The pandemic years boosted many businesses selling services on subscription in the UK: work-from-home gave people more time and money to widen the services they enjoyed in the home, such as gaming, entertainment and music, also boosting engagement with trusted news

The cost-of-living crisis dented the number of subscribers to OTT SVOD and news services in Q2 2022. Broadband and mobile are must-have; bundles of services (e.g. Sky’s pay-TV and broadband or mobile) are more resilient; yearly and multi-year contracts prevent churn relative to monthly contracts; and services that cater to passions (e.g. football) are always need-to-have

Subscription (or supporter) media and news services reaped the demand for trusted news through the pandemic, but now face a tough challenge to their toplines from the economic downturn—and also to transition to a sustainable business model for media audiences, while advertisers are also feeling the heat

The UK's cultural industries remain the strongest in Europe and digital distribution is a strong vector for the globalisation of British culture

The international reach and reputation of UK news providers is unparalleled, with the BBC, the largest news provider globally, reaching half a billion users weekly

Independent commissioning drives a dynamic ecosystem of TV exports with global clout—worth an estimated £3.4 billion—that remains stable despite Brexit

Alongside freezing the licence fee for the next two years, the government made it clear that it believes the fee is no longer the optimal mechanism to fund the BBC, demonstrating a willingness to remove it in 2028

What seems to be the government's preferred replacement, a subscription, is not ideal: there are structural issues that mean it would not be possible to have a service that all could subscribe to without a costly switchover

Furthermore, a subscription would undermine a number of tenets of public service broadcasting, most notably universality, breadth of programming and representing the diversity of Britain—naturally a subscription service would pivot to commercially efficient content that targets its subscribers and those most likely to subscribe

Fuelled by savings piles accumulated under work-from-home (WFH) and asset price inflation, the strong recovery of private consumption in H2 2021 from the depths of successive lockdowns drove spectacular growth in UK display advertising, up by 24% on 2020 to £16 billion, noting base effects from the dramatic plunge in 2020

With consumers largely WFH in 2021, TV soared 25%, online 28%. Spend on cinema and out-of-home (OOH) in 2021 remained well below 2019 values. In-home goods and services have been strong while those consumed OOH are weak. Government spend on public health messaging remained high in 2021

Private consumption, now also impacted by CPI inflation, will trend upwards in 2022 and power display advertising growth of over 9%, driven by online spend and the continued recovery of cinema, OOH and the press. The sunny uplands we forecast for 2022 could rapidly cloud depending on the course of Omicron as we face Year 3 of the pandemic