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Digital TV, Broadband and Mobile Markets Booming
The latest update from UK media and telecoms regulator Ofcom shows that, while local commercial radio listening is on the decline, multi-channel digital TV is now reaching 30% of households, 8 million households have broadband access, and consumer spend on mobile phones has increased by 17% since 2004.
The latest Communications Market Quarterly Update, covering the period to 31 March 2005, combines a round-up of recent developments in the TV, radio and telecoms sectors with information about industry size, structure and financing; availability, penetration and use of products and services; and consumer attitudes and behaviour. The main findings are as follows.
Television
Digital terrestrial TV service Freeview has now reached more than 5m households, and in June 2005, 30% of all TV viewing was of multi-channel services.
Direct consumer spending now accounts for more than 60% of all TV industry revenues, with advertising accounting for less than 40%. Overall growth in TV advertising in the UK is expected to be a little over 2% in 2005. However, one widely reported study from Zenith Optimedia suggested that the long-term future of TV advertising was uncertain.
No doubt partly in response to these concerns, many channels have developed alternative sources of revenue, including premium-rate telephone services, interactive services and advertising, pay-per-view and TV shopping. In total these new and alternative revenue sources generated £235 million for digital channels in 2004.
Telecoms
Total retail telecoms revenues in the year to March 2005 were £36.6 billion - 5% higher than in the previous year. The increase is particularly strong in the mobile market, where spending in Q1 2005 reached £3.3 billion, 17% higher than the same quarter in 2004.
By June 2005, there were a record 8.1 million broadband connections in the UK. BT's competitor DSL ISPs have been rapidly gaining market share over the past two years, to a point where they now comprise 47% of all broadband connections, and the cable companies have a combined 28% market share of broadband.
While more than a third of UK fixed lines are now connected to non-BT service providers, BT is not fading away. Its trial of BT Fusion in June was the first attempt at fixed-mobile convergence. Ofcom says a number of key factors will facilitate the development of such services, notably the emergence of handsets with multiple transmission protocols and the growth of voice over IP (VoIP) offerings over fixed broadband and Wi-Fi platforms.
Radio
Local commercial radio listening fell to a new low share of 33.9% in Q1 2005, although there was a rise in Q2 2005). While commercial local stations might be attracting fewer listeners, there is more diversity in local radio: the update says that the number of community radio licences awarded over the period quadrupled from five to 20.
The full update is available at www.ofcom.org.uk/research/cm/aug05update/
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