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The recently published Media Nations 2019 Report from OFCOM clearly illustrates the changing power structures within the UK broadcast industry and offers many insights into what the future holds and the challenges ahead for the TV advertising industry ‘as we knew it’.

Recent seismic changes in broadcast consumption are driven by concurrent factors including new technology, new content generation, platform competition and generational consumption. These competing trends are set to continue dynamically in the years to come to radically change the way we, and future generations, consume television and video content.

TV broadcast viewing still remains incredibly high with an average 3 hour and 12 minutes viewed daily by all consumers. This figure rises incrementally with age, with the ‘over 75’ watching on average five hours and 49 minutes per day on their televisions. There is an increasing gulf of viewing consumption behaviour for younger audiences as they have migrated towards video consumption via online services; with the much sought after 16-24 year old demographic watching on average 85 minutes per day on broadcast television, but an average of 73 minutes per day on YouTube.

In recent years we have seen the explosion of Subscription Video on Demand (SVoD), driven primarily by Amazon Prime, Netflix, NOW TV and Disney Life. SVoD has reached 19.1 million subscriptions – a huge 24% increase in the last year alone – and now heavily eclipses the Pay TV Subscription services of Sky, Virgin Media, BT and TalkTalk that now total a combined 14.3 million households.

The battle lines for the future share of broadcast audiences is clearly now heavily based on the level of new content that can be produced by traditional broadcasters and new platform owners alike. As if the UK broadcast competitive landscape had not become hard enough in the fight for viewers, the introduction in Quarter Four 2019 of Apple TV+ and the new paid subscription joint venture between ITV and BBC, BritBox, and Disney+ will all be fighting for share.

Four in ten viewers now report that online video services are now their preferred and main way of watching both television and video content. The advances in high-speed broadband – with over 80% of UK households having a connection – and the widespread distribution of Smart TVs, coupled with low cost SVoD packages, have led to a far wider choice of both media outlets and content.

The continued fragmentation of audiences and viewership has put increasing pressure on all Media Owners and their advertising revenues looking ahead which have already seen reported decline during 2019 from Public Service Broadcasters (PSBs). It has been reported this week that the PSBs – ITV and Channel Four – are now lobbying OFCOM to extend the minutes per hour for advertising to presumably make up for this increasing shortfall in anticipated revenue looking ahead.

It would appear that ultimately the quality and quantity of new content will be the primary driver in terms of ultimate success, whether the broadcaster relies on the newer subscription-based advertising light business model, or the traditional advert funded content model.

Whilst this fierce commercial battle is fought amongst these relatively new and also established broadcast media monoliths, the Media Nations 2019 Report portrays television in the UK as a medium that in terms of both delivery options and variety of content remains great value for money and the ‘media of choice’ for the end consumer. Thus remaining the most important ‘player’ and arbiter in the ever-complex future world of broadcasting.

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