to March 2012

48 Figure 4.46 Time spent, per visitor per month, on selected social networking sites, on desktop and laptop computers: March 2011 to March 2012

Time per visitor (hrs) 8 7 Facebook 6 Twitter 5 LinkedIn 4 Myspace 3 Friends Reunited 2 Google+ 1 0 Mar-11 May-11 Jul-11 Sep-11 Nov-11 Jan-12 Mar-12

Source: UKOM/Nielsen home and work panel, desktop and laptop computers only, March 2011 to March 2012

49 Figure 4.47 Overlapping and unduplicated audiences of selected social networking sites on desktop and laptop computers

Proportion of unique audience (%) 100% 25.7m 5.8m 3.4m 2.3m 0.5m

80%

60%

On Facebook 40% Off Facebook

20% 0.6m 0.2m 0.1m 0% 0.4m Facebook Twitter LinkedIn Google+ Friends Reunited

Source: UKOM/Nielsen home and work panel, desktop and laptop computers only, month of March 2012

50 Figure 4.48 Selected sites ranked by proportion of referred traffic generated through referrals from Facebook

Proportion of referrals from Facebook (%) 25% 23.7%

20%

15% 11.2% 10% 6.7% 5% 3.8% 3.6% 3.3%

0% YouTube BBC eBay Twitter Wikipedia Amazon

Source: UKOM/Nielsen home and work panel, desktop and laptop computers only, month of March 2012

51 Figure 4.49 Unique audiences of selected video-sharing sites on desktop and laptop computers: March 2011 to March 2012

Unique audience (m) 30 Total Videos / Movies YouTube 25 Google Video 20 MSN Video

15 Dailymotion

10 Bing Videos

Metacafe 5 Vimeo 0 Mar-11 May-11 Jul-11 Sep-11 Nov-11 Jan-12 Mar-12 Yahoo! Video

Source: UKOM/Nielsen home and work panel, desktop and laptop computers only, March 2011 to March 2012

52 Figure 4.50 Time spent, per visitor per month, on selected video-sharing sites, on desktop and laptop computers: March 2011 to March 2012

Time per visitor (hrs) 2.00 Total Videos / Movies YouTube

1.50 Dailymotion

Bing Videos

1.00 Metacafe

MSN Video

0.50 Yahoo! Video

Google Video 0.00 Vimeo Mar-11 May-11 Jul-11 Sep-11 Nov-11 Jan-12 Mar-12

Source: UKOM/Nielsen home and work panel, desktop and laptop computers only, March 2011 to March 2012

53 Figure 4.51 Top platforms for video content, by number of videos watched

Number of videos watched (m) 10000 3,660

1000 177 107 100 76 45 44 37 34 18 15 10

1 YouTube VEVO Perform BBC Facebook Viacom Microsoft Yahoo! Amazon Vimeo Sports Sites Digital Sites Sites Sites

Source: ComScore Video Metrix, month of January 2012

54 Figure 4.52 Total time spent watching videos online, split by gender and age

Gender Age

14.7% 24.3% 25.0% 15-24 25-34 Male 35-44 16.0% Female 55+ 74.7%

26.0%

Source: ComScore Video Metrix, month of January 2012

55 Figure 4.53 UK retail sales, split by e-commerce and high street: February 2010, February 2011 and February 2012

Retail sales (£billions) High Street E-Commerce 30

£2.6bn £1.8bn £2.0bn 20

10 £21.1bn £21.9bn £22.0bn

0 February 2010 February 2011 February 2012

Source: Office of National Statistics, Retail Sales Statistical Bulletin, February 2010, February 2011 and February 2012

56 Figure 4.54 Unique audiences of leading shopping sites on desktop and laptop computers: March 2010 to March 2012

Unique audience (m) 25 Amazon 20 eBay

15 Tesco Argos 10 ASDA 5 Marks & Spencer

0 Groupon Mar-10 Jul-10 Nov-10 Mar-11 Jul-11 Nov-11 Mar-12

Source: UKOM/Nielsen home and work panel, desktop and laptop computers only, applications included, March 2011 to March 2012

57 Figure 4.55 Most popular coupons and rewards sites on desktop and laptop computers, by active reach: March 2011 and March 2012

Active reach (%) Mar-11 Mar-12 20 18.7

15 10.3 9.4 10 5.8 5 3.93.6 3.5 3.1 2.9 2.1 2.92.8 3.02.7 2.22.7 2.52.7 2.6 1.1 0 Groupon Nectar Voucher HotUK Living KGB Deals Tesco TopCash Quidco Web Codes.co.uk Deals Social Clubcard Back loyalty.com

Source: UKOM/Nielsen home and work panel, desktop and laptop computers only, applications included, month of March 2012

58 Figure 4.56 Most popular news sites on desktop and laptop computers in the UK

Unique audience (m) 12 10.1

8 6.5 5.1 4.8 4.2 4 2.7 2.6 2.5 2.1 1.9 1.5 1.4

0 News Google Post Online The Online The Sun Guardian Network Telegraph Telegraph Sky News Huffington MailOnline BBC News Websites MSN News Newsquest Independent Media Group Yahoo! News News Yahoo!

Source: UKOM/Nielsen home and work panel, desktop and laptop computers only, applications included, month of March 2012

59 Figure 4.57 Number of stories from selected news sites shared on Facebook and Twitter

Links to stories (000s) 1,400 1,227 Facebook Twitter 1,200 282 1,000 945 800 658 600 298 493 400 360 281 360 78 200 203 46 38 14 0 133 BBC News Guardian MailOnline Telegraph Independent Sky News Financial Online Online Times

Source: Rippla, month of March 2012

60 Figure 4.58 Year-on-year changes in headline circulation of print versions and unique audiences of online versions of selected newspapers: March 2011 and March 2012

2011-2012 change (%) +18.2% Print Online 20 +6.3% +6.7% +3.8% 0.0% 0 -4.3% -8.0% -7.2% -11.7% -12.5% -20 -16.8% -16.3%

-40 -44.7% -60 -53.3% Mail Guardian Telegraph Sun Independent Times Financial Times Source (1): Audit Bureau of Circulations, March 2011 and March 2012 Source (2): UKOM/Nielsen home and work panel, desktop and laptop computers only, March 2011 to March 2012

61 Figure 4.59 Overlapping audiences of selected news sites on desktop and laptop computers

BBC News Mail Guardian Telegraph Sun Independent Times 10.1m 6.5m 5.1m 4.8m 2.7m 2.1m 0.7m

Overlap with BBC News 56.5% 63.0% 60.9% 55.3% 64.2% 63.7%

Overlap with Mail 36.3% 47.7% 52.3% 54.6% 53.9% 53.6%

Overlap with Guardian 32.1% 37.7% 48.5% 39.1% 58.7% 55.6%

Overlap with Telegraph 28.7% 38.4% 45.0% 37.8% 52.6% 54.7%

Overlap with Sun 14.9% 22.9% 20.7% 21.6% 24.5% 29.2%

Overlap with Independent 13.3% 17.4% 23.9% 23.1% 18.8% 34.2%

Overlap with Ti mes 4.6% 6.0% 7.8% 8.3% 7.8% 11.8%

█ 0-15% █ 16-30% █ 31-45% █ 46-60% █ 60-75% Source: UKOM/Nielsen home and work panel, desktop and laptop computers only, month of March 2012

62 Industry metrics and summary

0 Figure 5.1 UK telecoms industry key statistics

2006 2007 2008 2009 2010 2011

Total operator-reported revenue (£bn) 40.7 42.0 42.5 41.2 40.5 39.7 Operator-reported retail revenue (£bn) 30.6 31.7 32.0 31.1 30.9 31.0 Operator-reported wholesale revenue (£bn) 10.1 10.3 10.4 10.1 9.6 8.8 Average monthly household telecoms spend (£ 2011 prices) 78.46 76.00 73.04 70.81 68.06 65.04

Fixed access and call revenues (£bn) 10.5 10.4 10.2 9.7 9.4 8.9 Fixed voice call minutes (billions) 154 149 141 132 129 116 BT share of fixed call minutes (%) 47.1 46.6 43.8 40.1 36.5 35.9 Fixed lines (millions) 34.5 34.5 34.2 33.5 33.4 33.2

Fixed internet revenues (£bn) 3.2 3.2 3.2 3.3 3.2 3.4 Fixed internet connections per 100 population 28.0 29.3 29.5 30.3 32.1 33.2 Fixed broadband connections per 100 population 21.3 24.9 27.4 28.7 30.6 32.5 Proportion of premises connected to an unbundled exchange 66.6 80.2 84.2 84.5 89.0 91.9 (%)

Mobile retail revenues (£bn) 13.9 15.0 15.5 14.9 14.9 15.1 MobileSource: voice Ofcom call /minutes operators (billions) 88 105 115 121 125 124 1

Key market developments in telecoms

2 Fibre-to-the-cabinet rollout and take-up of superfast services start to gain momentum

3 Figure 5.2

Estimated household availability of BT’s fibre-to-the-cabinet network

Proportion of homes (per cent)

30

20 30 31 27 28 29 23 24 24 10 19 20 16 17 18 13 13 15

0 11 11 11 11 11 11 11 11 11 11 11 11 12 10 12 12 ------Jul Apr Oct Jan Jun Jan Mar Feb Nov Dec Aug Sep Mar Feb Dec May

