UK consumers are increasingly prepared to pay for media content despite the fact they are spending fewer hours watching TV, reading books and browsing social media sites than in previous years, a survey by advisory firm KPMG has found.
KPMG’s latest Media & Entertainment Barometer which gauges trends and consumers’ sentiments towards new and traditional media shows that UK media consumption in many areas plateaued or slightly decreased, while money spend on media is up across almost all categories of traditional and new media formats. According to the survey, spending on digital books, online games, magazine and newspaper apps as well as traditional TV has increased most.
According to David Elms, KPMG’s Head of Media, the results clearly show that UK consumers are increasingly making more conscious decisions about what type of media they choose and how much time they spend on it. “Contrary to popular perception they are also increasingly prepared to spend money, especially for digital content. The results prove that media companies are already changing habits and persuading consumers that content is worth paying for,” he noted.
However, the survey also reveals that spend on traditional media still outweighs new media. At £2 (€3) per month, spend on new media is almost three times lower than on traditional media (£6 per month). Most of the digital media spend goes on eBooks and online gaming but paid apps are proving to be increasingly popular and show the highest increase in spend (up from less than £1 to just over £2 in 2012). Consumers spend most of their money on TV however (almost £10 per month).
According to the survey, the continued growth of Smartphone and tablet ownership in the UK has certainly contributed to the increase in spend on eBooks and apps. 52 per cent percent of UK consumers currently own a Smartphone (up from 44 per cent) and 20 per cent own a tablet computer (up from 7 per cent).
UK consumers are beginning to acknowledge that good online content will come at a price. Asked about the pros and cons of traditional vs. new media only about half of respondents (53 per cent) said that one of the advantages of online content was that they could access it for free. (In September 2009, 80 per cent of those surveyed said one of the key attractions of online content was that it could be accessed for free.) And over of third (36 per cent) of respondents said they preferred to access media online as it offers better ‘value for money’, compared to only 15 per cent in 2009. However, security concerns still deter almost a third of UK consumers (27 per cent) from making payments online and a fifth of respondents (22 per cent) said they still don’t have a fast enough Internet connection to make online media an enjoyable experience.
Elms said that although UK consumers had been brought up on a diet of free digital content, attitudes were slowly beginning to change. “UK consumers are beginning to acknowledge the perks of paying for the digital content. This mind shift has happened before. As a nation, we moved from licence-fee paid terrestrial TV to multiple channel choices on subscription-based satellite and cable television. The delivery mechanisms for effective digital consumption of media – technology, networks and spectrum – exist and are constantly upgrading, with 4G networks now rolling out nationally. It is up to the media companies to continue to respond with pricing strategies and content that consumers want to embrace,” he advised.
“The challenge for many media providers is that they are yet to establish a loyal digital customer base. At the moment many media providers try to monetise content by appealing to the mass audience. The danger is that they effectively give away content for free and bring down their margins. They need to become more sophisticated by looking at and understanding both the content they have and the consumers who use it to develop a more targeted proposition and pricing model,” he concluded.