In what is being named as the ‘Netflix Effect’, video streaming services such as Netflix and Amazon Prime now have more subscribers than traditional pay TV services in the UK.
Data released today by Ofcom has revealed that nearly 40% of UK households now subscribe to Netflix, Amazon Prime or Now TV. The 15.4 million subscriptions have now passed the 15.1 million who pay for Sky, BT, Virgin and other satellite/cable providers.
The media regulator has said that British TV will now have to reflect on the way it operates should it want to compete with these giants in the future.
Sharon White, Ofcom’s chief executive, says: “We’d love to see broadcasters such as the BBC work collaboratively with ITV, Channel 4 and Channel 5 so that they have got that scale to compete globally, making shows together, co-producing great shows that all of us can watch.
“I think it would be great to see a British Netflix.”
— ITV News (@itvnews) July 18, 2018
Ofcom has also revealed that spending on TV by the BBC, ITV, Channel 4 and Channel 5 has dropped by nearly £1 billion over the last 20 years.
The decrease from £3.4 billion to £2.5 billion represents a 28% drop in spending.
The new data shows that the long growth of traditional pay TV services stopped last year with a revenue decline of 2.4%. Advertising revenue was also down by 7%.
However, Sky and other similar pay TV services made much more money than their new online rivals, with revenues of £6.4 billion versus £895 million for subscription video on demand services.
The number of hours spent watching traditional TV schedules also continued to drop. Teenagers and young people now watch around 40% less than they did seven years ago.
Viewing among five to 15-year-olds dropped by 15% in 2017 and by 12% for 16 to 24-year-olds. These figures also include TV that is recorded and watched within seven days after broadcast.