Source: Ofcom / BT Note: Includes estimates where Ofcom does not receive data from operators

4 Figure 5.3

Estimated household availability of superfast broadband services

Proportion of homes (per cent)

60

40

56 57 57 58 59 60 51 51 52 53 53 53 54 54 55 55 20

0 11 11 11 11 11 11 11 11 11 11 11 11 12 10 12 12 ------Jul Apr Oct Jan Jun Jan Mar Feb Nov Dec Aug Sep Mar Feb Dec May

Source: Ofcom / operators Note: Includes estimates where Ofcom does not receive data from operators

5 Figure 5.4

Estimated household availability of superfast services, by technology

Proportion of homes (per cent) 60 57 57 58 59 60 54 54 55 55 56 51 51 52 53 53 53 14 14 15 FTTC- 8 8 9 9 9 10 11 11 12 13 6 6 7 only 7 40 7 7 8 9 9 10 11 12 13 13 14 15 15 16 16 FTTC and cable 20 39 38 37 37 36 35 35 34 32 32 32 30 30 29 29 28 Cable- only 0 11 11 11 11 11 11 11 11 11 11 11 11 12 10 12 12 ------Jul Apr Oct Jan Jun Jan Mar Feb Nov Dec Aug Sep Mar Feb Dec May

Source: Ofcom / operators Note: Includes estimates where Ofcom does not receive data from operators

6 Figure 5.5 Comparison of major ISPs’ superfast and current generation broadband services

BT Virgin Media TalkTalk Sky Plusnet

Headline download 38Mbit/s FTTC 30Mbit/s cable 40Mbit/s FTTC FTTC 38Mbit/s FTTC speed / technology Average actual speed, 36.0Mbit/s 31.0Mbit/s - - - November 2011 40GB plus 40GB plus Data allowance Unlimited 40GB Unlimited unlimited WiFi unlimited off-peak service Virgin Media plus Plusnet plus fixed Call allowance Fixed off-peak Fixed off-peak Fixed off-peak fixed weekend off-peak £14.50 plus line £16.50 plus line £16.49 plus line

Lowest cost superfast Monthly cost £18 plus line rental £20 plus line rental rental rental rental Technology / headline ADSL2+/ 16Mbit/s n/a ADSL2+/ 14Mbit/s ADSL2+ ADSL2+/ 16Mbit/s download speed Average actual speed, 8.7Mbit/s n/a 8.0Mbit/s 7.5Mbit/s 8.3Mbit/s November 2011 10GB plus 10GB plus Data allowance n/a 40GB Unlimited unlimited WiFi unlimited off-peak Plusnet plus fixed Call allowance Fixed anytime n/a Fixed off-peak Fixed off-peak off-peak generation service

Lowest cost current £6.50 plus line £6.49 plus line Monthly cost £13 plus line rental n/a £10 plus line rental rental rental Additional monthly superfast £5 n/a £10 £10 £10 cost

Source: Ofcom / Pure Pricing UK Broadband Pricing Briefing, March 2012

7 Figure 5.6

Take-up of superfast broadband services

Superfast connections (millions) Superfast as a % of all connections 2.0 8 6.6 Superfast 1.5 5.5 6 connections 4.3 (left axis) 1.0 4 2.9 Superfast 2.1 1.4 as % of all 1.1 connections 0.5 1.2 2 0.9 (right axis) 0.6 0.4 0.2 0.0 0 Q4 2010 Q1 2011 Q2 Q3 Q4 Q1 2012

Source: Ofcom / operators Note: Includes estimates where Ofcom does not receive data from operators

8 New devices shape an explosion in mobile data use

9 Figure 5.7

Number of mobile broadband connections, 3G-enabled tablets and users accessing the internet on their mobile device

million 40 32.6 30 Mobile broadband 22.7 20 14.5 Smartphone data 8.9 8.4 users 10 4.8 5.1 2.6 4.1 3G-enabled tablets 0 0.2 1.2 2007 2008 2009 2010 2011

Source: Ofcom data based on submissions by operators and Ofcom market research. Consumers accessing the internet on their mobile phone and 3G-enabled tablets are estimates based on these data. Mobile broadband figures are for December of the stated year and the other two categories are for the first quarter of the following year. 10 Figure 5.8

Reasons for choosing pre-pay mobile broadband

% of consumers mentioning each criteria 100%

80% 64% 60%

39% 40%

20% 19% 20% 8% 1% 0% Other commit contract usage of usage of know Don't Dislike Dislike Unsure Low ment Low

Source: YouGov Dongle Track

11 Figure 5.9

Take-up of mobile broadband by socio-economic group, age and housing type of respondent Figure above chart % take-up -4 -7 -6 -5 -2 +/-0 +/-0 -5 -4 -1 -5 -3 -9 -5 shows % point 30 change in overall take-up from Q1 2011 25

20 Mobile broadband 9 8 15 only 3 4 4 3 10 10 5 3 7 6 Fixed and 12 12 12 mobile 5 3 10 8 9 9 9 broadband 6 4 1 4 5 2 0 1

Age Socio-economic Housing Source: Ofcom research, Q1 2012 group Base: All adults aged 16+ (n=3772)

12 Figure 5.10

Smartphone data use

Monthly data use (MB)

600 75% use more than

400 50% use more than 25% use 200 more than 10% use more than 0 2011 2011 2011 2011 2011 2011 2011 2011 2011 2011 2011 2011 2010 2010 2010 2010 2010 2010 2012 2012 ------Jul Jul Oct Apr Jan Jun Oct Jan Feb Mar Nov Dec Aug Sep Feb Nov Dec Aug Sep May

Source: BillMonitor

13 Figure 5.11

Smartphone data caps

Percentage of respondents using each range of allowance

Less than 500MB 500-750MB 21% 17% 750MB-1GB 1-2GB 24% 19% 2-5GB 5GB or more 9% 6% 1% Unlimited 2% Don't know

Source: YouGov SMIX

14 Figure 5.12

Use of smartphone WiFi connection relative to cellular connection

% of respondents in Sep 2011 % of respondents in Dec 2011 Only WiFi 2% 3% 3% 5% 4% Only WiFi 2% Mostly WiFi Mostly WiFi

WiFi and mobile equally 25% WiFi and mobile equally 36% 23% 39% Mostly mobile Mostly mobile

31% Only mobile 28% Only mobile

Don't know Don't know

Source: YouGov SMIX

15 Figure 5.13

Location of Wi-Fi use on a smartphone

% of consumers mentioning each location 100% 90%

80% 67% 63% 60% 46% 43% 40%

20%

0% On the the On places and Out At home At At workAt Public Public move about

Source: YouGov SMIX

16 After fixed-to-mobile substitution are we seeing voice-to- data substitution?

17 Figure 5.14

Fixed and mobile share of total originating voice call volumes

Per cent

100

80 36.4 41.2 45.0 47.8 49.2 51.6 Mobile voice 60

40 63.6 Fixed voice 58.8 55.0 52.2 50.8 20 48.4

0 2006 2007 2008 2009 2010 2011

Source: Ofcom / operators Note: Includes estimates where Ofcom does not receive data from operators

18 Figure 5.15

Total fixed and mobile voice call volumes

Billions of minutes Annual 5 year 300 change CAGR 254 256 252 254 242 239 25 28 29 27 19 21 Total -5.6% -0.3% 200 80 69 87 91 98 102 Pre-pay mobile -20.1% 2.2%

100 Contract mobile 4.0% 8.1% 154 149 141 132 129 116 Fixed voice -10.0% -5.6% 0 2006 2007 2008 2009 2010 2011

Source: Ofcom / operators Note: Includes estimates where Ofcom does not receive data from operators

19 Figure 5.16

Total fixed and mobile voice call volumes, by customer type

Billions of minutes Annual 5 year 300 change CAGR 232 218 223 228 229 220 Bus -8.7% -1.2% 200 57 60 65 -0.6% 2.1% 42 51 68 Res 45 40 36 32 32 29 Business mobile 3.6% 10.1% 46 100 54 58 61 60 56 Business fixed -9.1% -8.6%

Residential mobile -6.3% 3.7% 85 78 77 76 76 68 0 Residential fixed -10.7% -4.4% 2006 2007 2008 2009 2010 2011

Source: Ofcom / operators Note: Includes estimates where Ofcom does not receive data from operators; fixed call volumes exclude NTS voice calls.

