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Media nations: UK 2019 Published 7 August 2019 Overview This is Ofcom’s second annual Media Nations report. It reviews key trends in the television and online video sectors as well as the radio and other audio sectors. Accompanying this narrative report is an interactive report which includes an extensive range of data. There are also separate reports for Northern Ireland, Scotland and Wales. The Media Nations report is a reference publication for industry, policy makers, academics and consumers. This year’s publication is particularly important as it provides evidence to inform discussions around the future of public service broadcasting, supporting the nationwide forum which Ofcom launched in July 2019: Small Screen: Big Debate. We publish this report to support our regulatory goal to research markets and to remain at the forefront of technological understanding. It addresses the requirement to undertake and make public our consumer research (as set out in Sections 14 and 15 of the Communications Act 2003). It also meets the requirements on Ofcom under Section 358 of the Communications Act 2003 to publish an annual factual and statistical report on the TV and radio sector. This year we have structured the findings into four chapters. • The total video chapter looks at trends across all types of video including traditional broadcast TV, video-on-demand services and online video. • In the second chapter, we take a deeper look at public service broadcasting and some wider aspects of broadcast TV. • The third chapter is about online video. This is where we examine in greater depth subscription video on demand and YouTube. • In the last chapter we tune into radio and put it in the context of other audio services, including podcasts and music streaming services. 1 Contents Overview............................................................................................................ 1 Executive summary ............................................................................................ 3 Total video and broadcast TV ......................................................................................................... 3 Radio and audio .............................................................................................................................. 8 Total video ....................................................................................................... 11 Introduction .................................................................................................................................. 11 Platform and device ownership .................................................................................................... 12 Viewing .......................................................................................................................................... 15 Revenue ........................................................................................................................................ 25 Broadcast TV and PSB ...................................................................................... 28 Introduction .................................................................................................................................. 28 Viewing of broadcast TV ............................................................................................................... 29 Audience attitudes and sentiment................................................................................................ 34 Broadcast revenues, content output and spend .......................................................................... 43 Co-productions and the impact on genres ................................................................................... 54 Online video ..................................................................................................... 59 Video on demand (VoD) ................................................................................................................ 59 YouTube ........................................................................................................................................ 70 Awareness of online audio-visual regulation and levels of offence ............................................. 76 Radio and audio ............................................................................................... 78 Introduction .................................................................................................................................. 78 Radio and audio listening .............................................................................................................. 80 The UK radio industry ................................................................................................................... 89 Developments in digital radio ....................................................................................................... 92 Audio on demand: music streaming ............................................................................................. 96 Audio on demand: the rise of podcasts ........................................................................................ 99 2 Classification: HIGHLY SENSITIVE Executive summary Total video and broadcast TV The pace of change in television raises questions about how UK viewers will be served in the future Online content delivery and the emergence of global video providers, notably Netflix and YouTube, are driving fundamental shifts in viewing habits and industry structures. The internet is massively increasing the choice available to UK viewers. More than half of UK households now have their TV connected to the internet and eight in ten adults have a smartphone, which they are increasingly using to watch video. Around half of UK households now subscribe to at least one subscription video-on-demand (SVoD) service (such as Netflix or Amazon Prime Video) and UK adults watch, on average, about half an hour of YouTube per day. Broadcast television, and public service broadcasting in particular, remains valued and accounts for the majority of people’s viewing, but its use is falling as viewers take up online services. People watched on average 3 hours 12 minutes of broadcast television in 2018, but this was 49 minutes less than in 2012, and the fall in younger viewers has been much steeper. Four in ten viewers now say that online video services are their main way of watching television and film. Our data provides an evidence base to underpin a national debate about the future of Public Service Broadcasting (PSB). In July 2019, we launched a nationwide forum, Small Screen: Big Debate. This will involve discussions with broadcasters, production companies, government, industry bodies, viewers’ groups and national and regional representatives on sustaining public service broadcasting (PSB) in future. It will look at where PSB content should be available, who should provide it, and how to guarantee a mix of high-quality UK content online. 3 Viewer behaviour continues to shift towards alternatives to broadcast TV, in particular online video services Broadcast still accounts for the majority of viewing, but the decline in viewing is accelerating. Broadcast content accounted for 69% of the average five hours of watching video per person per day in 2018 (but only 56% of the five hours was live TV). People watched an average of 3 hours 12 minutes of broadcast television a day, 11 minutes less than in 2017 (which was down by 9 minutes since 2016). The shift is most pronounced among young people: 16-24s watched an average of 85 minutes of broadcast television a day in 2018 – 15 minutes less than in 2017. Average daily minutes viewed per person, by age 75+ 342 349 338 333 65-74 311 55-64 269 277 242 45-54 234 216 All individuals (4+) 199 of viewing per day 192 169 35-44 151 156 25-34 minutes 122 85 16-24 77 Children (4-15) Average Average 2010 2011 2012 2013 2014 2015 2016 2017 2018 Source: BARB. Since 2017 viewing by all people of subscription video on demand (SVoD) (+7mins) and YouTube content (+6 mins) has grown. The four and a half hours of total video content watched by 16-34s includes three main components: Live TV (83 mins); YouTube (64 mins) and SVoD (52 mins). For the youngest adults (aged 16-24), the most-watched platform is YouTube (73 mins). 4 Total video minutes per person per day, adults 16-34, all devices: 2018 Source: Ofcom total AV modelling using BARB, TouchPoints and Comscore data. Viewers are broadly satisfied with the quality of broadcast TV, but increasingly see video on demand as the main way to watch TV and film. The fall in broadcast viewing does not appear to be caused by negative sentiment towards broadcast TV. More than half of adults feel the quality of broadcast TV programmes has remained the same over the past year, and a further 21% think it has improved. But 42% of adults consider online video services to be their main way of watching TV and film, and 38% of SVoD users can imagine not watching broadcast TV at all in five years’ time. YouTube is a major part of total video viewing and total online time. Twelve per cent of all time spent watching video, and 13% of all time spent online by adults, is spent on YouTube. Young adults (16-34s) spend over an hour on YouTube per day, and almost all adult internet users watch YouTube videos. Whereas most viewing of SVoD is on television sets, a smartphone is the most commonly used device for watching YouTube. There are considerably more SVoD
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