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BARB data indicates that the amount of average daily TV set viewing to linear TV channels is continuing to fall: the pie is shrinking. Just under 20% of TV set usage so far in 2017 is to non-linear activity, and viewing to SVOD services and YouTube is likely to account for most of this growth in 'unmatched' viewing

The pie is shrinking faster amongst younger audiences: just under one third of TV set usage is 'unmatched' now for 16-34s. However 35+ unmatched use is growing at a faster rate than 16-34 unmatched use in 2017

Within this smaller pie, the PSB channels continue to hold share of viewing against pay channels. Within the PSBs, ITV and the ITV digital channel family have gained most share so far this year, although BBC1 is having a strong autumn in spite of the loss of Great British Bake Off to C4

Public service broadcasting (PSB) and the entire unique broadcasting ecosystem face huge challenges from global tech giants with deep pockets, data insights and scant regard for PSB prominence

All three pillars of the PSB model are threatened: content supply, distribution and advertising. The further threat of digital terrestrial TV (DTT) spectrum being reduced or turned off in c.2030 is real and PSBs must have a migration path in place

PSBs can counter some challenges through increased investment in content relevant to the UK consumer. But, recognising the aligned interests with pay-TV platforms of Sky and Virgin Media, collaboration between the parties is integral to the long-term future of PSB

Across Europe, markets are becoming more competitive. Incumbent pay-TV paltforms (e.g. Sky or Canal+) face increasing threats from both internet-based services (e.g. Netflix and Amazon), and telecoms operators

Telecoms providers are proving the most potent challengers as they enter the premium football rights market to create attractive triple and quad play bundles – examples include BT, SFR and Telefónica. The latter is now the main pay-TV operator in Spain whereas France’s Canal+ has entered into a strategic alliance with Orange

Across the top five markets (UK, France, Germany, Spain, and Italy), Sky remains the leading operator with an estimated 21.5m video subscribers, twice as many as Netflix

 

The US scripted content boom is spilling over into Europe: Free-to-air TV drama ratings have proven resilient but as costs and audience expectations have risen budgets are under pressure, necessitating flexible co-financing arrangements with American broadcasters, and Netflix and Amazon. Pay channels have boosted output—with uneven results

Long-term IP control is a key factor behind independent production consolidation, led by broadcasters seeking a secure stream of content and diversification away from advertising

Notable developments include the new wave of Berlin-based, internationally-financed series, the rise of domestic French content and Sky Italia’s edgy originals, Telefónica’s giant leap into Spanish dramas, and the continuation of Britain as an export powerhouse

The debate over the entitlement of free-to-air PSBs to retransmission fees from pay-TV platforms has simmered for the last few years, yet promises to boil over once the Digital Economy Act 2017 (DEA 2017) comes into force; as expected in late July/early August

The repeal of section 73 of the Copyright Designs and Patents Act 1988 (CDPA 1988) has removed a barrier to negotiations between the PSBs and the cable operator Virgin Media over retransmission fees, seen by some as the thin end of a wedge for obtaining such fees across all pay-TV platforms

However, pressing for retransmission fees could have the opposite effect of what the PSBs – in particular the commercial PSBs – wish for, threatening as it does to undermine the principles of universality and free access at the point of use, so long the bedrock of public service broadcasting in the UK

Our latest forecasts point to the continued strength of DTT within the UK broadcast market. We predict DTT-only homes will account for 42% of TV viewing ten years from now, up from 38% today.

Much of this is due to the UK’s ageing population profile, since DTT skews older. The number of over-45s in DTTonly homes is set to increase by 13% by 2026.

The other key factor is the continued growth of flexible pay-lite services—for example, Netflix and NOW TV— which are of greater appeal to younger audiences.

The past 14 months have seen a flurry of activity from the major UK television platforms, with all but one releasing a revamped version of their television offering; a neccessary reaction to the rise of VOD consumption and the threat this poses to traditional models

The result is 'connected' offerings, with the major players aiming to exploit the impact of this technology by seamlessly integrating on-demand capabilities, and in doing so mitigate the further shockwaves resulting from its emergence

No offering is likely to single-handedly alter the current subscriber landscape radically; with the pay platforms' each taking a unique—and to a degree—entrenched path that affirms its core consumer base, the greatest shifting of sands will likely come from changes in consumer trends or content quality