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Multichannel TV - UK - October 2012

“The long-standing divide between free and paid-for multichannel TV services is becoming distorted. Previously subscription providers such as Sky and Virgin Media have fought to win customers away from terrestrial and basic digital TV services, which have lacked comparable content.

The arrival of new portals, such as YouView, and smart TVs offers consumers a subscription-free method of accessing and interacting with content, without paying a monthly premium. The battle for exclusive content is important, but not as crucial as the method in which it is delivered in order to suit changing consumer behaviour.”

– Paul Davies, Senior Technology Analyst

Some questions answered in this report include:

  • How much of an issue is churn?
  • Are subscription providers successfully generating loyalty?
  • Has the battle shifted from content supply to content delivery?
  • Do consumers really want 3D?

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Table of contents

  1. Introduction

      • Definition
        • Abbreviations
        • Executive Summary

            • The market
              • Figure 1: Forecast value of multichannel TV subscriptions, 2007-17
            • Market drivers
              • Hours spent watching TV have increased
                • Subscriptions driving value
                  • Figure 2: Total TV industry revenue, by source, 2011
                • Market segmentation
                  • Figure 3: UK multichannel TV households, by platform, 2007-12
                • Companies, brands and innovation
                  • Figure 4: Volume of multichannel TV households, by provider, 2011 and 2012
                • The consumer
                  • Majority of consumers choosing to pay for TV
                    • Figure 5: TV services subscribed to – all TV owners, July 2012
                  • Multichannel subscriptions dominated by Sky
                    • Figure 6: TV services subscribed to – all multichannel subscribers, July 2012
                  • HD finally hitting mass audience
                    • Figure 7: Television activities performed regularly, July 2012
                  • Opportunity for ‘no-strings’ providers
                    • Figure 8: Attitudes towards TV services, July 2012
                  • What we think
                  • Issues in the Market

                      • How much of an issue is churn?
                        • Are subscription providers successfully generating loyalty?
                          • Has the battle shifted from content supply to content delivery?
                            • Do consumers really want 3D?
                            • Trend Application

                                • Trend: Guiding Choice
                                  • Trend: Without a Care
                                    • Trend: 2015 Access Anything, Anywhere
                                    • Market Drivers

                                      • Key points
                                        • Hours spent watching TV have increased
                                          • Figure 9: Average daily hours of television viewing, 2001-11
                                          • Figure 10: Agreement with the statement ‘Do you feel that over the past year television programmes have improved, got worse or stayed about the same?’, by age, 2011
                                        • Ageing population to challenge on-demand viewing
                                          • Figure 11: Trends in the age structure of the UK population, 2007-17
                                        • Subscriptions driving value
                                          • Figure 12: Total TV industry revenue, by source, 2004-11
                                        • Sport dominates subscription revenue
                                          • Figure 13: Revenue generated by multichannel broadcasters, by genre, 2011
                                        • Advertising revenue steady
                                          • Figure 14: TV net advertising revenues, by source, 2004-11
                                        • 3D and smart TV penetration increasing
                                          • Figure 15: Volume sales of 3D televisions and internet-connected televisions, 2010 and 2011
                                      • Who’s Innovating?

                                        • Key points
                                          • Battle of the broadcasting platforms
                                            • Virgin TiVo – inspiration from over the pond
                                              • Sky increases storage capability
                                                • Blinkbox first to market with HBO shows
                                                  • Television: a device we used to watch TV on?
                                                  • Market Size and Forecast

                                                    • Key points
                                                      • Upsurge of paid subscriptions to continue
                                                        • Figure 16: Total volume and value of paid multichannel TV subscriptions, 2017-17
                                                        • Figure 17: Average price of paid multichannel TV subscription per month per subscriber, 2007-17
                                                      • Forecast
                                                        • Figure 18: Forecast volume of multichannel TV subscribers, 2007-17
                                                        • Figure 19: Forecast value of multichannel TV subscribers, 2007-17
                                                      • Forecast methodology
                                                      • Segment Performance

                                                        • Key points
                                                          • Platform type
                                                            • Figure 20: UK multichannel TV households, by platform, 2007-12
                                                          • Paid vs free
                                                            • Figure 21: UK multichannel TV households, by subscription type, 2007-12
                                                        • Market Share

                                                          • Key points
                                                            • Has Sky finally reached its limit?
                                                              • Figure 22: Volume of multichannel TV households, by provider, 2011 and 2012
                                                            • Innovation driving value
                                                              • Figure 23: Value of multichannel TV subscriptions, by provider, 2011
                                                          • Brand Communication and Promotion

