Ofcom releases Communications Market 2024 report

Ofcom: The Communications Market 2024

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.

Television and audiovisual

• Broadcast TV viewing continued its downward trend across almost all age groups in 2023. The average daily viewing of broadcast television on the TV set (including live and watched within 28 days of broadcast) fell by 9 minutes from 2022, to an average of 2 hours and 29 minutes in 2023.
• Those aged 16-24 are now watching just 33 minutes of broadcast TV on average each day, from 39 minutes the previous year. The majority of broadcast viewing continues to be accounted for by older age groups, with those aged 75+ watching just over 5 and a half hours of broadcast TV on average a day in 2023, an increase by 4 minutes compared to 2022.
• Audiovisual revenues totalled £18.2bn in 2023, remaining flat (+0.1%) compared to 2022. Combined revenues for commercial PSBs, digital multichannels and pay-TV platform operators fell by 7.5% to £10.2bn. Meanwhile, subscription video-on-demand (SVoD) revenues increased by around £700m to just under £4bn.
• TV advertising revenue (linear plus BVoD) decreased by 8.9% to £4.9bn, reflecting a difficult year for the market, set against the backdrop of the challenging economic environment. Linear ad spend fell by a greater amount – 13.6%. Connected TV advertising, which is spend accrued on TVs that are connected to the internet and can access web-based content, generated £1.2bn, up from £962 million in 2022. Commercial PSB channels’ combined advertising revenue (including from their portfolio channels) declined by £382m, down 14.6% year on year.
• PSB first-run UK-originated spend declined by 5.3% in 2023 to £2.7bn, with ITV the only channel (other than CBeebies) to increase its spend, by 4.4%. First-run originated hours, meanwhile, reduced by 2.9% to 31,770, though Channel 5 and some of the BBC portfolio channels (BBC News, BBC Parliament and CBeebies) bucked the trend in this case, with Channel 5 increasing its output by 1.8%. The reductions in both spend and hours – largely driven by sports but with most genres following the trend – should be contextualised by noting that 2022’s highs were in part inflated by lingering Covid-19 impacts.
• Third-party spend on first-run UK-originated PSB content declined marginally from its 2022 high, reducing by 0.9% to £674m. This spend comes from sources such as co-productions with other commissioners, government high-end TV tax credits, deficit financing and advances from independent producers. Despite the marginal decline in absolute terms, the 2023 figure represented 20% of total PSB origination spend, a higher proportion than ever. Increases in third-party contributions to drama (up 7% compared to 2022) were offset by declines in most other genres, including children’s and factual (down 17% and 8% respectively).
• Total programming spend by multichannels (such as Sky and UKTV) across key genres increased by 5.4% in 2023 to £4.8bn. Sports was the main driver of this growth, increasing by £391m (12.6%) to £3.5bn, and increasing its share of spend among the key genres to an all-time high of 73%, compared to 59% in 2013. The increase for sport offset a notable decline in multichannel spend on entertainment programming, which fell by £136m (-15.5%) to £739m.
• SVoD services such as Netflix, Amazon Prime Video and Disney+ generated just under £4bn in subscription revenue in 2023, up by 22% year on year. Price rises were one of the key revenue drivers in the year, while the introduction of advertising – which is so far making only a small contribution to revenues, in a nascent period for ad tiers – is one of SVoD providers’ strategic responses to the market maturing and take-up reaching a plateau.