Ofcom releases Communications Market 2023 reportThursday, July 20th, 2023
The Communications Market 2023
The Communications Market Report is an interactive data portal, which allows users to interrogate data collected from industry by Ofcom, data from Ofcom’s consumer research, and headline figures from selected third parties (including television and radio audience data from BARB and RAJAR).
Television and audio-visual
Live TV viewing continued its downward trend, particularly among younger groups in 2022. The average daily viewing of broadcast television on the TV set (including live and watched within 28 days of broadcast) fell by 20 minutes in 2022, from an average 2 hours and 59 minutes in 2021, to 2 hours and 38 minutes.
Those aged 16-24 are now watching just 39 minutes of broadcast TV on average each day, from 53 minutes the previous year. The majority of broadcast viewing continues to be accounted for by older age groups with those aged 75+ now watching 329 minutes of broadcast TV on average each day, although this was 21 minutes lower than in 2021.
Total audiovisual revenues increased to £20bn in 2022, up by 5.3% on 2021. The increase was driven by subscription video-on-demand (SVoD) services (such as Netflix and Disney+), which accounted for 16% of total revenues (£3.3bn), and online video advertising, which accounted for 13% (£2.7bn). Combined revenues for commercial PSBs, digital multichannels and pay-TV platform operators declined by 1.8% to £11.1bn, though this was 2.6% higher than in 2019, the last prepandemic year. TV and online audiovisual advertising revenue increased to £6.4bn, with growth of 3.1% in 2022 significantly lower than the 39% achieved the previous year. The growth was driven by a £341m increase in online video advertising and, to a much lesser extent, a £12m increase in advertising on multichannel TV. Commercial PSB channels’ combined advertising revenue (including from their portfolio channels) declined by £165m, down 5.9% year on year.
PSB spend on first-run UK originated content totalled £2.9bn, up 10.3% year on year and 14.2% compared to 2019. This reflected a higher level of output but also increased costs, including lingering Covid-related production protocol costs and inflationary pressure affecting productionrelated expenses. Growth in spend was driven by an annual increase by each of the five main PSB channels apart from BBC One – which had a marginal decline (-0.7%) following a significant increase in 2021 – and also by the BBC portfolio of channels (+73%), with spend on these boosted by the relaunch of BBC Three as a linear channel.
Hours of first-run UK originated content across the PSBs increased by 1,086 in 2022 to 32,712, the highest total since 2016. This was partly because some programming, delayed by Covid-19, aired later than originally planned. Sports programming reached its highest volume over the past decade, at 3,367 hours, or 10% of total first-run originated hours on PSB channels. Drama (407 hours) reached its highest level since 2016, with spend on the genre up 47% year on year and 16.6% higher than in 2019. Factual entertainment also saw a notable increase – output has been consistently rising, with the 1,749 hours in 2022 the highest in a decade, up 57% compared to 2019.
Third-party spend on first-run UK originated PSB content reached its highest annual total, at £680m. This comes from sources such as co-productions with other commissioners, government high-end TV tax credit, deficit financing and advances from independent producers. The 2022 figure was up 41% year on year and represented 19% of total PSB origination spend, up from 9% in 2014. The increase was almost entirely driven by drama, which accounted for 69% of total third-party investment. An increase in spend on children’s programming made it the second-largest contributor to third-party spend, accounting for 10% of it, marginally ahead of factual.
Total programming spend on multichannels (such as Sky and UKTV) across key genres declined by 5% in 2022 to £4.5bn. As a result, spend remains below the 2019 level, when it was close to £5bn. There were declines for all the key genres except news – new market entrants have contributed to multichannel news programming spend reaching its highest levels, at £189m in 2022, up 42% on the previous high of £134m in 2021.
SVoD services such as Netflix, Amazon Prime Video and Disney+ generated £3.3bn in revenue in 2021, up by 21.5% year on year. This represented just over half (52%) of total online video revenue, which increased by 17.8% to £6.2bn, with advertising accounting for 43% of the total and digital transactional 5%.