Research from Deloitte has found that the TV industry generated £17.5 billion (€20.6bn) in revenues in 2012, this is just over 1 per cent of UK GDP. Indirect sales, such as books and music revenues driven directly by TV, added £500 million to TV’s direct economic impact.
The report, What television is: 2013, examines trends in TV and was commissioned by The Royal Television Society for the biennial RTS Cambridge Convention.
Ed Shedd, head of Deloitte’s UK technology, media and telecoms practice said: “TV’s role in society is built on solid foundations. The UK devotes about a quarter of all waking time, on average four hours, watching the small screen and total spend on television for services and equipment is only about 1 per cent of GDP. Its share of GDP declined just 0.05 per cent from 2007 to 2012, from 1.18 per cent to 1.14 per cent.”
The growth in pay-TV has slowed considerably and in 2012, year on year growth for all forms of pay-TV was 1.6 per cent. This is significantly less than the overall pay TV growth of 8.5 per cent between 2010 and 2011.
Paul Lee, director of technology, media and telecommunications research at Deloitte said: “Pay TV’s revenue can still increase in the medium term; the UK’s demand for television products and services has not yet been fully satisfied and there are still aspects of the television market that are under-served. For example, pay-TV can cover sports in depth, to complement the highlights shown on the public service broadcaster channels.
“Pay-TV can also be driven by premium content stacking; we expect consumers to source their favourite programmes from multiple pay-TV providers, not just one at the exclusion of all others.”
Deloitte’s research found that half of the respondents used SVoD services, such as Netflix and Lovefilm, in addition to existing pay TV subscriptions. SVoD revenues are expected to reach £160 million in 2013, a 167 per cent increase from 2012, with some households substituting spend on the purchase of rental of physical DVDs to downloading films and TV programmes on SVoD services.
Other key findings:
· Pay-TV gained the most market share and enjoyed the highest increase in revenues between 2007 and 2012. Subscriptions represented 24 per cent of all revenue in 2007 and 31 per cent in 2012. The fastest growing component of pay TV between 2011 and 2012 were subscription funded digital platforms, which grew 148 per cent, but from a very low base of £25 million.
· The spend on new British programming grew in 2012, from about £2.8 billion in 2011 to over £3.1 billion.