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| Netflix and Amazon become more popular than pay-TV services | Netflix and Amazon become more popular than pay-TV services |
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| Britain’s growing appetite for services such as Netflix and Amazon Prime has seen the number of subscribers to streaming services overtake those signed up to pay-TV providers such as Sky, BT and Virgin Media for the first time. | Britain’s growing appetite for services such as Netflix and Amazon Prime has seen the number of subscribers to streaming services overtake those signed up to pay-TV providers such as Sky, BT and Virgin Media for the first time. |
| The total number of UK subscribers to the three most popular online streaming services in the UK – Netflix, Amazon and Sky’s Now TV – hit 15.4 million at the end of the first quarter this year. At the same time, the number of subscribers to pay-TV packages reached 15.1 million, according to a report published by media regulator Ofcom. | The total number of UK subscribers to the three most popular online streaming services in the UK – Netflix, Amazon and Sky’s Now TV – hit 15.4 million at the end of the first quarter this year. At the same time, the number of subscribers to pay-TV packages reached 15.1 million, according to a report published by media regulator Ofcom. |
| The milestone marks a major competitive shift in the TV industry as the rise of the global internet firms and changing viewing habits, especially among younger viewers, is putting increasing pressure on the UK’s traditional pay-TV and free-to-air broadcasters including BBC, ITV and Channel 4. | The milestone marks a major competitive shift in the TV industry as the rise of the global internet firms and changing viewing habits, especially among younger viewers, is putting increasing pressure on the UK’s traditional pay-TV and free-to-air broadcasters including BBC, ITV and Channel 4. |
| The Ofcom report found that the total pay-TV revenues of Sky, Virgin, BT and TalkTalk fell for the first time in the almost a decade in 2017 to £6.4bn. | The Ofcom report found that the total pay-TV revenues of Sky, Virgin, BT and TalkTalk fell for the first time in the almost a decade in 2017 to £6.4bn. |
| By contrast, the dramatic increase in the popularity of the Silicon Valley streaming services in the UK fuelled a 28% surge to £2.3bn in what Ofcom terms online audio-visual revenues. Within this, subscription on-demand revenues – mainly viewers paying for Netflix and Amazon – leapt by 38% to almost £900m. | By contrast, the dramatic increase in the popularity of the Silicon Valley streaming services in the UK fuelled a 28% surge to £2.3bn in what Ofcom terms online audio-visual revenues. Within this, subscription on-demand revenues – mainly viewers paying for Netflix and Amazon – leapt by 38% to almost £900m. |
| Growth has been explosive: in 2012, the year Netflix launched in the UK, subscription on-demand revenues were just £52m. | Growth has been explosive: in 2012, the year Netflix launched in the UK, subscription on-demand revenues were just £52m. |
| While Netflix and Amazon spend more than $10bn (£7.6bn) annually on content, with a significant proportion on original content such as Stranger Things, the Ofcom report found that spending by the UK’s main free-to-air channels on homegrown shows hit a 20-year low: the BBC, ITV, Channel 4 and Channel 5 spent £2.5bn on UK-made shows last year, a 28% fall on the peak of £3.4bn in 2004. | While Netflix and Amazon spend more than $10bn (£7.6bn) annually on content, with a significant proportion on original content such as Stranger Things, the Ofcom report found that spending by the UK’s main free-to-air channels on homegrown shows hit a 20-year low: the BBC, ITV, Channel 4 and Channel 5 spent £2.5bn on UK-made shows last year, a 28% fall on the peak of £3.4bn in 2004. |
| The report pointed out that the rise of co-productions, often with companies including Netflix and Amazon, had gone some way to bridging the fall in spending. | The report pointed out that the rise of co-productions, often with companies including Netflix and Amazon, had gone some way to bridging the fall in spending. |
| Ofcom highlighted the growing trend among those aged 16 to 34 to skip the traditional pastime of watching scheduled broadcast TV. The majority of viewing by this group is non-broadcast content, which includes watching streaming services, catch-up and on-demand TV. YouTube makes up the highest proportion of non-broadcast viewing in the age group. | Ofcom highlighted the growing trend among those aged 16 to 34 to skip the traditional pastime of watching scheduled broadcast TV. The majority of viewing by this group is non-broadcast content, which includes watching streaming services, catch-up and on-demand TV. YouTube makes up the highest proportion of non-broadcast viewing in the age group. |
| “The research finds that what we watch and how we watch it are changing rapidly, which has profound implications for UK television,” said Sharon White, the chief executive of Ofcom. “We have seen a decline in revenues for pay-TV a fall in spending on new programmes by our public service broadcasters and the growth of global video streaming giants. These challenges cannot be overestimated.” | “The research finds that what we watch and how we watch it are changing rapidly, which has profound implications for UK television,” said Sharon White, the chief executive of Ofcom. “We have seen a decline in revenues for pay-TV a fall in spending on new programmes by our public service broadcasters and the growth of global video streaming giants. These challenges cannot be overestimated.” |
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