20 Figure 5.17

Average monthly call minutes per residential fixed and mobile voice connection

Minutes per month Annual 5 year change CAGR 300 297 275 272 272 268 200 236 Fixed -11.6% -4.5%

100 67 74 76 78 74 69 Mobile -7.1% 0.7%

0 2006 2007 2008 2009 2010 2011

Source: Ofcom / operators Note: Includes estimates where Ofcom does not receive data from operators

21 Figure 5.18

Use of methods of communication other than traditional voice telephony

Proportion of respondents (per cent) 100 80 80 80 75 71 64 68 2010 60 52 47 40 2011 40 22 16 19 17 2012 20 10 12

0 Mobile Email Social networking VoIP Mobile instant messaging sites messaging

Source: Ofcom research, data as at Q1 of each year Base: All adults 16+

22 Figure 5.19

Means of communicating with friends and family used at least once a day

Proportion of respondents (per cent) 0 10 20 30 40 50 60

Text messaging 58 Voice call on mobile 47 Social networking (e.g. Facebook) 32 Email 30 Voice call on landline 29 Instant messaging (e.g. MSN) 26 Comment on website 12 VoIP (e.g. Skype) 9 Micro blogging (e.g. Twitter) 8

Source: Ofcom research, Q1 2012 Base: All adults 16+

23 Government announces investment to increase mobile coverage

24 Figure 5.20

Premises in complete mobile not-spots

Source: Ofcom

25 Figure 5.21

Roads targeted to benefit from the Mobile Investment Programme

Name of road Nation Start End A2 Northern Ireland Derry Newry A29 Northern Ireland Coleraine Armagh A591 England Keswick Sizergh A169 England Whitby Norton A57 England Liverpool Manchester A470(T) Wales Llandudno Cardiff A82(T) Scotland Inverness Glasgow A360 England Devizes Salisbury A143 England Great Yarmouth Haverhill A352 England Sherborne Wareham

Source: Department for Culture, Media and Sport

26 The telecoms industry

27 Figure 5.22

UK telecoms revenue by wholesale and retail, fixed and mobile, and corporate data services Revenue (£bn) 50 42.0 42.5 40.7 41.2 40.5 39.7 Corporate data 40 3.2 3.2 3.0 3.3 3.4 3.6 services Retail mobile 13.9 15.0 15.5 14.9 30 14.9 15.1 Retail fixed 20 13.8 13.6 13.4 12.9 12.6 12.3 Wholesale mobile 10 4.0 4.6 5.0 4.7 4.2 3.6 Wholesale fixed 6.1 5.7 5.5 5.4 5.4 5.2 0 2006 2007 2008 2009 2010 2011

Source: Ofcom/operators (retail and wholesale data); IDC (corporate data services data)

28 Figure 5.23

Total retail revenue, by voice and data

Revenue (£bn) 30 3.5 4.0 3.0 4.1 4.3 4.6 Mobile msgg and data

20 10.9 11.5 11.5 Mobile voice 10.9 10.6 10.5 Broadband and 3.2 3.2 3.2 3.3 10 3.2 3.4 narrowband Fixed voice 10.5 10.4 10.2 9.7 9.4 8.9

0 2006 2007 2008 2009 2010 2011

Source: Ofcom / operators

29 Figure 5.24 Average revenue per user (ARPU) per month, by service

£ per month 30 Fixed voice 25.23 24.87 24.56 23.83 23.31 22.26 16.39 16.07 15.38 Mobile voice 20 14.78 13.51 16.27 16.47 15.85 13.70 and 14.43 13.67 13.34 messaging Mobile data 10 11.96 2.09 0.71 0.92 1.30 1.59 1.80 Fixed 0 broadband

Mobile 2011 2006 2007 2008 2009 2010 broadband

Source: Ofcom/operators except for mobile broadband figure which was from YouGov DongleTrack research. In this chart, mobile data refers to handsets only and so excludes mobile broadband. 30 Figure 5.25

Volumes of outgoing fixed minutes and mobile minutes

Minutes (billions) 300

200 88.3 104.9 115.1 120.6 124.9 Mobile 123.6 Fixed

100 154.2 149.5 140.9 131.9 128.8 115.9

0 2006 2007 2008 2009 2010 2011

Source: Ofcom/operators

31 Figure 5.26 Number of connections, by service

Connections (millions) 76.55 80.28 81.17 81.61 PSTN lines 80 70.01 73.81

60 ISDN channels 40 34.47 34.47 34.20 33.54 33.41 33.23 Fixed 16.94 17.86 19.13 20.44 broadband 20 13.01 15.32 connections 4.66 4.70 4.59 4.10 4.82 5.06 Mobile handset 0 2.55 4.18 3.74 3.61 Mobile 2011 2006 2007 2008 2009 2010 broadband

Source: Ofcom/operators. Mobile broadband figures are also included in the total mobile figure.

32 Figure 5.27

Fixed telecoms revenues, by access technology

Revenue (£m)

15,000 13,758 13,574 13,398 12,904 12,572 12,327 Broadband 12,000 2,559 2,954 3,126 3,166 658 242 3,102 3,361 118 85 Narrowband 9,000 74 29 5,490 5,189 4,881 4,613 4,394 3,782 6,000 Calls 830 825 822 770 718 682 3,000 4,222 4,363 4,451 4,269 4,285 4,473 ISDN rental 0 PSTN rental 2006 2007 2008 2009 2010 2011

Source: Ofcom / operators

33 Figure 5.28

Fixed voice revenues, by type of call

Revenue (£m)

6,000 5,383 5,101 4,808 4,553 4,344 Others 1,381 1,283 4,000 1,165 1,115 3,721 669 1,065 International 637 604 503 474 919 403 1,763 1,748 Mobile 1,675 1,595 1,477 2,000 1,243 UK geographic 1,570 1,433 1,363 1,340 1,328 1,156 0 2006 2007 2008 2009 2010 2011

Source: Ofcom / operators

34 Figure 5.29

Fixed voice volumes, by type of call

Billions of minutes

150 24 31 7 28 Others 120 16 7 23 21 15 7 7 7 19 13 12 12 7 International 90 10 Mobile 60 107 97 92 89 88 79 30 UK geographic

0 2006 2007 2008 2009 2010 2011

Source: Ofcom / operators

35 Figure 5.30

Fixed broadband connections

Connections (millions) 20.44 19.13 20 17.86 0.41 16.94 0.13 0.05 4.12 15.32 0.04 4.03 Other broadband 15 13.01 0.04 3.68 3.84 0.03 3.41 3.06 Cable 10 15.91 13.97 14.97 ADSL 11.87 13.22 5 9.93

0 2006 2007 2008 2009 2010 2011

Source: Ofcom / operators

36 Figure 5.31

Local loop unbundling connections

Connections (millions) 20 15.9 15.0 15 14.0 2.0 13.2 2.1 11.9 2.7 Other non-LLU ADSL 9.9 3.2 10 7.9 4.0 7.5 6.4 LLU ADSL 5.5 5.5 3.7 5 1.3 BT Retail ADSL 4.9 5.4 6.0 3.1 4.1 4.5 0 2006 2007 2008 2009 2010 2011

Source: Ofcom / operators

37 Figure 5.32

Fixed broadband market share

Market share BT Retail 7% 3% 3% Virgin

29% TalkTalk 18% Sky

Orange 18% 20% O2

Others

Source: Ofcom / operators

38 Figure 5.33

Fixed broadband connections by ‘up to’ headline speed

% of broadband connections 100% 0% 1% 8% 8% 2% 5% 8% 24% 80% 41% 30Mbit/s and higher 45% 53% 60% 59% 62% 60% Over 10Mbit/s and less than 30Mbit/s 40% 68% Over 10Mbit/s 54% 51% 8Mbit/s to 10Mbit/s 20% 41% 34% 30% 31% 8% Less than 8Mbit/s 0% 4% 2% 1% 1% Nov 2008 Apr 2009 May 2010 Nov 2010 May 2011 Nov 2011 May 2012

Source: Ofcom/operators. Excludes business connections.

39 Figure 5.34

Mobile retail revenue, by voice, messaging and data

Revenues (£bn) 15 1.2 0.8 1.5 0.6 1.7 2.0 2.7 2.8 2.6 2.4 2.6 2.5 Data 10 Messaging 11.5 11.5 5 10.9 10.9 10.6 10.5 Voice

0 2006 2007 2008 2009 2010 2011

Source: Ofcom / operators

40 Figure 5.35

Mobile retail revenues, by type of call

Revenue (£m)

12,000 Other calls 1,132 1,097 1,051 377 429 1,233 10,000 339 1,355 1,422 International 1,751 1,569 399 353 1,948 1,460 352 8,000 728 693 1,228 1,062 776 639 607 526 Off-net mobile 828 882 705 638 563 6,000 831 On-net mobile 4,000 6,595 6,909 6,582 5,861 6,416 6,415 Calls to fixed 2,000

0 Access and bundled calls 2006 2007 2008 2009 2010 2011

Source: Ofcom / operators

41 Figure 5.36 Mobile average revenue per user

£ per month 40 34.89 34.58 32.78 28.74 Blended 30 26.24 25.14

20 16.99 17.40 17.15 16.03 15.47 15.43 Prepay 10 7.24 7.43 7.23 7.12 6.86 6.56 0 Postpay 2011 2006 2007 2008 2009 2010

Source: Ofcom / operators. Blended refers to all subscribers – prepay and postpay.

42 Figure 5.37

Outgoing mobile minutes, by type of call

Billions of minutes 125 124 125 121 115 8 8 105 72 2 2 72 Other calls 100 7 88 2 38 41 36 38 17 International 75 33 26 Off-net mobile 42 45 42 50 32 38 26 On-net mobile 25 28 31 31 32 32 31 UK geographic 0 2006 2007 2008 2009 2010 2011

Source: Ofcom / operators

43 Figure 5.38 Volume of mobile voice minutes, by pre-pay and post-pay subscribers

Billions of minutes

100 102 87 98 80 80 91 69 Prepay 60

40 28 29 27 19 25 21 20

0 Postpay 2011 2006 2007 2008 2009 2010

Source: Ofcom / operators

44 Figure 5.39 Volume of SMS messages sent

Billions of messages 100 83 80 68 Prepaid 53 60 68 43 61 40 34 52 26 42 33 20 25

0 Postpaid 2011 2006 2007 2008 2009 2010

Source: Ofcom / operators

45 Figure 5.40 Number of mobile connections

Millions of connections Mobile 100 connections 80 81 82 77 80 70 74 Internet via 60 mobile handset 40 33 23 Mobile 14 broadband 20 9 8 5 5 3 4 0 3 4 M2M 2011 2006 2007 2008 2009 2010 Source: Ofcom/operators and Ofcom market research. Note: ‘Mobile broadband’ connections and ‘internet via mobile handset’ connections are included in the figure for ‘Mobile connections’. M2M connections are reported separately. ‘Internet via mobile handset’ does not count mobile users who access services such as email or social networking via their mobile device but who do not browse the web. Internet via mobile handset figures are collected in the first quarter of the following year. M2M figures are for September of the stated year.