                                                            • Key points
                                                              • Telecoms expenditure hits peak in 2012
                                                                • Figure 24: Company advertising expenditure (telecoms industry), 2007/08-2011/12
                                                              • Sky invests most heavily in TV service
                                                                • Figure 25: TV service advertising expenditure, 2007/08-2011/12
                                                              • Newspapers losing, others booming
                                                                • Figure 26: TV service advertising expenditure, by media channel, 2007/08-2011/12
                                                                • Figure 27: TV service advertising expenditure, by media channel, 2011/12
                                                            • Companies and Products

                                                              • Key points
                                                                • British Sky Broadcasting (BSkyB)
                                                                    • Figure 28: British Sky Broadcasting (BSkyB) continuing operations, 2011 and 2012
                                                                  • Virgin Media
                                                                      • Figure 29: Virgin Media consolidated financial information, 2010 and 2011
                                                                    • BT Vision
                                                                        • Figure 30: BT Retail financial performance, 2011 and 2012
                                                                      • TalkTalk
                                                                          • Figure 31: TalkTalk financial performance, 2011 and 2012
                                                                        • Freeview
                                                                          • Freesat
                                                                            • YouView
                                                                            • TV Services in the Home

                                                                              • Key points
                                                                                • Majority of consumers choosing to pay for TV
                                                                                  • Figure 32: TV services subscribed to – all TV owners, July 2012
                                                                                • Multichannel subscriptions dominated by Sky
                                                                                  • Figure 33: TV services subscribed to – all multichannel subscribers, July 2012
                                                                                  • Figure 34: TV services subscribed to, past and present, July 2012
                                                                                • Sky appeals more to younger generations
                                                                                  • Figure 35: TV services currently subscribed to, by age, July 2012
                                                                                • Rural areas – the perfect battleground for ADSL?
                                                                                  • Figure 36: TV services currently subscribed to, by location, July 2012
                                                                                • Sky more popular amongst the wealthy
                                                                                  • Figure 37: TV services currently subscribed to, by gross annual household income, July 2012
                                                                                • Something for all the family
                                                                                  • Figure 38: TV services currently subscribed to, by household size, July 2012
                                                                                • Freeview commonplace, even in subscription households
                                                                                  • Figure 39: Proportion of consumers who have Freeview in the home, by service provider, July 2012
                                                                              • Perceptions of TV Service Providers

                                                                                • Key points
                                                                                  • Perceptions of Sky
                                                                                      • Figure 40: Perceptions of Sky TV, July 2012
                                                                                      • Figure 41: Number of pay-TV complaints per 1,000 customers/connections, Q4 2011-Q2 2012
                                                                                    • Perceptions of Virgin Media
                                                                                      • Figure 42: Perceptions of Virgin Media TV, July 2012
                                                                                      • Figure 43: Proportion of consumers who perceive TV services as being overpriced, July 2012
                                                                                    • Perceptions of BT Vision
                                                                                      • Figure 44: Perceptions of BT Vision, July 2012
                                                                                    • Perceptions of TalkTalk TV/Tiscali TV
                                                                                      • Figure 45: Perceptions of TalkTalk TV/Tiscali TV, July 2012
                                                                                    • Perceptions of innovation the key
                                                                                    • TV Activities Performed

                                                                                      • Key points
                                                                                        • HD finally hitting mass audience
                                                                                          • Figure 46: Television activities performed regularly, July 2012
                                                                                          • Figure 47: Consumers who regularly watch HD channels at home, by service provider, July 2012
                                                                                        • Sky customers driving recording market
                                                                                          • Figure 48: Consumers who regularly record TV programmes/films using a set-top box, by service provider, July 2012
                                                                                        • 3D popular amongst specialists
                                                                                          • Figure 49: 3D television activities performed, July 2012
                                                                                        • On-demand viewing spread across devices
                                                                                          • Figure 50: On-demand television activities performed, July 2012
                                                                                          • Figure 51: On-demand television activities performed, by age, July 2012
                                                                                      • Attitudes Towards TV Services

                                                                                        • Key points
                                                                                          • Opportunity for ‘no-strings’ providers
                                                                                            • Figure 52: Attitudes towards TV services, July 2012
                                                                                          • Attitudes of Sky subscribers
                                                                                            • Figure 53: Attitudes towards TV services – Sky subscribers, July 2012
                                                                                          • Attitudes of Virgin Media subscribers
                                                                                            • Figure 54: Attitudes towards TV services – Virgin Media subscribers, July 2012
                                                                                          • Attitudes of BT Vision subscribers
                                                                                            • Figure 55: Attitudes towards TV services – BT Vision subscribers, July 2012
                                                                                        • Appendix – Market Size and Forecast

                                                                                            • Figure 56: Forecast volume of multichannel TV subscribers, 2012-17
                                                                                            • Figure 57: Forecast value of multichannel TV subscribers, 2012-17
                                                                                        • Appendix – TV Services in the Home

