Viewing habits are changing but live is still central to the TV experience

Television’s biggest shows are amongst the most timeshifted, and therefore have an outsized impact on the decline of live viewing debate

Viewing—not just of news and sport—is still overwhelmingly live, despite differences across genres and broadcasters

Across a range of genres, distinct local programming skews in popularity with the regional audiences it reflects. For example, Derry Girls’ viewing share in Northern Ireland is over 40% higher than across the rest of the UK.

However, market forces have cemented the dominance of London and the South East in terms of television production.

Moving more Public Service Media activity outside the M25 will rebalance production away from London, help fulfil a key commitment to serve all UK audiences, and differentiate PSM content from international services.

The press industry lost £1 billion off the topline from the calamitous decline in print revenues due to pandemic-related mobility restrictions, partly offset by gains on digital subscriptions, much harder to precisely size in revenue terms.

Trapped at home for the most part, online traffic to BBC News and news publisher services boomed. Popular news sites marginally grew digital advertising while the quality nationals attracted 800,000 new paying subscribers to reach nearly three million in 2020.

The outlook for 2021, in the transition to the ‘new normal’, is mixed. Consumer work patterns and news, information and entertainment habits are unlikely to ‘bounce back’ to pre-pandemic levels, placing free commuter titles at particular risk. Signs of confidence through online innovation are welcome.

The launch of the BBC’s blueprint for its approach to the Nations and Regions is timely, coinciding with the kick-off of negotiations over the BBC’s financial settlement for the next charter period.

If the licence fee were to be frozen or only an inflationary increase applied, by 2027 the BBC’s annual licence income would be £302-539 million lower in real terms. Just to maintain the BBC's current levels of funding, it would need an inflationary increase, plus an annual increase of 2.0%.

The BBC's commercial ventures are unlikely to cover any shortfall in licence fee income. To generate sufficient dividends to cover the shortfall for the PSB group, income produced by BBC Studios (and the BBC’s other commercial ventures) would need to grow by an order of magnitude.

Advertising income has been the lifeblood of commercial TV for decades, but declining linear audiences—combined with digital video alternatives—mean the TV advertising model must evolve to ensure it remains as potent a medium for brands as ever.

Lack of effective audience measurement and somewhat opaque advertiser/agency/sales house relationships are hampering linear TV advertising revenues. Both issues need resolving to underpin a healthier ecosystem overall.

Flexibility is key to this evolution. A move to audience buys across most linear and BVOD inventory would provide greater flexibility and targeting for advertisers, and would sit alongside some premium context buys. A greater onus on volume deals would give broadcasters more certainty to invest in content and their advertising propositions.

Spotify paid $5 billion in royalties last year to the music industry. Critics claim the $0.0038 per-stream average royalty rate is too low. However, this is largely due to high volumes of ad-funded listening, a core part of Spotify’s freemium model, and a defence against piracy. 

To silence the critics, the “Spotify Loud & Clear” site presents data on the distribution of industry royalties, which are heavily skewed to established artists. Only the top 5% of artists generate annual industry royalties above $1,000, though they take home less under their deals. 

The remaining 95% of artists on Spotify generate under $1,000 a year and use the platform mainly to reach fans that attend live gigs, their primary source of income, now halted by the virus. These artists’ problem is digital discovery, as Spotify’s playlists push hits rather than the midlist. 

The pandemic has caused an unprecedented demand boom and revenue windfall for the games industry, allowing developers to ease production bottlenecks, assist remote working, and spend more cash on games that matter.

Producing quality game experiences remotely—from greenlight through to release—has driven innovation and flexibility, and much needed change for game studios.

Most large game developers expect a return to in-studio development late in Q3 2021. Many workers hope a return will not also bring back toxic game production environments.

This report is free to access.

The Creative Industries accounted for 6% of UK GVA in 2019, more than the automotive, aerospace, life sciences and oil and gas industries combined. The UK’s Creative Industries are the largest in Europe and are central to promoting the UK’s soft power globally.

At the core of the creative economy is the AV sector, which, in turn, is driven by the UK’s PSBs. In 2019, the PSBs were responsible for 61% of primary commissions outside London and are the pillar upon which much additional regional economic activity depends.

Going forward, only the PSBs are likely to have the willingness and scale to invest in production centres outside London with sufficient gravitational pull to reorientate the wider creative economy towards the nations and regions.

This report is free to access

Climate change is a core theme of this year’s Media and Telecoms 2021 & Beyond Conference, linking to the UK's presidency of COP26 in 2021, the UN’s 26th climate change conference.

Since 2015, the Paris Agreement frames mankind’s collective effort to address climate change by reducing emissions of harmful greenhouse gases (GHG), to limit warming to well below 2°C above pre-industrial levels, aiming for 1.5°C. The UK is committed to achieve this target and seeks, alongside other nations, to reduce its GHG emissions to net zero by 2050.

The UK, like other participants, will deliver net zero through mandatory carbon footprint reduction activities, an important component of which are businesses. This report profiles the carbon footprints of companies in the TMT sector, which are light in the case of most media companies, and heavier for telcos, which build and run network infrastructure.

An easy win we advocate for the TMT sector is to adopt a hybrid model for work on the back of pandemic-related work-from-home (WFH) practices, reducing office estates and commuting, permanently cutting the footprint.

The pandemic shows working from home is economically feasible in the UK, thanks to telco networks, platforms and services, disproving employers’ largely negative pre-existing views. WFH will also add value to office workers, about half of which support a hybrid model for the future. It liberates precious time from the commute, makes the office integral to value creation, and prevents carbon from being wasted.

Growth in the UK production sector is being driven by increased investment by American streaming services, while local broadcasters rely on co-productions to fund increasingly-expensive, high-end content. 

However, while this investment is welcome, our analysis shows that the output is predominantly less ‘British’ than that commissioned directly by local broadcasters.

Distinctive and diverse British cultural touchpoints are created or perpetuated by television. Current trends suggest a dilution of this, a globalisation of local content, and perhaps less relevance to British viewers.