46 Figure 5.41 Number of mobile connections, by pre-pay and post-pay

Millions of connections 47 50 45 46 46 44 41 40 40 Prepay 37 30 33 30 27 20 25 Postpay 10

0 2011 2006 2007 2008 2009 2010

Source: Ofcom / operators

47 Figure 5.42

Machine-to-machine (M2M) revenue

£million

2,500 2,417 1,953 2,000

1,500

1,000

500 73 98 0 2010 2011

Total revenue MNO expected revenue

Source: Machina Research: M2M Global Forecast and Analysis

48 Figure 5.43

Machine-to-machine (M2M) connections, by application

% of connected devices

30% 28% 26% 21%

20% 19% 14% 12% 12% 12% 11% 9%

10% 6% 6% 4% 3% 3% 3% 2% 2% 2% 2% 2% 1% 0% Others AV sources AV security processing devices payment equipment tracking Smart metering Smart Manufacturing & Intelligent building Consumer network Traffic management Traffic Goods monitoring & Personal multimedia Automotive security & Smart office Smartequipment office

Source: Machina Research, M2M Global Forecast and Analysis

49 Figure 5.44 Business fixed voice and fixed broadband connections

Millions of connections 6 5.3 5.2 5.1 5.1 5.0 4.9 PSTN lines 5 4 4.6 4.7 4.6 4.2 3.7 3 3.6 ISDN lines

2 1.6 1.5 1.5 1.6 1.5 1.7 1 0.9 1.0 1.0 0.9 1.0 0.9 Other lines 0 2011 2006 2007 2008 2009 2010 Broadband

Source: Ofcom / operators

50 Figure 5.45

Business mobile handset and mobile broadband connections: December 2011 Millions of connections

Mobile 1.4 handset

9.0 Mobile broadband

Source: Ofcom / operators

51 Figure 5.46

Type of wide-area connectivity used by businesses

% of businesses that use each type of connection 100% 80% 69% 56% 60% 42% 40% 21% 22% 20% 9% 0% Cable ISDN lines Internet Leased lines Ethernet SDSL modem, access via leased lines ADSL and dial-up mobile broadband

Source: Ofcom Business Connectivity Services Review

52 Figure 5.47

Applications used over businesses’ wide area network connections

% of businesses that use each application over their wide area connection(s)

100% 96% 83% 80% 77% 61% 60% 47% 45% 40% 35%

20%

0% Email and Remote access Apps, info and Storage Voice - PSTN Voice over IP Video internet knowledge networking grade

Source: Ofcom Business Connectivity Services Review

53 Figure 5.48

Likelihood of switching to super-fast broadband

% of businesses Very likely 2% 14% Quite likely 25% Neither 18% Quite unlikely 28% 13% Very unlikely

Don't know

Source: Ofcom Business Connectivity Services Review

54 Figure 5.49

Business fixed voice volumes and revenues

Billions of outgoing minutes Voice revenues (£bn)

50 5 3.9 40 3.8 3.6 4 3.2 2.9 2.8 30 3 Volumes 45 40 20 36 2 32 32 29 10 1 Revenues

0 0 2011 2006 2007 2008 2009 2010

Source: Ofcom / operators. Excludes NTS.

55 Figure 5.50 Corporate data services revenue, by type of connectivity

£million 1,438 1,466 1,500 1,354 1,355 1,385 Frame 1,208 relay/ATM 1,250 1,386 981 1,224 IP VPN 1,000 885 1,092 809 750 555 Ethernet 465 445 500 385 396 493 233 307 Digital leased 250 350 313 250 197 line 183 0 141 107 79 58 40 Web hosting 2006 2007 2008 2009 2010 2011

Source: IDC

56 Figure 5.51

Audio, web and video conferencing revenue

£millions 151 148 150 125 113 100 106 Audio conferencing 100 75 62 51 Web conferencing 50 25 0 Video conferencing 2009 2010 2011

Source: Ovum: Audio and Web Conferencing Services, Volume and Revenue Forecast and Ovum: Enterprise Business Video Forecast.

57 The telecoms user

58 Figure 5.52

Average household spend on telecoms services

£ per month (2011 prices) As a % of total expenditure

4% 3.4% 3.4% 3.3% 3.3% Fixed internet 100 3.2% 3.0% 3% £78.46 £76.00 £73.04 Mobile voice & £70.81 £68.06 11.92 11.06 £65.04 data 10.68 11.02 10.53 10.78 2% 50 37.94 Fixed voice 37.81 36.51 35.05 33.49 32.21 1% As a proportion of 28.61 27.13 25.84 24.73 24.04 22.06 total household 0 0% spend 2006 2007 2008 2009 2010 2011

Source: Ofcom / operators / ONS Notes: Includes estimates where Ofcom does not receive data from operators; adjusted to RPI; includes VAT

59 Figure 5.53 Comparison of average fixed and mobile voice call charges

Pence per minute

15 12.3 10.9 10.0 9.0 10 8.5 8.5 Fixed

7.9 7.8 7.7 8.3 7.0 7.6 5 Mobile

0 2006 2007 2008 2009 2010 2011

Source: Ofcom / operators Note: Includes estimates where Ofcom does not receive data from operators; fixed calculation excludes non-geographic voice calls Figure 5.54 Household penetration of fixed and mobile broadband

Proportion of respondents (per cent) Total broadband 68% 71% 74% 76% 100% take-up 32 29 26 24 None 80% 42 48 5 3 6 7 8 Mobile only 60% 9 9 9 Fixed and mobile 40% 64 52 58 56 56 58 Fixed only 20% Any broadband 0% 2007 2008 2009 2010 2011 2012

Source: Ofcom research, data as at Q1 of each year Base: All adults aged 16+

61 Figure 5.55

Household penetration of key telecoms technologies

Proportion of adults (%)

100 93 93 92 92 93 94 Mobile telephony 90 88 87 85 85 84 Fixed telephony 80 76 79 70 73 76 67 71 74 64 68 72 Internet connection 60 58 65 65 67 52 Total broadband 42 38 40 Fixed broadband 30 39 27 32 Mobile data user 20 20 21 17 Internet on mobile 12 15 13 0 Mobile broadband 2007 2008 2009 2010 2011 2012 dongle or datacard

QE1: Does your household have a PC or laptop computer? / QE2: Do you or does anyone in your household have access to the Internet/Worldwide Web at HOME (via any device, e.g. PC, mobile phone etc)? / QE6: Which of these methods does your household use to connect to the Internet at home? Source: Ofcom research, data as at Q1 of each year Base: All adults aged 16+

62 Figure 5.56

Household penetration of fixed and mobile telephony

Proportion of respondents (per cent)

100% 1 1 1 1 1 1 9 11 12 14 15 15 None 80%

60% Mobile only 84 81 80 78 79 79 40% Fixed and mobile 20% Fixed only 0% 7 8 7 7 6 5 2007 2008 2009 2010 2011 2012

Source: Ofcom research, data as at Q1 of each year Base: All adults aged 16+

63 Figure 5.57 Average monthly time per person spent using telecoms services

Hours per month 8 7.5 6.1 6.1 6 5.5 5.0 5.0 2010

4 3.1 3.3 2.1 2011 2 1.7 1.0 0.8

0 Fixed voice Mobile voice Mobile Member Email Mobile internet messaging communities Change -9.6% -1.2% +22.7% +5.3% -19.1% +24.7 between 2010 and 2011 Source: Ofcom / operators / Nielsen / UKOM / Comscore / Strategy Analytics Note: Includes estimates where Ofcom does not receive data from operators; fixed voice call figures include NTS voice calls; mobile messaging figures are Ofcom estimates based on message volume data and Ofcom Digital Day research conducted in 2010; Ofcom estimate of member communities and email use per person is based on Nielsen’s data on the average monthly time spent using these services at home and work on a PC/laptop including the use of applications in March of each year across the online population only.

