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TV Service Providers - UK - October 2014

“Die-hard sports fans are unlikely to ditch TV subscriptions anytime soon, however, others may well be tempted to as subscription-free services improve, smart TVs enter more homes and more people use paid video streaming services.”
– Paul Davies, Senior Leisure and Technology Analyst

This report answers the following questions: 

  • Do video streaming services represent a significant threat to the pay-TV market?
  • What would be the impact on the market should Ofcom remove Sky’s legal obligation to offer its sports channels to its rivals?

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Table of contents

  1. Introduction

      • Definition
        • Abbreviations
        • Executive Summary

            • The market
              • Value
                • Figure 1: Total value of pay-TV subscriptions in the UK, 2009-19
              • Volume
                • Figure 2: Total volume of pay-TV subscriptions in the UK, 2009-19
              • Companies, brands and innovations
                • TalkTalk to double customer base in 2014
                  • Figure 3: Volume of UK TV households, by provider, 2013 and 2014
                • Brand Research
                  • Figure 4: Attitudes towards and usage of brands in the pay-TV sector, June 2014
                • The consumer
                  • Sky retains its dominance of pay-TV sector
                    • Figure 5: Consumers' subscription status and awareness of pay-TV service providers, August 2014
                  • Four in five non-subscribers rely on Freeview
                    • Figure 6: TV services used by non-subscribers, August 2014
                  • Almost a third of consumers are considering switching provider
                    • Figure 7: Likelihood of changing TV provider in the next 12 months, August 2014
                  • Less than one in five ‘potential switchers’ would consider TalkTalk
                    • Figure 8: TV service providers that consumers who are thinking of switching would consider, August 2014
                  • Desire for low-cost subscriptions the key to TalkTalk’s recent success
                    • Figure 9: Factors that influence choice of TV provider, August 2014
                  • Over a third of consumers use paid-for streaming services
                    • Figure 10: Paid-for video streaming services used in the past 12 months, August 2014
                  • Nearly half of ‘dual users’ think streaming services offer better value for money
                    • Figure 11: Perceptions of pay-TV services vs paid-for video streaming services, August 2014
                  • What we think
                  • Issues and Insights

                      • Do video streaming services represent a significant threat to the pay-TV market?
                        • The facts
                          • The implications
                            • What would be the impact on the market should Ofcom remove Sky’s legal obligation to offer its sports channels to its rivals?
                              • The facts
                                • The implications
                                • Trend Application

                                    • Trend: Let’s Make a Deal
                                      • Trend: Accentuate the Negative
                                        • Mintel Futures: Generation Next
                                        • Market Drivers

                                          • Key points
                                            • The ‘Nouveau Poor’ invest in staying in
                                              • Price rises test consumer patience
                                                • Smart televisions ramp up pressure on providers
                                                  • Figure 12: Household ownership of smart and 3DTVs, January 2012-April 2014
                                                  • Figure 13: Proportion of smart TV owners connecting sets to the internet, 2012-14
                                                • Terrestrial viewers starved of sports and films
                                                  • Figure 14: Genre mix on the five main PSB channels in peak time, by hours, 2010-13
                                                  • Figure 15: Listed sporting events, as of April 2014
                                                • Sports programming costs increased by 19% in 2013
                                                  • Figure 16: Content spend by commercial multichannels, by genre, 2012 and 2013
                                                • Court of Appeal forces Sky to continue offering sports channels to rivals
                                                  • BT tops the complaints pile
                                                    • Figure 17: Pay-TV complaints per 1,000 customers/connections, Q1 2012-Q1 2014
                                                • Who’s Innovating?

                                                  • Key points
                                                    • Virgin launches the ‘Big Kahuna’ bundle
                                                      • TalkTalk boosts revenue with pay-per-view content
                                                        • Sky fights back against BT with free broadband offer
                                                          • Freeview prepares built-in connected service
                                                          • Market Size and Forecast

                                                            • Key points
                                                              • More people, paying more money for pay-TV
                                                                • Figure 18: Total volume and value of pay-TV subscriptions in the UK, 2009-19
                                                              • Forecast
                                                                • Value
                                                                  • Figure 19: Total value of pay-TV subscriptions in the UK, 2009-19
                                                                • Volume
                                                                  • Figure 20: Total volume of pay-TV subscriptions in the UK, 2009-19
                                                                • Forecast methodology
                                                                • Market Share and Segmentation