                                                                                            • Figure 58: TV services subscribed to, July 2012
                                                                                            • Figure 59: TV services have in the home, by TV services subscribed to, July 2012
                                                                                            • Figure 60: Reason(s) for purchasing the particular set, by TV services subscribed to, July 2012
                                                                                            • Figure 61: Reason(s) for purchasing the particular set, by TV services have in the home, July 2012
                                                                                            • Figure 62: Attitudes towards smart televisions’ internet applications, by TV services subscribed to, July 2012
                                                                                            • Figure 63: Attitudes towards smart televisions’ internet applications, by TV services have in the home, July 2012
                                                                                            • Figure 64: Television activities performed, by TV services subscribed to, July 2012
                                                                                            • Figure 65: Television activities performed, by TV services have in the home, July 2012
                                                                                            • Figure 66: Attitudes towards TV services, by TV services subscribed to, July 2012
                                                                                            • Figure 67: Attitudes towards TV services, by TV services have in the home, July 2012
                                                                                            • Figure 68: TV services have in the home, July 2012
                                                                                            • Figure 69: Sky TV services subscribed to, by demographics, July 2012
                                                                                            • Figure 70: Virgin Media TV services subscribed to, by demographics, July 2012
                                                                                            • Figure 71: BT Vision services subscribed to, by demographics, July 2012
                                                                                            • Figure 72: TalkTalk TV/Tiscali TV services subscribed to, by demographics, July 2012
                                                                                            • Figure 73: TV services have in the home, by demographics, July 2012
                                                                                        • Appendix – Perceptions of TV Service Providers

                                                                                            • Figure 74: Perceptions of Sky TV, July 2012
                                                                                            • Figure 75: Perceptions of Virgin Media TV, July 2012
                                                                                            • Figure 76: Perceptions of BT Vision, July 2012
                                                                                            • Figure 77: Perceptions of TalkTalk TV/Tiscali TV, July 2012
                                                                                            • Figure 78: Perceptions of Sky, by TV services subscribed to, July 2012
                                                                                            • Figure 79: Perceptions of Sky, by TV services have in the home, July 2012
                                                                                            • Figure 80: Perceptions of Virgin Media, by TV services subscribed to, July 2012
                                                                                            • Figure 81: Perceptions of Virgin Media, by TV services have in the home, July 2012
                                                                                            • Figure 82: Perceptions of BT Vision, by TV services subscribed to, July 2012
                                                                                            • Figure 83: Perceptions of BT Vision, by TV services have in the home, July 2012
                                                                                            • Figure 84: Perceptions of TalkTalk TV/Tiscali TV, by TV services subscribed to, July 2012
                                                                                            • Figure 85: Perceptions of TalkTalk TV/Tiscali TV, by TV services have in the home, July 2012
                                                                                            • Figure 86: Television activities performed, by most popular perceptions of Sky TV, July 2012
                                                                                            • Figure 87: Television activities performed, by next most popular perceptions of Sky TV, July 2012
                                                                                            • Figure 88: Television activities performed, by most popular perceptions of Virgin Media TV, July 2012
                                                                                            • Figure 89: Television activities performed, by next most popular perceptions of Virgin Media TV, July 2012
                                                                                            • Figure 90: Television activities performed, by other perceptions of Virgin Media TV, July 2012
                                                                                            • Figure 91: Television activities performed, by most popular perceptions of BT Vision, July 2012
                                                                                            • Figure 92: Television activities performed, by next most popular perceptions of BT Vision, July 2012
                                                                                            • Figure 93: Television activities performed, by other perceptions of BT Vision, July 2012
                                                                                            • Figure 94: Television activities performed, by most popular perceptions of TalkTalk TV/Tiscali TV, July 2012
                                                                                            • Figure 95: Television activities performed, by next most popular perceptions of TalkTalk TV/Tiscali TV, July 2012
                                                                                            • Figure 96: Attitudes towards TV services, by most popular perceptions of Sky TV, July 2012
                                                                                            • Figure 97: Attitudes towards TV services, by next most popular perceptions of Sky TV, July 2012
                                                                                            • Figure 98: Attitudes towards TV services, by most popular perceptions of Virgin Media TV, July 2012
                                                                                            • Figure 99: Attitudes towards TV services, by next most popular perceptions of Virgin Media TV, July 2012
                                                                                            • Figure 100: Attitudes towards TV services, by other perceptions of Virgin Media TV, July 2012
                                                                                            • Figure 101: Attitudes towards TV services, by most popular perceptions of BT Vision, July 2012
                                                                                            • Figure 102: Attitudes towards TV services, by next most popular perceptions of BT Vision, July 2012
                                                                                            • Figure 103: Attitudes towards TV services, by other perceptions of BT Vision, July 2012
                                                                                            • Figure 104: Attitudes towards TV services, by most popular perceptions of TV service providers, July 2012
                                                                                            • Figure 105: Attitudes towards TV services, by next most popular perceptions of TV service providers, July 2012
                                                                                            • Figure 106: Most popular perceptions of Sky TV, by demographics, July 2012
                                                                                            • Figure 107: Next most popular perceptions of Sky TV, by demographics, July 2012
                                                                                            • Figure 108: Other perceptions of Sky TV, by demographics, July 2012
                                                                                            • Figure 109: Most popular perceptions of Virgin Media TV, by demographics, July 2012
                                                                                            • Figure 110: Next most popular perceptions of Virgin Media TV, by demographics, July 2012
                                                                                            • Figure 111: Other perceptions of Virgin Media TV, by demographics, July 2012
                                                                                            • Figure 112: Most popular perceptions of BT Vision, by demographics, July 2012
                                                                                            • Figure 113: Next most popular perceptions of BT Vision, by demographics, July 2012
                                                                                            • Figure 114: Other perceptions of BT Vision, by demographics, July 2012
                                                                                            • Figure 115: Most popular perceptions of TalkTalk TV/Tiscali TV, by demographics, July 2012
                                                                                            • Figure 116: Next most popular perceptions of TalkTalk TV/Tiscali TV, by demographics, July 2012
                                                                                            • Figure 117: Other perceptions of TalkTalk TV/Tiscali TV, by demographics, July 2012
                                                                                        • Appendix – TV Activities Performed