64 Fixed voice services

65 Figure 5.58

Real cost of a basket of residential fixed voice services

£ per month (2011 prices)

25 23.15 22.90 22.62 22.17 22.15 21.65 2.49 2.79 2.96 3.01 3.06 20 2.35 2.97 Calls to mobiles 1.93 1.58 1.34 1.22 1.01 15 International calls 10 18.31 18.17 18.08 17.81 17.86 17.66 Fixed access & 5 UK geographic calls 0 2006 2007 2008 2009 2010 2011 Annual -0.3% -1.1% -1.2% -2.0% -0.1% -2.3% change

Source: Ofcom / operators Note: Includes estimates where Ofcom does not receive data from operators; excludes non-geographic voice calls; adjusted for RPI; includes VAT

66 Figure 5.59

Use of fixed voice communication services in the home

Proportion of respondents (per cent) 95% 100% 91% 87% 82% Personally 80% 72% use a 61% landline 60% Have ever used VoIP 40% 32% 31% 26% 30% 25% 24% 21% 21% 22% Currently 20% 17% 12% 9% use VoIP 0% All 16-24 25-34 35-54 55-64 All aged 65 respondents or older

Source: Ofcom research, Q1 2012 Base: All adults aged 16+

67 Figure 5.60

Average monthly outbound fixed voice call volumes per person

Minutes per month 250 NTS voice 210 203 190 calls 200 33 177 42 172 38 154 22 31 Calls to 150 9 20 29 9 18 17 16 26 mobiles 10 9 10 14 100 9 Outgoing 146 132 125 119 118 international 50 105 calls UK geographic 0 calls 2006 2007 2008 2009 2010 2011 Annual change -5.9% -3.7% -6.3% -7.0% -2.9% -10.5% in total

Source: Ofcom / operators Note: Includes estimates where Ofcom does not receive data from operators

68 Figure 5.61 Average per-minute fixed voice call charges

Pence per minute 15 12.9 12.0 12.5 12.5 11.9 Calls to mobiles 11.0

1010.0 Average for 9.3 8.5 7.8 7.7 8.3 7.6 7.9 these call types 7.0 7.2 7.2 8.0 7.2 6.8 7.2 6.6 UK geographic 5 6.2 5.9

International 0 2006 2007 2008 2009 2010 2011

Source: Ofcom / operators Note: Includes estimates where Ofcom does not receive data from operators; UK geographic calls calculation includes line rental revenues Figure 5.62 Analysis of standalone fixed-line tariffs

2011 2012

Provider With evening With evening With weekend With anytime With weekend With anytime and weekend and weekend calls calls calls calls calls calls £13.60 £18.60 £14.60 £17.75 £19.50 BT - (£10.00) (£15.00) (£10.75) (£13.90) (£15.65) £17.411 £20.01 TalkTalk - £15.911 £18.51 - (£13.11) 1 (£15.71) Virgin - £16.992 £20.992 - £18.502 £21.902

Source: Pure Pricing UK Broadband Pricing Briefing, March 2011 and March 2012 Notes: All tariffs exclude activation charges and promotional discounts and include VAT; all tariffs are the lowest price available; contract lengths vary; figures in brackets require prepayment of twelve month’s line rental; ¹ also includes anytime calls to TalkTalk landlines; ² also includes calls to Virgin Mobile mobiles

70 Figure 5.63

Overall consumer satisfaction with residential fixed-line services

Proportion of all adults with service (per cent)

100 88 91 91 89 89 80 32 34 34 32 34 Fairly satisfied 60

40 Very satisfied 56 57 57 57 56 20

0 2008 2009 2010 2011 2012

Source: Ofcom research Base: All adults aged 16+ with a fixed line phone Note: Includes only those who expressed an opinion

71 Fixed broadband services

72 Figure 5.64

Estimated average monthly cost of a residential fixed broadband connection

£ per month Annual -15.4% -13.1% -11.8% -2.8% -9.2% -1.4% change 25

20

15 £23.60 £20.51 10 £18.09 £17.59 £15.96 £15.73 5

0 2006 2007 2008 2009 2010 2011 Average 2.5Mbit/s 4.8Mbit/s 6.4Mbit/s 8.3Mbit/s 12.8Mbit/s 16.8Mbit/s headline speed Source: Ofcom / operators Note: Data is based on operator allocations of revenues for bundled services and should be treated with some caution; includes estimates where Ofcom does not receive data from operators 73 Figure 5.65

Lowest cost fixed broadband options from major suppliers Fixed Fixed Fixed Fixed Fixed Fixed Fixed broadband broadband, broadband, Provider broadband broadband broadband broadband and fixed fixed line fixed line only and calls and mobile and pay-TV line and mobile and pay-TV AOL £15.311 10.201 £20.30 - - - - £28.60 £28.60 BT - - - - - (£24.75) (£24.75) O2 £13.501 - £26.50 £8.501,2 - £21.502 - Orange - - £23.50 - - £18.502 - £19.48 Plusnet - £6.491 - - - - (£15.98) £22.25 £32.25 Sky - - - - - (£19.95) (£29.95) £20.30 TalkTalk ------(£16.00) Virgin Media £22.50 - £28.40 £22.502 £36.50 £28.402 £33.90 Source: Pure Pricing UK Broadband Pricing Briefing, March 2012 Notes: All tariffs exclude activation charges and promotional discounts and include VAT; all tariffs are the lowest price available, contract lengths vary; allowances for fixed-line and mobile calls, plus availability of TV channels included within packages may differ by operator and option; figures in brackets require pre-payment of twelve month’s line rental; 1 also requires BT fixed line rental at £14.60 a month / £129 pre-payment for a year; 2 plus cost of mobile tariff. 74 Figure 5.66

Take-up of fixed and mobile broadband services, by age

Proportion of respondents (per cent) 100 82 77 79 72 73 73 76 Fixed and 80 67 70 9 69 70 65 66 63 12 11 11 63 62 8 12 10 14 6 4 mobile 60 9 9 12 5 51 2 13 46 broadband 1 2 40 66 68 73 66 25 25 56 58 64 61 60 59 64 58 63 60 21 Fixed 54 50 45 49 20 1 broadband 25 25 20 only 0 2011 2011 2011 2011 2011 2011 2011 2010 2012 2010 2012 2010 2012 2010 2012 2010 2012 2010 2012 2010 2012 All adults 16-24 25-34 35-54 55-64 65-74 75+

Source: Ofcom research, data as at Q1 of each year Base: All adults aged 16+

75 Figure 5.67

Non-ownership of home broadband, by socio-economic group and age

Proportion of respondents (per cent) 79 80 7574

2010 60 52 48 47 4543 36 2011 40 31 34 2926 2626 2827 24 2322 19 19 2012 20 1614 17 1517 171414

0 All ABC1 C2 DE 15-24 25-34 35-54 55-64 65-74 75+

Source: Ofcom research, data as at Q1 of each year Base: All adults 16+

76 Figure 5.68 Main reasons for not having a home broadband connection

Proportion of those without broadband (per cent) 50

40

30

20 41 25 10 19 18 18 17 0 Don't need it Don’t want a Don't have Too expensive Too old to use Likely to get in computer knowledge / internet next year skills

Source: Ofcom research Note: 6% of people without the internet did not know what their main reason was or provided an ‘other’ reason Base: All adults without the internet aged 16+

77 Figure 5.69 Location of internet access

Proportion of adults aged 16+ (per cent) 0 20 40 60 80

77 At home 74 72 26 At work 24 25 14 At someone elses house 11 10 At library or educational 11 10 institution 11 2012 3 At internet cafe 3 2 2011 1 All other locations 2 2010 1 In total 81% of UK adults used the internet in Q1 2012 Source: Ofcom research, data as at Q1 of each year Base: All internet users aged 16+

78 Figure 5.70

Average time per person spent online using a PC/laptop at home

Hours per month

15

10

13.4 13.7 13.9 11.3 5 8.7

0 2008 2009 2010 2011 2012

Source: Ofcom / Nielsen / UKOM Note: Ofcom estimate of fixed internet use per person is based on Nielsen’s data on the average monthly time spent online at home including the use of applications across the online population only; data are for March of each year.

79 Figure 5.71

Residential consumer satisfaction with aspects of fixed broadband service

Proportion of all adults with service (per cent)

100 89 90 90 86 87 83 81 80 80 80 80 34 38 40 Fairly 41 44 34 60 36 38 41 41 satisfied

40 Very satisfied 55 52 50 49 20 46 43 45 42 39 39

0 2008 2009 2010 2011 2012 2008 2009 2010 2011 2012 Overall Speed of service

Source: Ofcom research Base: All adults aged 16+ with a fixed broadband connection Note: Includes only those who expressed an opinion

80 Mobile voice and messaging services

81 Figure 5.72

Real cost of a basket of mobile services

£ per month (2011 prices) 30 £27.86 Metered messaging £23.82 10.21 £20.64 20 8.44 £17.38 Metered voice 6.57 £15.44 £14.25 4.83 7.08 3.83 4.91 3.93 3.09 10 3.38 2.84 2.38 Line rental fee, UK landline 10.57 10.47 10.15 9.17 8.76 8.78 calls and inclusive calls, 0 texts and data 2006 2007 2008 2009 2010 2011 Annual -12.6% -14.5% -13.3% -15.8% -11.2% -7.7% change

Source: Ofcom / operators Note: Includes estimates where Ofcom does not receive data from operators; excludes non-geographic voice calls; adjusted for RPI; includes VAT

82 Figure 5.73

Average cost per mobile voice call minute, by customer type

Pence per minute 15 12.5 11.5 10.7 9.5 Pay 1011.6 8.7 8.6 monthly 8.9 8.2 7.8 7.5 7.6 5 Pre-pay

0 2006 2007 2008 2009 2010 2011

Source: Ofcom / operators Note: Includes estimates where Ofcom does not receive data from operators; contract calculation includes rental element which will often includes a number of inclusive messages and data allowance; calculations use actual minutes of usage

83 Figure 5.74

Contract lengths for new post-pay mobile connections

Proportion of sales (%)

100 1 1 1 1 1 1 1 1 1 2 24 3 5 7 13 26 Other 80 41 47 50 63 69 70 68 70 69 70 67 24 months 60 80 84 82 75 72 68 67 63 60 50 18 months 40 35 28 24 12 3 2 5 3 6 4 3 2 3 12 8 3 3 3 4 7 8 10 9 11 13 16 12 months 20 11 13 8 19 19 24 24 21 20 21 21 19 16 15 13 10 15 18 17 17 18 18 14 14 0 2 1 month Q2 Q3 Q4 Q2 Q3 Q4 Q2 Q3 Q4 Q2 Q3 Q4 Q2 Q3 Q4 Q1 2011 Q1 Q1 2007 Q1 2008 Q1 2009 Q1 2010 Q1 2012 Q1

Source: GfK Retail and Technology UK Ltd, Contract Length Sales of new Mobile Connections, Q1 2007 to Q1 2012. Notes: England, Scotland and Wales only (excludes Northern Ireland); based on GfK’s coverage of 94% of the consumer market; based on new post-pay connections; excludes contract renewals; only represents sales through consumer channels (i.e. most business connections are excluded).

