Despite some notable mass audience success, with a much-anticipated Royal Wedding and popular 2018 FIFA World Cup, it has been yet another tough year for schedule-based television in the UK. The annual BARB measured Individuals 4+ consolidated (Live + 7-Days) Total TV Audience fell by 4.2% from 8.39 million in 2017 to 8.04 million in 2018, and if we eliminate the impact of population growth by looking at the Average Daily Minutes the decline is even more pronounced, with a 5.2% drop from 203.0 minutes in 2017 to 192.4 minutes in 2018 (down by 10.6 minutes). While the summer’s heat wave (as discussed in one of my previous notes) didn’t help, there can be little doubt that the disruption caused by the continued growth in SVOD (Netflix, Amazon, etc.) take-up is the primary cause of this continued decline in schedule-based television viewing levels. In fact, BARB’s latest SVOD take-up figures show that after stalling in the third quarter, the number of UK households subscribing to at least one SVOD service has risen substantially from 11.64 million in 2018-Q3 (40.9% of homes) to 12.3 million in 2018-Q4 (43.1% of homes). Not one to shy away from some shameless self-promotion, I’m pleased to say that my recent logistic trend forecast of UK SVOD take-up was virtually spot on with a prediction of 43.2% of homes subscribing to at least one SVOD service in 2018-Q4, a difference of just 0.1 percentage points!
The UK’s TV broadcasters are of course fighting back, with the BBC and ITV aiming to launch a UK version of their North American joint venture SVOD service, BritBox, in the second half of 2019. However, as part of my SVOD forecast I also noted that it was likely to be the quality of the UK’s free-TV offering that would eventually help limit the extent of SVOD take-up to around two-thirds of UK households by the mid-2020s, making the DTT platform (dominated as it is by Freeview/Freeview Play) another important element in the fight-back. It is also the case (as outlined in one of my earlier notes) that 2017 was an exceptionally good year for the DTT platform, with its consolidated Individuals 4+ audience actually growing by 2.3% from 3.84 million in 2016 to 3.93 million in 2017, while all other major platforms suffered significant audience declines. More importantly, this 2017 boost in the DTT platform’s performance was driven by an influx of younger viewers, with all the evidence suggesting that this was the result of cord-cutting, with younger viewers in particular switching from the pay-TV services on Sky/Virgin to the pay-lite/free-TV services on DTT.
The million dollar question, of course, is: how well has the DTT platform managed to fare in 2018? As well as the significant (SVOD disruption induced) downward pressure on schedule-based TV audiences affecting all the major TV platforms, has the DTT platform managed to resist the inevitable attempts by the pay-TV operators to recapture some of those illusive younger viewers?
In view of these considerable challenges, it is hardly surprising that between 2017 and 2018 the DTT platform’s consolidated Individuals 4+ audience fell by 2.5% from 3.93 to 3.83 million. However, this must be contrasted with the more pronounced year-on-year Individuals 4+ audience declines of the other major platforms, with Cable down by 5.8% (from 1.20 to 1.13 million) and Satellite down by 6.2% (from 3.08 to 2.89 million) between 2017 and 2018. As a result, the DTT Platform’s Share of the Individuals 4+ consolidated Total TV audience actually rose from 46.8% in 2017 to 47.6% in 2018, and while this is only a relatively modest gain of 0.8 percentage points, this builds on the substantial gains of the previous year, when after having been notably stable at around 44.4% a year since 2013 (the first full year after the digital switchover was completed in late 2012), the DTT Platform’s Individuals 4+ Share actually rose significantly to 46.8% in 2017 (up around 2.4 percentage points on the preceding 4-year average ). When looking at Commercial Impacts, the DTT Platform’s recent performance is even more impressive with its Adults 16+ Share of Commercial Impacts (SOCI), after growing moderately from 44.5% in 2013 to 45.8% in 2016, rising to 48.8% (up 3 percentage points) in 2017, and then rising again to 50.0% (up 1.2 percentage points) in 2018.
While all the evidence points to the gains of 2017 having been driven by cord-cutting younger viewers, one might well be tempted to speculate that the continued improvement of the DTT platform’s performance relative to the other major platforms in 2018 is more likely to be a consequence of the UK’s aging population. After all, elderly viewers are still significantly more likely to be living in a DTT Only household than their younger counterparts, and their schedule-based TV viewing hasn’t yet suffered any notable declines as a result of the SVOD disruption. The actual evidence, however, does not support this view. After the substantial gains of 2017, the DTT platform’s Share of consolidated Total TV rose again for the under-35s in 2018. For Children (4-15) the DTT Share rose from 31.7% to 32.7% (up 1.0 percentage points), while for 16-34 Adults the DTT Share rose from 36.5% to 37.7% (up 1.2 percentage points) between 2017 and 2018. By contrast, for 35-54 Adults the DTT Share rose much more modestly from 38.4% to 38.8% (up 0.4 percentage points), while for 55+ Adults the DTT Share remained virtually unchanged at 56.3% in 2017 versus 56.4% in 2018. It is also notable that the DTT Share gains for the commercially high value 16-34 Adults demographic become even more pronounced when looking at Share of Commercial Impacts, with the DTT platform’s Adults 16-34 SOCI rising from 39.4% in 2017 to 41.4% in 2018 (up 2.0 percentage points).
The evidence from the BARB Universes (i.e. estimates of the different types of people making up the UK’s television owning households) also suggests that cord-cutting by younger viewers has continued to play a role in the 2018 audience Share gains of the DTT platform. Between 2017 and 2018 the proportion of the total number of Children (4-15) in UK television households that were living in DTT Only homes rose from 30.9% to 31.9% (up 1.0 percentage points), while the proportion of 16-34 Adults rose from 35.6% to 36.8% (up 1.2 percentage points). By contrast, the proportion of the total number of 35-54 Adults in UK television households that were living in DTT Only homes hardly changed at all from 34.5% in 2017 to 34.7% in 2018, and it is a similar story for 55+ Adults at 49.6% versus 49.8%. It is also important to note that these are not just relative gains, whereby the number of uder-35s living in TV households has declined overall, but just less so in DTT Only homes. In fact, according to the BARB panel Universes, the number of under-35s living in DTT Only homes rose by 4.2% between 2017 and 2018 (up 334k), and the overall proportion of UK homes that own a working TV-set has remained notably stable at just over 95% in the last few years.
As well as demonstrating the remarkable resilience of the DTT platform, this also suggests that schedule-based television remains important to younger viewers, who, rather than simply choosing not to own a TV-set and watching YouTube and Netflix on their phones and tablets, are opting for DTT. Compared with one of the higher cost pay-TV options, or giving up on schedule-based TV altogether, it’s easy to appreciate how the combination of Freeview Play on a low cost 4K 50-inch smart-TV, supplemented with a Netflix, Amazon, or (perhaps soon) even BritBox subscription, is likely to be an attractive option for cash-strapped under-35s setting up their first home. A strong free-TV offering has always been a cornerstone of the UK’s media landscape, and its continuing popularity at a time of intense disruption is a good indication that the UK’s TV broadcasters can evolve to weather the storm, and thus continue bringing audiences (not just in the UK, but across the globe) engaging and unique British content that would otherwise be lost in a homogenised world of SVOD giants.
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