Linear TV is ageing, and the largest channels are ageing fastest. There is an ongoing double-whammy effect of a growing older population, and the loss of younger viewers to social media and SVOD services.

The PSBs are suffering more than most, especially the BBC channels. 31% of the population is aged 55+, but over 60% of viewing to BBC1 and BBC2 is by those aged 55+.

The trend can be halted, and even reversed to some degree. There is no inevitability to this ageing process, but it will take concerted efforts to fight it.

Sky maintained strong revenue growth of 5% in 2017/18, with EBITDA and operating profit both bouncing back into strong positive territory after the UK Premier League rights hit of 2016/17

The UK grew revenue well and profits better; Italy performed well and should improve much further given the retreat of its principal competitor; Germany is more challenged, but extra content investment may aid sustained growth

Sky is proving adept at managing content costs and revenue in a changing environment, with investment, cost control and monetisation all being put to effective use as the content type demands it

The UK continues to lead the EU5 in take-up and consumption of video-on-demand services, with close cultural alignment and a historic williness to pay for TV content making it a receptive home for US SVODs

Netflix dominates in most markets, benefiting from high-profile US imports and big-budget local productions. Local SVODs are struggling, with those operated by FTA broadcasters facing considerable challenges

Collaboration between local broadcasters and pay-TV platforms is essential if they are to hold at bay the threat of Netflix and co., with an increasingly favourable regulatory environment opening the door for unprecedented collaboration

We interviewed the biggest hitters in the UK television production sector, asking them about the current issues affecting their industry, such as consolidation, Peak TV, and Nations and Regions quotas

Most pertinent, however, was the production sector’s relationship with the new buyers—Netflix, Amazon, Apple et al.—and how their approach to them differed for each one, as well as traditional broadcasters when pitching, negotiating deals or producing programmes

With views anonymised for candour, this report is an honest representation of an industry where quality and volume are both at an all-time high, despite the challenge of change brought about by these new players

Sky H1 results were very solid, maintaining 5% revenue growth and 10% EBITDA growth, with Sky continuing to support a widening product portfolio and more expensive core products with strong cost control and execution

Subscriber volume growth was a little weak at the margin, but this will be helped by all-IP products expanding the economically addressable base in new, and existing, markets 

There remain questions on content, with the outlook for premium football rights uncertain in the UK and Italy, and investment in Originals questionable given a mixed track record, but certainly with upside

2012 has been a year of two halves, with TV NAR up by 2-3% in H1, plus the feel good factor of the Diamond Jubilee and London Olympics, but down by 1-1.5% across the full year as economic conditions have worsened in H2 2013 and 2014 promise to be especially taxing times with significant downside risks due to weakness in the economy, the squeeze on consumer disposable income and beginnings of real fiscal austerity On the upside, we expect negative structural pressures, caused by increases in CI delivery and online growth, to subside and conditions to improve from 2015

The linear TV broadcast industry has kept its oligopolistic structure remarkably intact over the last 50 years against a background of much technological innovation and re-regulation, but now faces a new wave of innovation that promises growth of non-linear at the expense of linear True disruption can only occur by solving the device challenge of developing on a mass scale new, compelling and innovative ways to access content, but so far non-linear has achieved a very small share of total viewing while linear viewing levels are as high as ever Although non-linear viewing may become substantial, it is unlikely to result in fundamental change in the distribution value in the industry

YouView, the hybrid DTT/IPTV service backed by the public service broadcasters, is here, but with an initial retail box price of £300 it will be heavily dependent on the subsidies offered by ISP distributors BT and TalkTalk The TV market has evolved since YouView’s conception in 2008, with many other internet-enabled options now available; its managed and integrated approach gives it some advantages but doesn’t make it a ‘must have’ We expect YouView to mainly appeal to Freeview and BT Vision upgraders and project take-up between 1-3 million TV homes by 2015, though if the product improves and pricing falls dramatically it could see faster growth

News Corp will split publishing out of its business by creating a company to include newspapers in the US, UK and Australia as well as book publisher HarperCollins News Corp revenue growth has for some time been driven by explosive growth in cable network programming revenues, with slower revenue growth in film, TV, satellite TV and publishing The structural decline of print-based businesses is the main reason cited for the split. However, the Dow Jones and WSJ, both serving a B2B market, will be at the heart of the new publishing company’s value

Further sharp year-on-year declines in viewing share by the leading commercial PSB channels, ITV1 and Channel 4, in Q1 2012 run contrary to the general stabilisation of viewing trends as Digital Switchover nears completion

The Channel 4 decline is more easily explained by exceptional factors, while closer examination of NAR trends suggest that ITV Family NAR has performed less well in recent quarters than results releases suggest

Once past Digital Switchover, digital convergence trends appear less of a threat towards the future stability of ITV and Channel 4 family viewing trends than the competitive threat from Sky as it raises its investment in UK programme origination