84 Figure 5.75

Monthly line rental prices for new post-pay mobile connections

Proportion of sales (%)

100% 9 9 8 9 7 £40+ 17 19 17 15 15 16 12 13 15 12 13 10 10 10 23 21 14 80% 15 11 13 13 12 14 14 15 £35-39.99 26 19 15 14 7 30 28 13 11 10 8 8 9 9 34 31 13 12 10 £30-34.99 60% 46 38 13 12 17 21 14 12 10 43 41 14 11 11 14 15 11 10 14 11 10 10 13 11 £25-29.99 8 7 13 13 14 13 40% 6 8 13 13 13 15 16 20 £20-24,99 9 13 14 11 10 18 19 20 14 9 13 8 10 20 17 11 6 6 21 23 23 22 19 18 £15-19.99 20% 16 6 20 14 9 12 15 17 17 19 24 26 26 29 4 4 12 12 12 13 15 18 17 18 20 £0-14.99 0% 05 05 08 6 7 6 7 7 Q2 Q3 Q4 Q2 Q3 Q4 Q2 Q3 Q4 Q2 Q3 Q4 Q2 Q3 Q4 Q1 2011 Q1 Q1 2007 Q1 2008 Q1 2009 Q1 2010 Q1 2012 Q1

Source: GfK Retail and Technology UK Ltd, Contract Handset Acquisitions: price segments. Notes: England, Scotland and Wales only (excludes Northern Ireland); based on GfK’s coverage of 94% of the consumer market; based on new post-pay connections; excludes contract renewals; only represents sales through consumer channels (i.e. most business connections are excluded).

85 Figure 5.76

Household penetration of fixed and mobile telephony, by socio-economic group and age

Proportion of respondents (per cent)

100% 1 2 1 1 61 5 1 15 11 13 11 25 26 None 80% 33 61 60% Mobile only 84 86 83 87 88 40% 79 63 65 73 Fixed and mobile 20% 37 Fixed only 9 11 0% 5 4 4 1 1 4 All ABC1 C2 DE 16-24 25-34 35-54 55-64 65-74 75+

Source: Ofcom research, Q1 2012 data Base: All adults aged 16+

86 Figure 5.77

Average monthly outbound mobile voice minutes per person

Minutes per month

200 Other calls 167 164 155 162 11 142 9 3 103 150 103 3 Outgoing 121 9 2 51 51 54 international calls 29 49 100 45 Off-net calls 36 59 44 52 56 55 50 35 On-net calls 39 42 42 42 43 42 UK fixed calls 0 2006 2007 2008 2009 2010 2011 Annual +15% +28% +9% +4% +3% -2% change

Source: Ofcom / operators Note: Includes estimates where Ofcom does not receive data from operators; calculation excludes mobile broadband connections

87 Figure 5.78 Average monthly outbound mobile call minutes per connection, by subscription type

Minutes per month 300 243 256 252 240 233 221 Pay 200 monthly

100 Pre-pay 50 52 48 36 45 41

0 2006 2007 2008 2009 2010 2011

Source: Ofcom / operators Note: Includes estimates where Ofcom does not receive data from operators; calculation excludes mobile broadband connections

88 Figure 5.79 Average monthly mobile messaging volumes per person

Messages per month 200.5 200 0.8 172.0 0.7 150 140.5 MMS picture 0.7 115.0 messages 0.6 100 90.4 199.7 70.3 0.4 171.2 0.3 139.9 SMS text 114.4 50 90.0 messages 70.0 0 2006 2007 2008 2009 2010 2011

Source: Ofcom / operators Note: Includes estimates where Ofcom does not receive data from operators.

89 Figure 5.80 Average monthly messaging volumes by subscription type

Messages per month 200 179 160 150 138 121 Pay 104 monthly 89 132 100 111 92 Pre-pay 77 50 61 49

0 2006 2007 2008 2009 2010 2011

Source: Ofcom / operators Note: Includes estimates where Ofcom does not receive data from operators.

90 Figure 5.81

Residential consumer satisfaction with aspects of mobile service

Proportion of all adults with service (per cent)

100 94 94 94 93 95 88 88 87 88 89

80 35 32 33 32 37 30 29 30 30 35 Fairly 60 satisfied

40 Very 62 59 61 61 58 58 59 57 58 55 satisfied 20

0 2008 2009 2010 2011 2012 2008 2009 2010 2011 2012 Overall Accessing the network

Source: Ofcom research, data as at Q1 of each year Base: All adults aged 16+ with a mobile phone Note: Includes only those who expressed an opinion

91 Internet access on a mobile handset

92 Figure 5.82 Use of data services on mobile handsets

Proportion of mobile data users (per cent) 50 40 40 2010 29 30 28 19 19 2011 20 18 17 13 10 11 12 10 8 2012

0 Internet access Emailing Instant messaging Downloading apps

QD9A: Which if any of the following activities, other than making and receiving voice calls, do you use your mobile for? Source: Ofcom research, data as at Q1 of each year Base: All mobile users aged 16+

93 Figure 5.83

Location of internet access using a mobile handset

Proportion of mobile data users

Always use outside Always use in the home, 6% the home, 6%

Mainly use in the Mainly use outside home, 12% the home, 15%

Use equally inside and outside the home, 60%

Source: Ofcom research, Q1 2012 Base: All adults aged 16+who access the internet on their mobile phone

94 Figure 5.84 Use of the internet on mobile phones, by socio-economic group

Proportion of respondents (per cent) 80 68 61 2010 60 57 53 50 46 42 41 44 39 38 36 2011 40 32 34 3134 30 28 27 26 25 23 17 1920 20 13 2012 9 2 2 3 0 All adults 15-24 25-34 35-54 55-64 65+ AB C1 C2 DE

QD28A: Which if any, of the following activities, other than making and receiving voice calls, do you use your mobile for? Source: Ofcom research, data as at Q1 of each year Base: All adults 16+ Note: Web/data access includes accessing the internet, downloading and streaming content, connecting using Wi-Fi and using VoIP.

95 Mobile broadband services

96 Figure 5.85 Take-up of mobile broadband, by socio-economic group

Proportion of respondents (per cent) -4 -7 -6 -5 -2 0 0 -5 -4 -1 -5 -3 -9 -5 Annual change 25 21 20 Mobile 20 broadband 16 9 15 only 15 13 8 13 13 13 12 3 11 11 4 4 3 10 10 5 3 7 Fixed and 7 6 mobile 5 12 12 3 3 12 10 8 9 1 9 9 broadband 4 1 4 6 5 0 2 1 All 24 34 54 64 74 C1 C2 AB DE - - - - - 75+ 16 25 35 55 65 Rent: social Rent: Rent: private Rent:

Socio-economic Own/mortgage Age group Housing

Source: Ofcom research, Q1 2012 Base: All adults aged 16+

97 Figure 5.86 Location of mobile broadband use outside the home

Proportion of total mentions (per cent)

Other At work 1% 14% When travelling 25%

At someone else's house 17%

Indoor public spaces Outdoors 22% 21%

Source: Ofcom research, Q1 2012 Base: All adults aged 16+ who use mobile broadband outside the home

98 Figure 5.87 Lowest cost standalone mobile broadband contracts by provider

Minimum Charges Monthly Data WiFi hotspot Provider contract above charge allowance use length allowance Vodafone 2011 £7.50 500MB 1 month £15/GB 1GB 2012 £3.00 250MB 1 month £2/250MB/day Not included O2 2011 £5.11 500MB 1 month 2.4p/MB Unlimited £5.11/500MB 2012 £10.21 1GB 1 month Unlimited or £10.21/GB T-Mobile 2011 £10.00 1GB fair use 18 months n/a Not included 2012 £10.00 1GB fair use 18 months n/a Not included Orange 2011 £10.00 500MB 1 month 5.1p/MB Not included 2012 £10.00 500MB 1 month 5.1p/MB Not included 3UK 2011 £7.89 1GB 18 months 10p/MB Not included 2012 £7.87 1GB 18 months 10.2p/MB Not included Virgin Mobile 2011 £10.21 1GB 2 months 1.46p/MB Not included 2012 £10.21 1GB 2 months 1.46p/MB Not included Source: Pure Pricing UK Broadband Pricing Briefings Note: Data as at March of each year

