According to a study by media regulator Ofcom, revenues in the UK streaming sector experienced an impressive 21.5% year-on-year surge, reaching £3.3 billion ($4.1 billion) in 2022.
The growth in revenue can be attributed to a combination of price increases by major streaming services like Netflix and Amazon in March and September 2022, respectively, as well as a significant rise in subscriptions.
Subscriptions rose from 39.7 million in Q4 2021 to 42.2 million in Q4 2022, as reported in the Media Nations UK 2023 study. Notably, Netflix accounted for half of all Subscription Video On Demand (SVOD) revenue in 2022, with the four largest services—Netflix, Amazon Prime Video, Disney+, and Sky’s Now—holding a dominant 93% market share. Out of these, Netflix led the pack with £1.61 billion, followed by Prime Video with £778 million, Disney+ with £383 million, and Now with £253 million.
However, the study highlighted that the overall household penetration of SVoD appears to have reached a plateau. The market seems to be entering a phase of maturity, posing challenges for future growth and sustainability. Providers are increasingly seeking new revenue-generating opportunities, cost management, and greater focus on profitability to cope with the evolving landscape.
While revenue growth persists, there has been a slowdown in the adoption of SVOD services like Netflix and Disney+, leading to a decrease in viewing in 2022, mirroring the decline in overall viewership. As of Q1 2023, 66% of UK households reported using an SVOD service, down from a peak of 68% in Q1 2022.
In terms of social video platforms, YouTube and Facebook maintain their status as the largest platforms in the UK, each reaching 91% of internet users aged 15+ in Q1 2023. However, uptake of TikTok has slowed among children, while remaining popular among users aged 15-24, with an average daily usage of one hour.
Shifting to the broadcast sector, the study reveals a significant annual decline in traditional broadcast TV viewership, with the percentage of viewers tuning in each week dropping from 83% in 2021 to 79% in 2022.
BBC One stands as the sole channel to reach over half of the viewing population weekly. Average daily broadcast TV viewing time also declined from two hours and 59 minutes in 2021 to two hours and 38 minutes in 2022, a decrease of 12%.
Notably, there has been a considerable drop in average daily broadcast TV viewing among older audiences (aged 65+), falling 8% year on year and 6% below pre-pandemic levels.
Over the past eight years, the number of programs attracting more than four million TV viewers has halved, decreasing from 2,490 in 2014 to 1,184 in 2022. This trend is also evident in the decline of viewing figures for the three most popular soaps: “Coronation Street,” “EastEnders,” and “Emmerdale.”
Additionally, there has been a significant reduction in the number of news programs and mass audience soap episodes attracting more than four million viewers since 2014.
Among streaming platforms, only 48 programs on Netflix averaged more than four million TV viewers in 2022, highlighting the platform’s dominance.
In terms of viewer preferences, BBC One (20%) and ITV1 (13%) continue to be the top two choices when turning on the TV, with Netflix ranking third (6%). Broadcasting content, whether live, recorded, or on-demand, still constitutes the majority of TV and video viewing time, accounting for 60% (two hours and 41 minutes per person, per day).
Regarding broadcasters’ streaming services, ITVX saw growth in total viewing, accounting for 10% of ITV’s viewership in the first half of 2023, up from 7% in 2022. Similarly, BBC iPlayer’s share of the BBC’s total viewing rose from 14% to 18% during the same period.
In the aftermath of the pandemic, content spend among public service broadcasters experienced a significant increase, reaching £2.9 billion in 2022—a 10.3% year-on-year rise and 14.2% higher than in 2019. Notably, drama spending surged to £339 million in 2022, representing a remarkable year-on-year increase of 47% and a 16.6% rise compared to 2019.
The post Streaming Revenues In The U.K. Increase By 21% to $4.1 Billion In Flat Market, According To Media Regulator Study appeared first on SurgeZirc UK.
