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TV ticks the box - 07-August-2009, 13:19

By Julian Clover
August 7, 2009 09.03 UK

Ofcoms Communications Market Report shows TV to still hold its grip on the nation, but with a few knocks along the way, writes Julian Clover.

The headline from Ofcoms annual survey of the communications market was that in these supposed chastened times, broadband was the one thing that we would be least likely to dispose of, if anything we need greater speeds to ensure that everyone in the family can get a fast enough connection.

TV didnt come out quite so well, when asked to prioritize on communications services, consumers that had all four key components said firstly they would cut back on mobile phone calls (43%), then TV subscriptions (28%), then home (fixed line) phone calls (18%) and finally broadband (12%).

But the evidence of the past few quarters shows that the consumer still believes television to be a good form of entertainment; these days operators rarely publish the precise mix of channel packages taken by subscribers, but we can see there is a willingness to pay additional fees for services such as HD, PVR or multiroom.

The performance of digital television took a small hit, showing the most marked decline in satisfaction levels, down by five percentage points to 85% of consumers being either satisfied or very satisfied. There was also little enthusiasm for the notion that pay-TV operators were providing better value than they were a year ago, just 8%, compared to 26% and 24% for mobile and broadband providers.

Despite the gloom and doom surrounding the television sector, at least the established broadcasters such as ITV, the TV industry still continues to grow. Ofcom calculates that in 2008 the industry grew by 1.3% (145 million) year-on-year to 11.2bn. The growth comes from subscriber revenues, the value of advertising having declined by 105m, while the income allocated from the licence fee to television services grew by 31 million.

Multichannel television took 1267m in advertising revenues during 2008, a modest increase on the 1189m of 2007, but unlike the established commercial broadcasters on the up.

Ofcom also takes a look at the way the personal video recorder has become a part of British life, 27% now claiming to own the device, the majority being the five million Sky+ units, followed by Freeview, Freesat and Top Up TV, that together account for another 2.6 million.

In 2008 15% of viewing across the Big Five channels was done so through a PVR, the figure rising to 19% in Sky+ homes. Perhaps unsurprisingly 16-34 age group is most likely to timeshift their viewing; and high definition the genre most likely to be viewed again. According to data from the SkyView panel 59% of Sky 1 HD viewing was recorded, substantially ahead of Channel 4 HD, with 43%, and BBC HD with 33%.

In our on demand world nearly one quarter of households use the internet to watch catch-up TV, this is largely the BBC iPlayer, which contrasts with Channel 4s 4OD content that is largely done on TV. Given the lack of availability of 4OD this provides more evidence of the lack of success of Channel 4s catch-up efforts.
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