This is certainly a week for surveys and Ofcom, the UK regulator has come out with one of its regular updates to the shape of communications and how it has changed over the past few years.
It’s a pretty volatile account, and pretty typical we think of many of the more advanced Western European countries, painting a picture where broadcasting, fixed and mobile communications are fragmenting, suffering from ARPU erosion and consolidating into double, triple and quad plays, as the very young adapt to a life of multiple devices, used concurrently and cleverly to get the best from them.
A number of simple points are worth highlighting. Spend on telecommunications services are falling, down 1.5% to $185.90 per household per month, due mostly to falling fixed and mobile voice costs; 78% of Digital Video Recorder users say that they regularly fast forward through ads; 75% of 11 year olds own a TV, a games console and a mobile phone of their own; and over 90% of single music tracks purchased were bought online.
The total UK television industry revenue reached $21.7 billion during 2006, up 1.4% on the previous year but while subscription revenues rose by 3.5% to over $8 billion, advertising fell by 2.2% to just $7 billion.
In-house TV production fell 8.7% over the year to $2.87 billion, while spending went up 6.8% on programs made independently to $6.18 billion, regionally created content has also fallen dramatically.
Digital television is now in 80% of homes, some 20.4 million of them, with 8.4 million using DVB-T Freeview, up 33.3% on the year, and just 8 million taking pay TV from a satellite (BSkyB) up just 8.3%. But when all TVs are taken into account, including all those in bedrooms and elsewhere around the house, only 51% are digital.
The five main TV networks have been losing audience share but have been able to offset this to some extent by the strong performance of their spin-off channels which run over the DVB-T multiplex Freeview. But the trend is inexorably down, and all TV channels are losing market share as the number of channels that can be seen for free rises to over 60.
There are just 450,000 households which have HDTV services which amounts to just 1.7% of the total. And Ofcom says that the effect of this is that these homes watch more TV, but less and less SD TV.
Radio in the UK is still dominated by the government owned BBC, and commercial nationwide radio stations took just $542 million and local radio channels even less at $307 million. Quite naturally kids listen to less radio, over 55s to more.
DAB digital radio will develop further in 2008, with the launch of the second national commercial DAB multiplex. The new national license was awarded to the 4Digital Group Limited in July 2007 and the new network will carry ten national digital radio services as well as text and data services.
Ofcom is licensing further local DAB multiplexes during 2007.
This has meant that DAB digital radio set sales passed 5 million and 1.8 million of these were sold during the last 12 months. There are 300 DAB radio set models on the market, with the average price for a portable set now around $140.
But also 41% of radio listeners have listened to radio programming on their digital TV, 24% over the internet, and 8% via mobile phone. Ofcom says that 27% of UK adults now own an MP3 player, which is interesting because the IBM report (see elsewhere in this issue), which had slight skewing issues, showed it closer to 55%, over double the actual rate.
For telecommunications alone the average household spend fell by nearly $2 a month during 2006 to $130 and for the first time, average mobile spend fell as falling prices more than compensated for an increase in the total number of connections and in the average number of voice calls and text messages per subscriber. Like-for-like prices fell by nearly 9%.
Average calls for each mobile connection rose above 100 minutes a month for the first time, while average calls per fixed-line connection fell below 300 minutes, showing how gradually fixed mobile substitution continues. 3G moved into the mainstream in 2006 with connections growing by 70% to reach 7.8 million.
More than half of UK households had broadband by March 2007 with an average claimed speed of 4.6 Mbps and local loop unbundling accelerated so that now 72% of UK premises are connected to an exchange where they could opt to buy unbundled services. This is a jump of 27%. But still only 9% of broadband is delivered by ULL.
In the UK more time was spent on eBay than on any other web site, and social networking sites Bebo, MySpace, Facebook and YouTube are all in the top ten sites by time spent, with women aged 25-34 spending over 20% more time online than their male counterparts.
‘Silver surfers’ also account for an increasing amount of internet use with nearly 30% of total time spent on the internet accounted for by over-50s (although, as over-50s account for 41% of the UK population, their internet usage remains significantly lower than average).
This is the fourth of Ofcom’s annual reports to focus on trends and developments in the UK’s communications market, with the aim of providing a context for decision-making by Ofcom, as well as by commercial and public sector organizations.