TV FUNDING PRODUCTION 100
SURVEY
live broadcast TV, for example. Then there’s the competition they now face with global streamers for the best TV ideas and talent. There’s the challenge of how
best to capitalise on the rise of on-demand TV while managing the long-term decline of linear TV ad sales. Then there’s the need to
stay on their toes to field curve balls, such as the UK government’s new restrictions on certain products high in fat, sugar or salt (HFSS) on any Ofcom-regulated broadcast and on-demand service due to come into effect next year (see box on previous page).
On top of which, a recent
report by Enders Analysis commissioned by ISBA, the voice of UK advertisers, has called for broadcasters to improve, among other things, the TV ad sales trading mechanism and agency / sales house deals
TV ecosystem,” Cox insists. “Also important will be
broadcasters’ on-going investment in the TV content people want to watch, of course. But broadcast TV and BVOD are still attractive and valued by brand owners as such.” He adds: “So long as the
environment remains a quality one, advertisers will come.” For now, at least.
(see box below). “Advertisers want a flourishing
THE GLOSS OF TV COMES FROM HIGH QUALITY CONTENT, WHICH CREATES A BRAND SAFE AD ENVIRONMENT
VIEWING TRENDS AND FUTURE TV AD REVENUE
By 2027, UK broadcasters will account for 61% of total video viewing across all platforms – down from 72% today, and two-thirds of all commercial video viewing – down from 74% today, according to a recent report by Enders Analysis .
The average adult will watch just 1 hour 49 minutes of commercial TV per day (on any screen), down from 2 hours 14 minutes in 2019.
Viewing patterns will vary markedly with age, however.
While under-35s will spend two-thirds of their commercial viewing time on digital video and just one third (1 hour daily) on broadcasters by 2027, over-55s will spend 83% of their commercial viewing time (3 hours 15 minutes daily) on broadcasters.
Against this backdrop, Enders analysed the efficiency of the current linear TV advertising model – involving the currency ‘cost per thousand impacts’, with an ‘impact’ defined as one member of the target audience viewing one 30-second ad spot, as measured by BARB.
Failure to improve the linear TV advertising model, it predicted, would directly lead to a fall in total TV ad revenues in 2027 of £364 million (compared to 2019).
Which explains the importance of both enhancing the linear model and, also, further developing the BVOD advertising model (which uses a different currency, ‘impressions’, with definition of an ‘impression’ varying by provider), fast.
“Viewing has shifted online, and broadcasters are taking a significant amount of revenue from that. At Channel 4, for example, more than 20% of revenue now comes through VOD,” says Enders Analysis COO and Head of TV Gill Hind.
“Though they are losing linear viewing, there are gaining elsewhere by creating new ad products and monetising them.”
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.
Autumn 2021
P56
televisual.com
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