Market revenue growth was just positive at 0.2% in Q2, as lower price increases were mitigated by some temporary ARPU gains.
Growth is likely to drop negative in the rest of year however, with continued weak volume growth compounded by temporary ARPU gains unwinding.
Pricing structures differ quite widely as regards landline offers and out-of-contract pricing, and all could benefit from adopting best practice, a marginal gain worth pursuing in a tough market.
We forecast broadcaster viewing share to drop to 52% in 2030 (from 58% in 2023), with the firming of its on demand viewing unable to balance out the decline of live: this is a slight improvement on our past estimates, with decline slowing.
SVOD viewing will begin to plateau in 2025, as video sharing platforms (YouTube, TikTok, Twitch) take an increasing share of engagement.
On the TV set, YouTube will grow strongly: we predict a 90% increase from 2023 to 2030. This is from a low base with broadcasters retaining 70% of viewing on the main screen in 2030
Off the back of the Euros, ITV’s advertising revenue grew in H1 (+10% to £889 million) but this was not enough to balance a drop in Studios revenue, which declined 13% (to £869 million), hit by phasing and a tough market
Nonetheless, profits were up on a very tough 2023, with group adjusted EBITA rising 40% to £213 million, as cost-cutting proved successful—total costs were down 7% YoY
ITVX is moving from its launch phase to one of consolidation, with a changing approach to content release and an increasingly nuanced relationship with its array of users
Live sport is the most resilient component of broadcast TV, with viewing almost flat as other genres suffer steep declines.
Football has extended its lead as the most-watched sport, amid record Premier League audiences, while cricket has overtaken rugby and tennis for second place.
The reach of sport on pay-TV has remained strong despite consumer spend pressures, further eroding free-to-air’s share of sports viewing.
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The UK charity sector’s role in sustaining the fabric of communities is increasingly important as poverty spreads during the worst cost-of living crisis since the 1970s, at the same time as donations are weaker and costs are rising.
Media play a crucial role in raising the awareness, engagement and donations to charities by individuals, the bedrock of income. Selected case studies of TV, radio and the press show how charities leverage their unique qualities to engage audiences across the UK.
We highlight Gordon Brown’s landmark anti-poverty community-based Multibank initiative, which gifts essentials to those most in need, and has vital support from Sky, the Financial Times and News UK.
Market revenue growth was maintained at 1.6% in Q4, helped by strong underlying ARPU, mitigated by weak volume growth.
Lower price rises will likely slow market revenue growth by c.1-2ppts next quarter, with BT being slowed the most at c.5ppts.
The market is being hit by lacklustre demand, growing altnets and persistent price competition, with these factors likely to persist in the short term.
Market revenue growth was solid at 1.6% in Q4, but subscriber volumes were weak, and ARPU was supported by price rises.
Price rises will be much lower in 2024, with no ease in sight for volume growth, which will likely lead to much lower or even negative revenue growth.
The altnets are adding significantly to incumbent pressure, and their consolidation may ease or worsen this depending on its form.
Direct greenhouse gas emissions from the UK telecoms sector equate to around 0.1-0.3% of the UK total. Most operators have set targets to reach net zero across their direct emissions in the next 10-20 years, with the move to electric vehicles an obvious win.
Network upgrades to 5G and fibre have the potential to cut emissions from electricity by a factor of 10, and consolidation offers further decarbonisation upside.
The industry could enable emissions savings in other sectors equivalent up to 30x its own by averting the need to travel and through IoT applications, with the latter requiring careful commercial assessment given the financial constraints in the industry.
As viewing moves online, broadcasters’ on-demand players make up a growing proportion of viewing, becoming central to their future strategies.
However, even though SVOD viewing might have begun to plateau, BVOD growth cannot yet balance the decline of linear broadcast.
Of this shrinking pie, 2023 saw most of the major broadcast players increase their viewing shares.
While altnets continued their strong expansion in 2023, a slowdown in 2024 is looking very likely, with financing drying up due to tougher financial conditions and disappointing operating performances from some.
Consolidation is the obvious answer, and the altnets could consolidate into a pure wholesaler (via CityFibre), a retail/wholesale player, or could be absorbed into VMO2/nexfibre.
Which of these routes is taken, and how quickly, will have a profound impact on the structure of the industry, and all players should be careful what they wish for, with long-term outcomes hard to reliably predict in such a complex marketplace.