99 Figure 5.88

Residential consumer satisfaction with aspects of mobile broadband service

Proportion of all adults with service (per cent) 100 88 83 82 83 80 78 80 73 70 Fairly 40 46 44 satisfied 60 44 41 43 35 40 40 Very satisfied 42 42 20 39 40 35 33 39 36

0 2009 2010 2011 2012 2009 2010 2011 2012 Overall Speed of service

Source: Ofcom research Base: All adults aged 16+ with a mobile broadband connection Note: Includes only those who expressed an opinion

100 6. Post

0 Figure 6.1 UK postal services industry key metrics

UK postal services industry 2006 2007 2008 2009 2010 2011

Addressed mail volumes 22.0bn 21.6bn 20.6bn 18.6bn 17.5bn 16.6bn

Mail revenues £6.8bn £6.8bn £6.8bn £6.6bn £6.5bn £6.7bn

Proportion of access mail in total mail 9.6% 16.9% 24.6% 32.7% 39.9% 43.6%

Direct mail share of advertising spend 14.2% 12.7% 12.3% 11.6% 10.9% 10.7%

Value of UK e-retail market £30.2bn £35.2bn £43.8bn £49.8bn £58.8bn £68.0bn

Source: Royal Mail Regulatory Financial Statements, Royal Mail Wholesale, Royal Mail Group Annual Reports, AA/Warc. Revenue figures are nominal. Note: Addressed mail volumes and revenues include Royal Mail total mails (excluding Parcelforce and unaddressed), access revenues and end-to-end delivered addressed letter mail. This does not include courier or express volumes and revenues. Royal Mail calendar year volume and revenue figures are derived from Ofcom calculations based on financial year figures in Royal Mail’s Regulatory Statements and estimates of 2011-12 performance informed by Royal Mail’s Report and Accounts and are therefore not directly comparable with Royal Mail’s published accounts. . Figure 6.2

Royal Mail’s pipeline

Outward Inward Local Collections Trunk Delivery Processing Network Processing Distribution

2 Figure 6.3

Point of access

Access volumes

Outward Inward Local Collections Trunk Delivery Processing Network Processing Distribution

3 Figure 6.4

Other operators’ end-to-end delivered volumes

Volume (million items) 12

9

6 11.8 11.3

8.5 3

0 2009 2010 2011

Source: Operators’ returns, based on former licensed area delivered volumes

4 Figure 6.5

Mail market revenue 2005 to 2011 Revenue (£ mn) 8,000 6,760 6,797 6,843 6,764 Total mail 7,000 6,661 6,513 6,695 6,755 6,746 6,783 6,653 6,000 6,522 6,546 6,641 6,499 6,371 Royal Mail total mail 6,254 5,922 5,601 5,000 5,281 5,302 4,000 Royal Mail end-to- end 3,000

2,000 Royal Mail access 1,090 1272 731 921 1,000 104 284 501 14 140 142 150 14 88 112 Other operator 0 access 2005 2006 2007 2008 2009 2010 2011 Source: Royal Mail Regulatory Financial Statements, operator returns to Ofcom, Ofcom estimates Note: Royal Mail end-to-end refers to Royal Mail total mail revenues excepting access. Royal Mail calendar year revenue figures are derived from Ofcom calculations based on financial year figures in Royal Mail’s Regulatory Statements and estimates of 2011-12 performance informed by Royal Mail’s Report and Accounts and are therefore not directly comparable with Royal Mail’s published accounts. Addressed mail only. Figures are nominal. 5 Figure 6.6

Royal Mail volume 2005 to 2011 Volume (million items) 25,000 22,280 21,976 21,587 20,553 19,857 20,000 21,494 18,620 17,946 17,515 Total mail 16,599 15,489 15,000 12,528 10,519 Royal Mail end- 9,361 to-end 10,000 6,996 6,092 7,238 5,064 Total access 5,000 3,641 2,119 786 00 2005 2006 2007 2008 2009 2010 2011 Source: Royal Mail Wholesale, Royal Mail Regulatory Financial Statements, Ofcom estimates Note: Royal Mail end-to-end refers to total mail volumes excepting access. Royal Mail calendar year volume figures are derived from Ofcom calculations based on financial year figures in Royal Mail’s Regulatory Statements and estimates of 2011-12 performance informed by Royal Mail’s Report and Accounts and are therefore not directly comparable with Royal Mail’s published accounts. Addressed mail only. 6 Figure 6.7

Proportion of access in total mail 2005 to 2011

Year on year growth rate of access volumes 1817.1% 169.6% 71.8% 39.1% 20.3% 14.8% 3.5% 50%

40%

30%

44% 20% 40% 33% 25% 10% 17% 4% 10% 0% 2005 2006 2007 2008 2009 2010 2011

Source: Royal Mail Wholesale, Royal Mail Regulatory Financial Statements, Ofcom estimates Note: Royal Mail calendar year volume figures are derived from Ofcom calculations based on financial year figures in Royal Mail’s Regulatory Statements and estimates of 2011-12 performance informed by Royal Mail’s Report and Accounts and are therefore not directly comparable with Royal Mail’s published accounts. 7 Figure 6.8

Royal Mail access volumes and revenues by format 2011-12

100% 0.5% 2.4% 11.3% 16.3% 80%

60% Packet/A3 88.2% Large Letter 40% 81.3% Letters/Other

20%

0% Volume Revenue

Source: Royal Mail Wholesale, 2011-12

8 Figure 6.9

Applications of mail

Social Fulfilment 8% 3% Publishing 8%

Advertising Transactional 22% 59%

Source: Ofcom estimates

9 Figure 6.10

Direct mail volume and proportion of total mail 2006-2011

Direct mail volume Proportion of total volume

Volume (million items) Share of total volume 6,000 22.9% 25% 21.6% 21.2% 21.8% 20.2% 19.1% 5,000 20% 4,000 15% 3,000 5,028 4,655 10% 2,000 4,353 3,563 3,537 3,620 1,000 5%

0 0% 2006 2007 2008 2009 2010 2011

Source: Mediatel, Royal Mail Regulatory Statements, Ofcom estimates

10 Figure 6.11

Spend on direct mail post and production, 2007– 2011

Revenue £m 2500 2,171.4 2,040.2 2000 1,685.9 1,711.5 1,751.3 1269.13 1500 1182.33 Expenditure on production 971.08 977.04 977.12 1000 Expenditure on 500 902.2 post 857.9 714.9 734.5 774.1

0 2007 2008 2009 2010 2011

Source: Mediatel. Figures are nominal.

11 Figure 6.12

Share of direct mail expenditure by sector

30% 26% 26% Mail Order / Home 25% 25% Shopping 25% 23% Other 22% 20% 19% 20% Charities 16% 18% 15% 15% Finance - General 15% Insurance Retail 13% 10% 12% 12% 11% Travel and Transport

Telecoms - Fixed Line 5% Services Other Finance 0% 2008 2009 2010 2011 Finance - Plastic Cards

Source: Nielsen Addynamix

12 Figure 6.13

E-retail sales value from 2000 to 2011

Sales value (£bn) 70 68 58.8 60 49.8 50 43.8 40 35.2 30.2 30 19.2 20 14.5 11 10 6.4 0.8 1.8 0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

Source: Interactive Media in Retail Group

13 Figure 6.14

Packet and parcel service types used for UK delivery, April 2012

Specified time slot 5%

Specified day (including next day) Economy 41% 54%

Source: Interactive Media in Retail Group / Metapack Delivery Index, April 2012 Note: Proportions rebased to exclude international

14 Figure 6.15

Approximate number of parcels sent and received each month by residential consumers % of consumers Parcels sent Parcels received 60 50

41 40 40

24

20 14 5 0 Don't always send/receive parcels 1 or 2 3 or more each month

Source: Ofcom Post Omnibus 2011 - fieldwork 1st Dec – 13th Dec 2011 Base: All consumers responsible for sending or receiving post (n= 3621)Q: Please now think about the parcels you send. How many parcels do you send in an average month? *Assuming those saying ‘don’t always send one each month’ send 1 parcel every 3 months; Q: ‘Approximately how many parcels do you receive on average in a month?’*assuming those saying ‘don’t always receive one each month’ receive 1 parcel every 3 months 15 Figure 6.16

Magazine subscription volumes 2007 - 2011

Subscription circulation Share of total circulation Subscription circulation (thousands) Share of total circulation 15.0% 8,000 14.4% 13.3% 16 13.6% 14.2% 14 6,000 12 10 4,000 8 7,301 7,241 7,075 6,476 6,480 6 2,000 4 2 0 0 2007 2008 2009 2010 2011

Source: Mediatel/ABC, 6 monthly net average circulation subscription sales 2007-2011

16 Figure 6.17

First and Second Class Stamp prices from 2000-2012

Price (p)

60 60p 50 46p 41p 39p 50p 40 34p 36p 30p 32p 27p 27p 27p 28p 28p First Class 30 36p 30p 32p 20 27p 23p 24p Second Class 19p 19p 19p 20p 21p 21p 10 0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

Source: Royal Mail. Figures are nominal.

