17 Aug 2022 | Ella Sagar

Ofcom Media Nations Report: the media generation gap widens

Ofcom’s fifth annual Media Nations Report has highlighted a “stretch” in the generation gap, with younger generations increasingly turning to US-based streamers as opposed to live broadcast TV, and music streaming services more than live radio.

‘TV generation gap’

Ofcom’s report said it had found “the generation gap” in media habits had reached “a record high” as 16- to 24-year-olds watch 53 minutes of broadcast TV in an average day, compared to five hours and 50 minutes among those aged 65+.

This works out at seven times less broadcast television for the younger generation, and marked a fall of two-thirds in the last 10 years, whereas the average viewing time for the older generation was slightly up on a decade ago.

Nine in 10 people aged between 18 and 24 “bypass” TV channels and go directly to streaming, on-demand and social video services when looking for something. Netflix was the most common destination for this demographic.

On the other hand, nearly six in 10 (59%) 55-64s do the opposite and go to TV channels first, which increases to 76% of those aged 65+.

Live radio versus music streaming

Nine in 10 adults listen to live radio weekly, with commercial radio overtaking BBC radio listeners for the first time in 20 years.

However, the proportion of audio listening time taken up by live radio has fallen 75% from 2017, now accounting for 63%. Meanwhile share of music streaming services like Spotify and Apple Music have more than doubled from 8% to 20%.

For 15- to 34-year-olds, listening to online via such a service took up nearly half (47%) listening time in the first quarter of this year, up from 22% in 2017.

Radio sets remained the main way to listening to radio, making up nearly three-quarters (73%) of listening hours in Q1 2022, with 10% via smart speakers, 12% via other online services and 5% through digital TV.

Radio revenues totalled £638m last year, an increase of 20% year-on-year, or 4% compared to 2019, mostly drven by national advertising revenues. Ofcom noted that while advertising, sponsorship and other revenue increased across the sector as a whole, the strength and nature of the recovery since 2020 has varied across stations and broadcasters, with some continuing to note “difficult trading conditions”.

‘Resurgent’ TV ad revenues despite decline in live TV viewing

Overall the average amount of time spent watching TV and video content in 2021 across all devices was five hours and 16 minutes per day, a decrease of 25 minutes compared to 2020 during Covid lockdowns, but an increase on 2019.

Ofcom revealed time spent watching TV from broadcasters, including linear, recordings and on-demand fell 9% compared to 2020, and 4% compared to pre-pandemic levels in 2019. This represented a “long-term trend of decline” has resumed in viewing of broadcasters’ content over the past decade.

Broadcasters recorded 59% viewing share in 2021, down two percentage points on 2020, and eight percentage points on 2019.

However, broadcaster video-on-demand (BVOD) “bucked the trend” of post-pandemic declines in viewing time. According to the report, time spent watching services like BBC iPlayer, ITV Hub and All 4 went up by an average of three minutes per person per day to 15 minutes, which “partially offset” decreases in other broadcast TV viewing.

In 2021, commercial public service broadcasters achieved their highest revenues in five years, despite a 13% decline in live TV viewing.

The TV ad market returned to growth after six years of contraction, and revenue rose to £4.7bn boosted by live sporting events like the UEFA Men’s Euros. Collectively, ITV, Channel 4 and Channel 5 brought in their highest revenues since 2016 but Ofcom’s report emphasises that an anticipated economic slowdown “could restrict future growth”.

Overall, commercial broadcast revenues rebounded strongly from the adverse impact of Covid-19, and increased by 10.6% year-on-year to £11.3bn, 4.5% higher than 2019.

In total, audio-visual revenues went up to £19bn in 2021, an increase of nearly 17% on 2020, mostly down to a “surge” in online video advertising and SVOD revenue, which made up £2.7bn of this revenue.

Netflix, Amazon Prime Video and Disney+ in a fifth of UK homes

Around 5.2 million homes, or a fifth of all UK homes subscribe to all three of the most popular platforms – Netflix, Amazon Prime Video and Disney+ – which in total cost around £300 per year.

Subscription video-on-demand services like Netflix and Disney+ were used by just over two-thirds (67%) of UK households by Q2 2022, which marked a decline from its peak of 68% in Q1.

Broadly, these SVOD services account for 18% of TV viewing, compared to 19% in 2020, or an average 58 minutes per day.

There was also strong revenue growth in this sector in 2021 of 27% year-on-year to £2.7bn, almost equalling 28% growth in 2020, which was the result of a combination of price rises and increases in subscriber numbersreport said price rises and increases in subscriber numbers.

However, the proportion of households yet to try one of these streaming services is becoming smaller and “harder to convert”, which combined with the growing cost-of-living crisis and rising inflation is leading to slower subscriber growth and customer retention.

The Media Nations Report highlighted less-established services such as Apple TV+, Discovery+ and Paramount+ continue to face “strong competition” to take on one or more of the more dominant streaming giants and said streaming services with hybrid business models “may become more common”.

For example, tiered offerings could mark competition with established BVOD services like ITV’s planned relaunch of ITVX slated for release in Q4 2022.