                                                                                            • Figure 118: Television activities performed, July 2012
                                                                                            • Figure 119: Television activities performed, by TV services subscribed to, July 2012
                                                                                            • Figure 120: Television activities performed, by TV services have in the home, July 2012
                                                                                            • Figure 121: Television activities performed, by most popular reason(s) for purchasing the particular set, July 2012
                                                                                            • Figure 122: Television activities performed, by next most popular reason(s) for purchasing the particular set, July 2012
                                                                                            • Figure 123: Television activities performed, by most popular attitudes towards smart televisions’ internet applications, July 2012
                                                                                            • Figure 124: Television activities performed, by next most popular attitudes towards smart televisions’ internet applications, July 2012
                                                                                            • Figure 125: Frequency of watching HDTV channels at home, by demographics, July 2012
                                                                                            • Figure 126: Frequency of watching 3D films on Blu-ray disc at home, by demographics, July 2012
                                                                                            • Figure 127: Frequency of recording TV programmes/films using a set-top box, by demographics, July 2012
                                                                                            • Figure 128: Frequency of watching 3DTV programmes/channels at home, by demographics, July 2012
                                                                                            • Figure 129: Frequency of watching on-demand TV/films through a set-top box, by demographics, July 2012
                                                                                            • Figure 130: Frequency of watching on-demand TV/films on my desktop/laptop/tablet computer screen, by demographics, July 2012
                                                                                            • Figure 131: Frequency of watching on-demand TV/films through a games console at home, by demographics, July 2012
                                                                                            • Figure 132: Frequency of connecting my desktop/laptop/tablet computer to my TV to watch on-demand TV/films, by demographics, July 2012
                                                                                            • Figure 133: Frequency of watching 3D films/other broadcasts in the cinema, by demographics, July 2012
                                                                                            • Figure 134: Frequency of watching 3DTV programmes/channels in the pub, by demographics, July 2012
                                                                                        • Appendix – Attitudes towards TV Services

                                                                                            • Figure 135: Attitudes towards TV services, July 2012
                                                                                            • Figure 136: Attitudes towards TV services, by TV services subscribed to, July 2012
                                                                                            • Figure 137: Attitudes towards TV services, by TV services have in the home, July 2012
                                                                                            • Figure 138: Most popular attitudes towards TV services, by demographics, July 2012
                                                                                            • Figure 139: Next most popular attitudes towards TV services, by demographics, July 2012

                                                                                        Companies Covered

                                                                                        • British Broadcasting Corporation (BBC)
                                                                                        • British Sky Broadcasting Group plc (BSkyB)
                                                                                        • BT Group plc
                                                                                        • Channel 4
                                                                                        • ESPN, Inc.
                                                                                        • Freeview
                                                                                        • Nickelodeon Networks
                                                                                        • Scripps Networks Inc.
                                                                                        • TalkTalk Telecom Ltd.
                                                                                        • Tiscali UK
                                                                                        • TiVo Inc
                                                                                        • UKTV
                                                                                        • Virgin Group Ltd.
                                                                                        • Virgin Media Ltd
                                                                                        • YouView TV Ltd

                                                                                        Multichannel TV - UK - October 2012

                                                                                        £1,995.00 (Excl.Tax)