                                                                  • Key points
                                                                    • ADSL creeps up on cable
                                                                      • Figure 21: UK multichannel TV households, by platform, 2013 and 2014
                                                                    • TalkTalk to double customer base in 2014
                                                                      • Figure 22: Volume of UK TV households, by provider, 2013 and 2014
                                                                    • Fewer than 10 million homes are now subscription-free
                                                                      • Figure 23: UK multichannel TV households, by subscription type, 2013 and 2014
                                                                  • Companies and Products

                                                                    • Key points
                                                                      • British Sky Broadcasting Group PLC (BSkyB)
                                                                        • Company overview
                                                                          • Key financials
                                                                            • Figure 24: British Sky Broadcasting (BSkyB), financial information, 2013 and 2014
                                                                          • Range of packages, channels and services
                                                                            • Recent activity
                                                                              • Virgin Media Inc.
                                                                                • Company overview
                                                                                  • Key financials
                                                                                    • Figure 25: Virgin Media, financial information, 2012 and 2013
                                                                                  • Range of packages, channels and services
                                                                                    • Recent activity
                                                                                      • TalkTalk Telecom Group PLC
                                                                                        • Company overview
                                                                                          • Key financials
                                                                                            • Figure 26: TalkTalk, financial performance, 2013 and 2014
                                                                                          • Range of packages, channels and services
                                                                                            • Recent activity
                                                                                              • BT TV (part of BT Consumer)
                                                                                                • Company overview
                                                                                                  • Key financials
                                                                                                    • Figure 27: BT Consumer (including BT TV), financial performance, 2013 and 2014
                                                                                                  • Range of channels, packages and services
                                                                                                    • Recent activity
                                                                                                      • Freeview (DTV Services Ltd)
                                                                                                        • Company overview
                                                                                                          • Range of channels and services
                                                                                                            • Recent activity
                                                                                                              • Freesat
                                                                                                                • Company overview
                                                                                                                  • Range of channels and services
                                                                                                                    • Recent activity
                                                                                                                      • YouView TV Ltd
                                                                                                                        • Company overview
                                                                                                                          • Range of channels and services
                                                                                                                            • Recent activity
                                                                                                                            • Brand Research

                                                                                                                              • Brand map
                                                                                                                                  • Figure 28: Attitudes towards and usage of brands in the pay-TV sector, June 2014
                                                                                                                                • Correspondence analysis
                                                                                                                                  • Brand attitudes
                                                                                                                                    • Figure 29: Attitudes, by pay-TV brand, June 2014
                                                                                                                                  • Brand personality
                                                                                                                                    • Figure 30: Pay-TV providers’ brand personality – macro image, June 2014
                                                                                                                                    • Figure 31: Pay-TV providers’ brand personality – micro image, June 2014
                                                                                                                                  • Brand experience
                                                                                                                                    • Figure 32: Pay-TV brand usage, June 2014
                                                                                                                                    • Figure 33: Satisfaction with various pay-TV brands, June 2014
                                                                                                                                    • Figure 34: Consideration of pay-TV brands, June 2014
                                                                                                                                    • Figure 35: Consumer perceptions of current pay-TV brand performance, June 2014
                                                                                                                                  • Brand recommendation
                                                                                                                                    • Figure 36: Recommendation of selected pay-TV brands, June 2014
                                                                                                                                • Brand Communication and Promotion

                                                                                                                                  • Key points
                                                                                                                                    • Sky invests heavily in order to protect its vast customer base
                                                                                                                                      • Figure 37: TV service advertising expenditure, by company, 2009/10-2013/14
                                                                                                                                    • TV advertising still accounts for a third of total adspend
                                                                                                                                      • Figure 38: TV service advertising expenditure, by media channel, 2009/10-2013/14
                                                                                                                                  • The Consumer – TV Services in the Home

                                                                                                                                    • Key points
                                                                                                                                      • Sky retains its dominance of pay-TV sector
                                                                                                                                        • Figure 39: Consumers' subscription status and awareness of pay-TV service providers, August 2014
                                                                                                                                      • Virgin Media in need of standout feature
                                                                                                                                        • Figure 40: Pay-TV services in the home, August 2013 and August 2014
                                                                                                                                      • Four in five non-subscribers rely on Freeview
                                                                                                                                        • Figure 41: TV services used by non-subscribers, August 2014
                                                                                                                                    • The Consumer – Switching Intentions

