TV FUNDING PRODUCTION 100
SURVEY
hour 5 minutes a day watching subscription and streaming services such as Netflix, Amazon Prime Video and Disney+ – twice as much time as they spent the previous year. In fact, Netflix’s customer
base exceeded that of pay- TV providers combined for the very first time in 2020, with 52% of UK households signed up . UK subscriptions to streaming services jumped 50+% in 2020 to reach 31 million, up 11 million since 2019. The performance of UK
broadcaster video on demand services (BVOD) was mixed. While programme requests
to BBC iPlayer were up 31% and to Channel 4’s All 4 up 26%, the loss of Love Island in 2020 due to COVID-19 restrictions had a major impact on ITV Hub’s online viewing hours, which declined 5% . Viewing behaviour varies
with age, however, Ofcom’s nation’s media habits study also shows. While broadcast content accounted for 61% of ‘all adults’ total daily TV and video viewing, the corresponding figure for 16-34s was 32%.
THE BROADCASTER RESPONSE
For those whose businesses depend on TV commissioners’ ad-funded business models, the question is: how much are
broadcasters doing about all this? And the answer is: lots. The most obvious response
has been the development of Broadcaster Video On Demand services, from which UK broadcasters are now generating significant digital ad revenue – an estimated £600 million in 2021 . BVOD advertising
will generate 24% of UK broadcaster TV ad revenue by 2026 (worth around £1 billion) – up from 14% this year, while annual linear TV ad revenue will fall by just over the same figure over the same period, predicts Ampere Analysis. “Over the short to mid-term,
ad funded TV looks strong,” says Guy Bisson, Ampere’s Executive Director and Co- founder. He points to the emergence
of a mixed ecology. Linear broadcasters have
moved into on-demand and subscription. Meanwhile, as we reach a ceiling on subscriptions – last year, the average number of subscriptions per UK household was 2.3 – streamers are taking ad revenue more seriously. Bisson adds: “In one sense,
what we are now seeing is a levelling up.” Meanwhile, broadcasters are
working hard to further evolve their offering to advertisers. Sky, ITV and Channel 4, for
example, recently launched CFlight – a total TV advertising campaign measurement
Autumn 2021 P54
UK TV AD REVENUE’S RECOVERY, RELATIVELY SPEAKING
Evaluating how well UK TV advertising is faring depends on understanding what else is happening in the UK ad market.
Overall, all UK advertising spend is expected to rise by an unprecedented 18.2% to £27.7 billion by the end of this year, according to the Advertising Association – the voice of UK advertisers, agencies, media owners and tech companies, and WARC – a knowledge base for marketing strategy .
Prospects for 2022 are also encouraging, with some predicting further overall growth next year .
And this despite restrictions limiting paid-for product-related ads for certain products high in fat, sugar or salt (HFSS) to a post 9pm watershed on Ofcom-regulated broadcast and on-demand services from January 1, 2023.
Non-Ofcom-regulated on-demand services will be subject to new online restrictions designed to end paid-for product-related HFSS advertising online within the same time frame.
According to one estimate, more than £600 million is spent by brands on all food advertising on TV and online in the UK each year .
Yet TV’s current ad success is relative. Its predicted ad growth lags behind that of Digital Out of Home (expected to accelerate this year by 43.7%), Out of Home (tipped to grow 29.3%), online classified (+21.5%), and online display including social media and online video (+17.2%).
Further, by mid-2021, the big tech giants were reporting rapid rates of ad revenue growth.
YouTube advertising revenue, for example, was up 84% globally (to $7 billion in Q2 2021) compared with the same quarter last year. Global ad revenue was up by 56% at Facebook and by 87% at Amazon over the same period .
UK digital ad spend growth did slow in 2020 – from 15% to just 5% year on year, Interactive Bureau of Advertising UK figures show . Even so, it still totalled £16.5 billion – more than three times UK TV ad spend.
televisual.com
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