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Video-On-Demand Continues to Grow in the UK

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Video-On-Demand Continues to Grow in the UK Factsheet 7 – Video on demand Ofcom Oxford Media Convention 2 March 2016 This factsheet has been compiled by Ofcom and provides some background information to aid discussion at the 2016 Oxford Media Convention. It focuses on video on demand (VoD) and provides an overview of use of VoD in the UK. The following slides contain data published in Ofcom’s CMR 2015 Report. 2 100 but at a slower rate slowerat a but Video • 20 40 60 80 0 Figure Figure are used the least among adults among least the used are 15 ten in seven around 2015 H1 VoD in growth the 2015 H1 and 2014 H1 between However, available. services likely is growth Since Base: GB adults aged Base:adults aged GB 2010 15+, H1 n=12226, 2013 H1 n=11853, 2014 H1 n=11657, 2014 H2 n=12849. Source: 27 41 varies 1 Kantar Kantar TGIMedia 56 H1 - – on 57 Reach of Reach 58 2010, by by 29 - demand demand 44 age to have been driven driven been have to reach of reach 61 61 VoD 62 group. 25 H1 2010 H1 38 months 12 past the in services VoD 52 of use highest the have 35 under adults trends, historical with Consistent 53 54 This over. and 15 aged UK adults of 58% reach to 31pp by grown has services continues to grow in the in growto continues - 35 65 aged 24s and 25 and 24s 59 by the increased take increased the by 74 2013 H1 70 72 +, with one third doing so. doing third one with +, 35 50 - 66 the in it used have to claimed 34s 71 71 2014 H1 34 48 69 68 - 69 of range the and devices connected of up 29 2014 H2 43 57 58 61 19 31 H1 2015 H1 49 VoD 48 UK, 50 past was was 9 22 12 months. 12 32 of Use 2pp). (up slower 31 33 31 44 60 61 VoD 62 VoD VoD 22 services 38 and in and 3 52 53 53 BBC iPlayer is still the most popular VoD service among UK adults • 32% of UK adults claimed to have used the service in the past 12 months, as of H1 2015 (Figure 2). Sky has the second largest reach in the UK, with 17% of adults using the service. Its popularity may be due to its wide box-set library (containing acclaimed US dramas) and Sky’s deal with film studios, enabling the latest movies to appear on Sky Movies sooner than other rival VoD services. Similar proportions of respondents (15%) used All4 and Netflix. Figure 2 – Reach of selected VoD services over time Proportion watching VoD services in past 12 months (%) 35 32 30 25 20 17 15 15 1315 10 10 8 5 3 0 H1 2010 H2 2010 H1 2011 H2 2011 H1 2012 H2 2012 H1 2013 H2 2013 H1 2014 H2 2014 H1 2015 BBC iPlayer ITV Player 4oD/All 4 Demand 5 Sky (all) Amazon Prime Netflix Now TV Source: Kantar Media TGI Base: GB adults aged 15+, all devices. Reach refers to use in previous 12 months H1 refers to January – June, H2 refers to July - December 4 The take-up of over-the-top SVOD services has also increased • According to BARB’s Establishment Survey, over 4.3 million UK households had a paid subscription to Netflix in Q1 2015 (up 36% since Q1 2014). The number of UK households subscribing to Amazon Prime has fluctuated but still remains lower than 1.5 million households, while take-up of Sky’s NowTV service increased to ~500,000 households in Q1 2015. In absolute terms, the number of households with Netflix and NowTV subscriptions have increased each quarter between H1 2014 and H1 2015 Figure 3 – Subscription VoD service take-up, by household Subscription-VoD service take-up (HH) Universe (000s) 6,000 Q1 2014 5,066 5,000 4,372 Q2 2014 4,000 3,702 Q3 2014 3,000 2,791 Q4 2014 2,000 Q1 2015 1,371 1,217 1,072 1,155 Q2 2015 1,000 523 590 239 327 Q3 2015 0 Netflix Amazon Prime Instant Video/LoveFilm Now TV Source: BARB Establishment Survey Q1 2014 – Q3 2015. *Q – Do you or anyone in your household, subscribe to any of the following…? (LoveFilm/Amazon Prime Instant Video; Netflix; NowTV) . Note: subscription numbers potentially may include households currently on free trials. There may be overlaps in each type of subscription home 5 Access to back-catalogue content is the most common reason for use of SVoD • Among Amazon Prime and Netflix users, the most popular reasons given were access to back-catalogue film and TV content, and access to new film releases. Figure 4 – Reasons for using Amazon Prime Instant Video / Netflix Netflix Amazon Prime 63 To access back-catalogue of films 60 47 To