                                                                                                                                      • Key points
                                                                                                                                        • Almost a third of consumers are considering switching provider
                                                                                                                                          • Figure 42: Likelihood of changing TV provider in the next 12 months, August 2014
                                                                                                                                        • Half of 25-34s are weighing up their options
                                                                                                                                          • Figure 43: Proportion of consumers who are considering switching TV provider in the next 12 months, by gender and age, August 2014
                                                                                                                                        • BT and TalkTalk most under threat
                                                                                                                                          • Figure 44: Likelihood of changing TV provider in the next 12 months, by service subscribed to/used, August 2014
                                                                                                                                        • Less than one in five ‘potential switchers’ would consider TalkTalk
                                                                                                                                          • Figure 45: TV service providers that consumers who are thinking of switching would consider, August 2014
                                                                                                                                        • A fifth of Virgin Media customers are thinking of switching to Sky
                                                                                                                                          • Users who are thinking of switching
                                                                                                                                            • Figure 46: TV service providers that consumers who are thinking of switching would consider, by subscribers/users of Sky, Virgin Media and Freeview, August 2014
                                                                                                                                          • All users
                                                                                                                                            • Figure 47: TV service providers that consumers who are thinking of switching would consider, by subscribers/users of Sky, Virgin Media and Freeview, August 2014
                                                                                                                                          • Half of potential switchers only have one provider in mind
                                                                                                                                            • Figure 48: Number of TV service providers people are open to switching to, August 2014
                                                                                                                                        • The Consumer – Influencing Factors

                                                                                                                                          • Key points
                                                                                                                                            • Desire for low-cost subscriptions the key to TalkTalk’s recent success
                                                                                                                                              • Figure 49: Factors that influence choice of TV provider, August 2014
                                                                                                                                            • Virgin Media’s appeal lies with broadband
                                                                                                                                              • Figure 50: Factors that influence choice of TV provider, by services subscribed to, August 2014
                                                                                                                                            • More than one in three men base their decision on sport
                                                                                                                                              • Figure 51: Factors that influence choice of TV provider, by gender, August 2014
                                                                                                                                          • The Consumer – Video Streaming Services

                                                                                                                                            • Key points
                                                                                                                                              • Over a third of consumers use paid-for streaming services
                                                                                                                                                • Figure 52: Paid-for video streaming services used in the past 12 months, August 2014
                                                                                                                                              • Streaming services allow Millennials to ‘top up’ TV subscriptions
                                                                                                                                                • Figure 53: Proportion of consumers who have used any paid-for video streaming service in the past 12 months, by age, August 2014
                                                                                                                                              • Nearly half of ‘dual users’ think streaming services offer better value for money
                                                                                                                                                • Figure 54: Perceptions of pay-TV services vs paid-for video streaming services, August 2014
                                                                                                                                              • Continued innovation means Sky users are the most content
                                                                                                                                                • Figure 55: Perceptions of pay-TV services vs paid-for video streaming services, by Sky TV subscribers, August 2014
                                                                                                                                            • Appendix – Market Size and Forecast

                                                                                                                                                • Figure 56: Best- and worst-case forecast for the total volume of pay-TV subscriptions in the UK, 2014-19
                                                                                                                                                • Figure 57: Best- and worst-case forecast for the total value of pay-TV subscriptions in the UK, 2014-19

                                                                                                                                            Companies Covered

                                                                                                                                            • Argos
                                                                                                                                            • British Broadcasting Corporation (BBC)
                                                                                                                                            • British Sky Broadcasting Group plc (BSkyB)
                                                                                                                                            • Channel 4
                                                                                                                                            • Currys
                                                                                                                                            • ESPN, Inc.
                                                                                                                                            • Freeview
                                                                                                                                            • ITV plc
                                                                                                                                            • Ofcom
                                                                                                                                            • Panasonic
                                                                                                                                            • Sony Corporation
                                                                                                                                            • TalkTalk Telecom Ltd.
                                                                                                                                            • TiVo Inc
                                                                                                                                            • Virgin Media Ltd
                                                                                                                                            • Virgin Mobile
                                                                                                                                            • YouTube, Inc.
                                                                                                                                            • YouView TV Ltd

                                                                                                                                            TV Service Providers - UK - October 2014

                                                                                                                                            US $2,570.96 (Excl.Tax)