U.K. Broadcast TV Revenue Up 5.7% - Broadcasting & Cable

U.K. Broadcast TV Revenue Up 5.7%

Driven by rebound in ad market; subscription income boost
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Broadcast TV revenue in the U.K. was up 5.7% in 2010, driven by both a rebound in the ad market, with net ad revenues up a strong 11.2%, and by boosts in subscription income, up 5.3%.

That is according to Ofcom's latest market sector report.

That ad rebound brought the market back to 2008 levels, while pay TV subscription revenue, which has remained fairly steady throughout the economic slump, was the highest since Ofcom started tracking the market.

Ad revenue on commercial multichannel providers was up 6% in 2010, with entertainment channels accounting for the majority of that ad spend at 53%. Sports was the biggest generated of overall revenue growth among pay channels, up 17%, while spending on content across all genres was up as well, by 11% for commercial multichannel broadcasters.

The U.K. is in the midst of a phased-in DTV transition, with 93% of sets now connected to some digital platform. Ofcom pointed out that, as a result, the opportunities for multichannel providers to pick up additional subs through analog migration are decreasing.

While broadcast TV remains the main venue for viewers, broadband is an increasingly big player in what the U.K. calls "catch-up" television with 35% of individuals saying they use a broadband connection to access sites allowing them to view episodes of shows, according to Ofcom's tracking study data.

"What is remarkable in Ofcom's report is the historic resilience of TV, despite nominal competition for users' finite time from other devices such as smartphones and PCs. TV viewing time continues to rise, and the product is improving, with 93% of U.K. households now having multi-channel TV," said Nick Thomas, principal analyst for TV & digital media at Informa Telecoms & Media, in a statement on the report. But he expects smaller screens to become increasingly bigger players.

"Although U.K. TV advertising revenues actually grew in 2010, the growth in multi-tasking could yet affect the market, if advertisers demand more information about how their content is being viewed," he said. TV's percentage of the ad pie has remained fairly constant over the past half decade.

"While TV remains central to U.K. consumers' lives, new models will emerge that accurately reflect the changing nature of TV consumption for many viewers. We expect to see much more activity around the second screen, where viewers use their smartphone, tablet or PC to respond to what is on the primary TV."

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