17 Figure 6.18 Preferred method of communication with friends and family % of adults who communicate with friends and family

Meet face to face 67

Voice calls on mobile phone 10

Voice calls via fixed landline phone 10

Text messaging 5

Email 2

Instant messaging 1

Social networking 1

Post 1

0 20 40 60 80

Q5a: If you had to pick one method of communicating with friends and family which one would it be? Source: Use of communication services including post research, 2012 Base: all who ever use at least one form of communication to communicate with: Friends and family, n= 2007. Note - other mentions by 1% or fewer included: Emails, social networking, VoiP calls,

18 Figure 6.19 Methods used at least once a week to communicate with friends and family

% of adults

Face to face 86

Text messages 70

Voice call on mobile phone 67

Voice calls on fixed landline 55

Emails 47

Social networking 41

Instant messaging 34

Comments on websites 18

VoIP (e.g Skype) 17

Micro blogging 11

Post (letters/cards/packages) 10

0 10 20 30 40 50 60 70 80 90

Q2a: Devices/ services used Source: Use of communication services including post research, 2012 Base: UK adults aged 16+ who communicate, n = 1980

19 Figure 6.20 Communication methods ever used to send greetings (e.g. birthdays) by age of respondent

58 Post ( letters/cards/packages) 31 77 55 Meet face to face 59 46 36 Text messaging 53 7 All 33 16-24 Voice calls on mobile phone 38 12 65+ 30 Voice calls via fixed landline phone 15 38 21 Any social networking eg Facebook 41 0 20 Any email 16 11 11 Any instant messaging eg MSN 23 1 2 Any comments on website forums 4 0

0 20 40 60 80 100

Q3a: Thinking about personal communications which of these methods do you ever use to – greetings such as birhthday/ get well Source: Use of communication services including post research, 2012 Base: UK adults aged 16+, n = 2012

20 Figure 6.21 Claimed volume of letters sent in an average month

20 or more 1

10 to 20 items 5

5 to 10 items 14

3 or 4 items 19 Average number of letters sent per month = 3.2 1 or 2 items 29

Don't always send post each month 23

Don't send mail 8

Don't know 1

0 20 40 60 80 100 % of consumers

Source: Ofcom Post Omnibus 2011 - fieldwork 1st Dec – 13th Dec 2011 Base: All consumers responsible for sending or receiving post (n= 3621) Question: ‘Approximately how many letters and cards, do you personally send in an average month? This should exclude any items you send from home in connection with running a business, if you do this from home. We will ask about parcels separately.’

21 Figure 6.22 Claimed volume of letters received in an average week

30 or more 2

20 to 30 items 7

10 to 20 items 20 Estimated average number of letters 5 to 10 items 30 /cards received = 8.5 per week or 34 per month

3 or 4 items 18

1 or 2 items 14

Don't always receive post each 8 week

Don't know 1

0 20 40 60 80 100 % of consumers Source: Ofcom Post Omnibus 2011 - fieldwork 1st Dec – 13th Dec 2011 Base: All consumers responsible for sending or receiving post (n= 3621) Question: ‘Approximately how many letters or cards do you receive in an average week? Please don’t include parcels, we will ask you about these separately.’

22 Figure 6.23

Claimed volume of parcels sent in an average month

3 or more items 5

1 or 2 items 14

Don't always send post 50 each month

Estimated average number of parcels Don't send parcels 30 sent = 0.52 parcels per month*

0 20 40 60 80 100 % of consumers Source: Ofcom Post Omnibus 2011 - fieldwork 1st Dec – 13th Dec 2011 Base: All consumers responsible for sending or receiving post (n= 3621) Question: ‘Please now think about the parcels you send. How many parcels do you send in an average month?’ *assuming those saying ‘don’t always send one each month’ send 1 parcel every 3 months

23 Figure 6.24

Claimed volume of parcels received in an average month

10 or more 1

5 to 10 5

3 or 4 10

1 or 2 24

Don't always receive parcels in a 41 month

None/don't receive parcels 18 Estimated average number of parcels received = 1.3 per month*

0 20 40 60 80 100 % of consumers Source: Ofcom Post Omnibus 2011 - fieldwork 1st Dec – 13th Dec 2011 Base: All consumers responsible for sending or receiving post (n= 3621) Question: ‘Approximately how many parcels do you receive on average in a month?’ *assuming those saying ‘don’t always receive one each month’ receive 1 parcel every 3 months

24 Figure 6.25 Volumes of post: by social grade Sending Letters Sending Parcels

% sending 3 or more letters a month % sending 1 or more parcels a month 52 39 30 27 19 12

AB C1C2 DE AB C1C2 DE Receiving Letters Receiving Parcels

% receiving 40 or more letters a month % receiving 1 or more parcels a month 52 39 42 28 24 28

AB C1C2 DE AB C1C2 DE Source: Ofcom Post Omnibus 2011 - fieldwork 1st Dec – 13th Dec 2011. Base: All consumers responsible for sending or receiving post (n= 3621) Question: ‘Approximately how many letters and cards, do you personally send in an average month? This should exclude any items you send from home in connection with running a business, if you do this from home. We will ask about parcels separately.’ ‘Approximately how many letters or cards do you receive in an average week? Please don’t include parcels, we will ask you about these separately.’ ‘Please now think about the parcels you send. How many parcels do you send in an average month?’ ‘Approximately how many parcels do you receive on average in a month?’ 25 Figure 6.26 Volumes of post: by age Sending Letters Sending Parcels

% sending 3 or more letters a month % sending 1 or more parcels a month 50 52 44 45 36 29 26 18 19 20 22 17 14 9

16-24 25-34 35-44 45-54 55-64 65-74 75+ 16-24 25-34 35-44 45-54 55-64 65-74 75+ Receiving Letters Receiving Parcels

% receiving 40 or more letters a month % receiving 1 or more parcels a month

49 50 43 43 32 33 37 36 36 24 26 29 14 17

16-24 25-34 35-44 45-54 55-64 65-74 75+ 16-24 25-34 35-44 45-54 55-64 65-74 75+ Source: Ofcom Post Omnibus 2011 - fieldwork 1st Dec – 13th Dec 2011. Base: All consumers responsible for sending or receiving post (n= 3621) Question: ‘Approximately how many letters and cards, do you personally send in an average month? This should exclude any items you send from home in connection with running a business, if you do this from home. We will ask about parcels separately.’ ‘Approximately how many letters or cards do you receive in an average week? Please don’t include parcels, we will ask you about these separately.’ ‘Please now think about the parcels you send. How many parcels do you send in an average month?’ ‘Approximately how many parcels do you receive on average in a month?’ 26 Figure 6.27 Volumes of post: by rural vs urban Sending Letters Sending Parcels

% sending 3 or more letters a month % sending 1 or more parcels a month 46 39 37 19 19 23

UK Urban Rural UK Urban Rural Receiving Letters Receiving Parcels

% receiving 40 or more letters a month % receiving 1 or more parcels a month 40 40 44 29 29 32

UK Urban Rural UK Urban Rural Source: Ofcom Post Omnibus 2011 - fieldwork 1st Dec – 13th Dec 2011. Base: All consumers responsible for sending or receiving post (n= 3621) Question: ‘Approximately how many letters and cards, do you personally send in an average month? This should exclude any items you send from home in connection with running a business, if you do this from home. We will ask about parcels separately.’ ‘Approximately how many letters or cards do you receive in an average week? Please don’t include parcels, we will ask you about these separately.’ ‘Please now think about the parcels you send. How many parcels do you send in an average month?’ ‘Approximately how many parcels do you receive on average in a month?’

27 Figure 6.28 Class of letters and time critical posting Use of first and second class for Proportion of letters sent that need letters to arrive next day

Source: Ofcom Post Omnibus 2011 - fieldwork 1st Dec – 13th Dec 2011 Source: Ofcom Post Omnibus 2011 - fieldwork 1st Dec – 13th Dec 2011 Base: All consumers responsible for sending or receiving post (n= 3621) Base: All consumers responsible for sending or receiving post (n= 3621) Question: ‘When sending letters/cards which do you use? (Answers on a Question: ‘And what proportion of these letters/cards have to be at their showcard) destination the next working day? (Answers on a showcard)

28 Figure 6.29

Claimed experience of problems in last 12 months

Any problem 56

Misdelivered mail 41

Delayed mail 20

Lost mail 18

Damaged mail 14

Other 5

0 20 40 60 80 100 % of consumers Source: Ofcom Post Omnibus 2011 - fieldwork 1st Dec – 13th Dec 2011 Base: All consumers responsible for sending or receiving post (n= 3621) Question: ‘In the last 12 months have you experienced problems with Royal Mail’s service in terms of…(READ OUT ITEM)?’ ‘Did you make a complaint to Royal Mail about its services?’ (n=2029)

29 Figure 6.30

Views on post and other means of communication

% of people saying that a statement applies to them. NB percentages add to more than 100% as more than one statement can apply to a respondent. 30

Reluctant Some preference for Some preference for post use Emotional written post attachment to post

‘I prefer to send 34% ‘It’s worth sending a 27% 33% ‘I love to send and I prefer to send letter for important 38% letters or emails to receive letters and cards’ emails than letters companies rather than communications’ whenever possible’ make a telephone call so 21% ‘I would feel cut off 13% ‘I frequently use post that I have a written from society if I can’t ‘I only use post when when I can use other 21% record’ sent/don’t receive post’ there is no alternative’ methods’

Source: Ofcom Post Omnibus 2011 - fieldwork 1st Dec – 13th Dec 2011 Base: All consumers responsible for sending or receiving post (n= 3621) Question: ‘Which of these statements apply to you?‘ (answers on a showcard)