Here at TD SYNNEX, we like to binge-stream the occasional box set, and it seems like we’re not the only ones.
According to a new report from Ofcom, video streaming services such as Netflix, Now TV and Amazon Prime now boast more subscribers than traditional pay TV channels in the UK. The communications watchdog revealed that nearly 40% of households in the UK subscribed to one or more streaming services. That equates to 15.4 million subscriptions – 300,000 more than the 15.1 million who pay for Sky, Virgin, BT and other satellite and cable TV providers.
It’s a trend that has been growing rapidly over recent years, and Ofcom thinks that traditional TV providers will have to adapt if they want to survive and compete with new media services. In the future, we might even see some traditional competitors banding together.
Traditional TV giants could unite for streaming service
Ofcom's Chief Executive Sharon White said: ‘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.’
We’d love to see that ourselves, and it doesn’t seem to be out of the realms of possibility. The BBC admitted in its recent annual report that it was struggling to meet the financial power of its online rivals. There have already been preliminary talks between the BBC, ITV, Channel 4 and Channel 5 about forming a combined streaming service to match – or at least compete with – the likes of Netflix.
Traditional TV growth reversed last year
The Ofcom report also showed that long-standing growth of pay TV revenues came to a halt last year. There was actually a revenue decline of 2.4%, and advertising revenue also slumped by 7%. Perhaps not surprisingly, the BBC, ITV, Channel 4 and Channel 5 reduced the amount that they were spending on making TV. Spending had fallen by almost £1bn, or 28%, over the past 20 years.
The figures also showed, however, that while streaming subscriptions now outnumbered pay TV ones, they didn’t make as much money. The likes of Sky and other pay TV channels had revenues of £6.4bn versus £895m for streaming video on demand services.
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