access back-catalogue of TV programmes 42 42 To access catalogue of new film releases 45 37 To watch at a time that suits 35 30 To watch multiple episodes in a row 25 28 Cheaper than renting/buying DVDs/Blu-ray discs 27 28 To watch programmes missed when initially broadcast 28 27 To watch programmes wanted to see again 23 24 To watch something different to content on main TV 24 24 To watch original series made by provider 15 23 Cheaper than pay TV subscription 22 21 To watch a specific programme 20 20 To watch exclusive content not available elsewhere 14 18 To watch content suitable for children 14 0 10 20 30 40 50 60 70 Proportion of subscribers (%) Source: Ofcom CMR 2015, GfK SVOD Tracker, Pilot Wave, Q1 2014 Base: All Amazon Prime Instant Video / Netflix users 6 Film content was the most popular type of content consumed among monthly paying subscribers to VoD services. • Among monthly subscribers, 75% watched film content. American programmes/series was the second most popular category (49%) while British programming was consumed by 37% of subscribers. Just under a third (31%) consumed original programming from the service. Figure 5 – Programmes watched, among subscribers to VoD services with a monthly subscription Proportion of subscribers (%) Films 75 American programmes/series 49 British programmes/series 37 Original programming from the service 31 Children's programmes 23 Other 6 Don't know 4 0 10 20 30 40 50 60 70 80 Source: GfK NOP omnibus, April 2015. Base: all who have a subscription to services (402) QH, which of these types of programmes do you or your family watch through (name/s of on-demand subscription services). 7 Viewing of paid-for VoD services make up a minority of total viewing time Figure 6 – Proportion of viewing activities, % of total Average time viewing time, by age spent* hours:mins • Just 3% of total viewing time among UK adults aged 16 and over was spent watching paid-for 65+ 82% 12% 3%1%2% 4:37 VoD content. UK adults spend more time viewing content on the DVR (16%), free VoD 55-64 80% 13% 3%2%2% 4:39 services (5%) and physical media (5%). Across all age groups, most viewing is still to traditional 45-54 69% 20% 4%2% 4% 1% 4:32 TV. However, audiences are increasingly using many other forms of video; DVR and on- 3:52 demand viewing has gained traction among all 35-44 67% 17% 7% 3%5% 1% age groups. 25-34 61% 18% 6% 6% 7%2% 3:53 • The 16-24 group is of particular interest, as their viewing time is evenly split between viewing TV 16-24 50% 16% 7% 6% 13% 8% 4:14 content at the time of broadcast and viewing content outside the linear TV schedule. They Adults 69% 16% 5%3% 5% 2% 4:18 spend more time watching DVDs/Blu-rays than aged 16+ any other age group (13%) and are alongside 0% 20% 40% 60% 80% 100% the 25-24s in spending the most time watching paid-for VoD (6%). Also, they consume more TV (live - at the time it is broadcast, including red button) short-form content than any other age group (at 8%). This is likely to reflect the widespread take- Recorded TV (programmes/films on PVR) up of connected devices among this age group, On-demand/catch-up TV or films (free) e.g. BBC iPlayer, 4oD, Sky on as these devices are better suited to this Demand) particular activity. Download or stream TV or films (paid for) e.g Netflix, iTunes, Blinkbox TV or films on DVD, Blu-ray. VHS video Source: Ofcom Digital Day 7=day diary 2014 Base: all aged 6-11 (186), 11-15 (173), 16-24 (101), 25-34 (225), 35-44 (348), 45-54 (400), 55-64 (311), 65+ (259). *Average time spent is the total average daily time spent watching media, including simultaneous activity 8 Viewing of traditional TV has decreased • In 2015, the average number of minutes of broadcast TV viewing on a TV set was 3 hours 36 minutes per person (aged 4+) per day (Figure 7). This was down by 4 minutes (1.9%) year on year and continues the decline in traditional TV viewing seen since 2012, but it has slowed, compared to a 3.7% drop between 2012 and 2013 and a 4.9% drop between 2013 and 2014. Average daily viewing has fallen across all age groups during the five years to 2015, with viewing among the under-45 age groups (including children) falling every year since 2010. The greatest absolute decline in TV viewing compared to 2010 was among 16- 24s (-45 mins), followed by adults 35-44 (-40 mins), and children (-39mins).
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