Revenues in the U.K. streaming sector soared 21.5% year-on-year to £3.3 billion ($4.1 billion) from 2022, a study from media regulator Ofcom has revealed.
The growth is driven by a combination of price rises – notably by Netflix in March 2022 and Amazon in September 2022 – and overall growth in subscriptions, which increased from 39.7 million in Q4 2021 to 42.2 million in Q4 2022, the Media Nations U.K. 2023 study says. Netflix accounted for half of all SVOD revenue in 2022, with the four largest services, Netflix, Amazon Prime Video, Disney+ and Sky’s Now, taking a 93% market share. Of these, Netflix accounted for £1.61 billion, Prime Video £778 million, Disney+ £383 million and Now £253 million.
“But the indications are that overall SVoD household penetration has plateaued,” the study adds. “There are increasing signs that the market is entering a phase of maturity that poses challenges for future growth and sustainability. Despite continued revenue growth, SVOD business models are under pressure as attracting and retaining customers becomes more challenging, with providers increasingly looking to identify new revenue-generating opportunities, better manage costs and focus on profitability.”
The study notes that there was a slowing in the take-up of SVOD services like Netflix and Disney+, and there are indications that viewing declined in 2022, along with most other forms of viewing as total viewing fell. Some 66% of U.K. households reported using an SVOD service in Q1 2023, down from a peak of 68% in Q1 2022.
YouTube and Facebook remain the largest social video platforms in the U.K., each reaching 91% of U.K. internet users aged 15+ in Q1 2023. Use of TikTok remains high among users aged 15-24, at an hour per day, but take-up among children has slowed, the study notes.
Over in the broadcast sector, the study finds that the proportion of viewers who tune in to traditional broadcast TV each week has seen the sharpest ever annual fall – from 83% in 2021 to 79% in 2022. BBC One remains the only channel to reach more than half of the viewing population every week. The average time that viewers spend watching broadcast TV each day was down from two hours and 59 minutes in 2021, to two hours and 38 minutes in 2022 (-12%). For the first time, there is also evidence of a significant decline in average daily broadcast TV viewing among older audiences (aged 65+) – a drop of 8% year on year, and down 6% on pre-pandemic levels.
The number of programs with more than four million TV viewers halved over the past eight years, from 2,490 in 2014, to 1,184 in 2022, which is also reflected in the decline in viewing figures for the three most popular soaps:“Coronation Street,”“EastEnders”and“Emmerdale.”Since 2014,news programs attracting more than 4 million viewers are down 72% – from 537 to 148 programs, while mass audience soap episodes are down 42%, from 754 to 438 programs.
only 48 programs averaged more than four million TV viewers on streaming platforms in 2022, with Netflix accounting for the vast majority.
Overall, BBC One (20%) and ITV1 (13%) are still the top two first destinations for viewers when they turn on their TV, with Netflix coming in third (6%). Watching broadcasters’ content – either live, on recorded playback or streamed on-demand – still accounts for the greatest proportion of all time spent each day watching TV and video (60%, two hours and 41 minutes per person, per day).
Among broadcasters’ streaming services, ITVX accounted for 10% of ITV’s total viewing in the first half of 2023, up from 7% across 2022, while BBC iPlayer rose from 14% of the BBC’s total viewing to 18% during the same time period.
In the first post-pandemic year, 2022 saw content spend among public service broadcasters grow to £2.9 billion, up 10.3% year-on-year, and 14.2% greater than in 2019. Spend on drama rose to £339 million in 2022, a year-on-year increase of 47%, and 16.6% higher than in 2019.
