OFCOM MEDIA NATIONS - THE RESULTS IN THE WAKE OF COVID-19
We all know that the pandemic has fundamentally altered how UK consumers go about their everyday lives, but the results are in from the Ofcom Media Nations 2020 report, with outcomes more surprising than you may think.
Digital media consumption went up massively during lockdown, but so did traditional TV viewing. The reality is one of an altered and increasingly digital future – with linear broadcast TV ad revenues down around £1bn since 2015 and investment broadly moving into the digital space. With social media firmly in the spotlight and e-commerce a must-have, all brands need to up their digital experience game.
AV content consumption hit a high back in April 2020, as lockdown was enforced and consumption rose +1.5 hrs per day with 6 hours and 25 mins. Broadcast TV increased by half an hour a day, but SVOD services boasted the greatest increase, up 37 mins, to 1 hour and 11 mins. By the end of June, TV viewing slowly plateaued at +11% yoy and it’s predicted by Warc that by 2021 there will be a +12% yoy bounce back in traditional spot ad revenue by 2021
Broadcasters have made deep cuts: ITV announced a £100m cut to its programming budget (9%), Channel 4 will cut £150m in 2020 (around 22%) and Channel 5 will cut 10%. The price of a TV spot was greatly reduced and broadcasters have been working to remove most of the friction from the production process. Sky suffered a £575m revenue fall during the pandemic with sports, such as Premier League football suspended, plus slashed its media budget by -60% from £47m to £19m.
In contrast, 12m adults took up a new SVOD subscription and 3m did so for the first time. 15m homes subscribed to at least Netflix, Amazon Prime Video or Now TV in the first quarter of 2020. Disney+ surpassed Now TV to become the third most subscribed to SVOD service. It has hit 60m subscribers four years earlier than it expected to. Meanwhile, online video advertising has grown 51% since 2015 to £2.9bn.
There’s risk ahead. Warc data states that the total UK advertising market will contract by 15.6% in 2020. It thinks TV spot advertising in Q2 2020 will decline by an unprecedented -43%.
At the start of 2020, live radio reached 88.8% of adults, however, reduced in-car listening and the closure of workplaces has hurt radio, with 14% of adults stopping listening altogether. There has been reduced radio advertising expenditure, which fell by 3% in real terms over 2019 to £703m, with a further decline of 21% forecast for 2020. Some of radio’s largest sources of advertising revenue, such as entertainment and leisure (and the motor industry won’t be returning any time soon.
Adspend across the UK fell by more than £1bn year on year during the lockdown – all driven by traditional media: TV, newspapers, magazines, radio and posters. As we decode this hyper complex media landscape, there are a few things we must consider. The rules of engagement are changing so timing is everything and media strategies should allow flexibility to quickly change with the times and complement consumer consumption. The months to come are unchartered waters, so we need to be nimble and embrace the real possibilities for new and innovative ways that business models may change.
