Streaming Impact On Broadcast TV Revealed In Latest Ofcom Study

The scale of the challenge facing television broadcasters in the UK (and elsewhere) has been revealed in a new study from the British communications regulator Ofcom.

For years now it has recognised that the arrival of streaming content is lowering levels of viewing and audience numbers for traditional television broadcasters.

Indeed a clear trend emerged in recent years where parents would watch traditional television, whereas youngsters and young adults would consume their media via streaming service providers. But even that is changing now.

Broadcast challenge

But with the mainstream adoption of services such as Netflix, Amazon Prime, Apple TV+ and Disney+, the pressure on traditional TV broadcasters continues.

Indeed, Ofcom in its Media Nations 2022 report found that one in five homes in the UK are signed up to all three biggest streamers: Netflix, Amazon and Disney+ – costing around £300 per year.

The report found that younger adults now watch almost seven times less scheduled TV than those aged 65 and over, as the generation gap in media habits reaches a record high.

Indeed, people aged 16-24 spend less than an hour (53 minutes) in front of broadcast TV in an average day – a fall of two-thirds in the last ten years.

This stands in marked contrast to those aged 65 and over, who still spend around a third of their waking day enjoying broadcast TV, with this age group sitting down for almost six hours (5 hours and 50 minutes) daily. This is actually slightly higher than a decade ago.

Ofcom cites the changes in younger adults’ habits as a reflection of the soaring popularity of US-based, on-demand streaming services.

The regulator said that nine in ten 18-24-year-old adults bypass TV channels and head straight to streaming, on-demand and social video services when looking for something to watch, with Netflix the most common destination.

However, six in ten (59 percent) 55-64-year-olds and 76 percent of those aged 65+ still turn to TV channels first.

Streaming revolution

“The streaming revolution is stretching the TV generation gap, creating a stark divide in the viewing habits of younger and older people,” noted Ian Macrae, Ofcom’s director of market intelligence.

“Traditional broadcasters face tough competition from online streaming platforms, which they’re partly meeting through the popularity of their own on-demand player apps, while broadcast television is still the place to go for big events that bring the nation together such as the Euro final or the jubilee celebrations,” said Macrae.

But TV broadcasters have a very slim respite, amid growing cost of living concerns.

Ofcom pointed out that after years of strong growth, the number of homes using streaming services began to slow in 2021, before starting to decline in spring of this year.

As the rising cost of living puts pressure on household budgets, the number subscribing to at least one streaming service fell by more than 350,000, to 19.2 million.

Netflix for example alarmed investors in April when it confirmed that 200,000 people (worldwide) had left it in the first three months of the year, and it warned another two million subscribers were likely to leave in the three months to July

But in July the streaming giant confirmed that actual subscriber loss in Q2 was less than expected, after only 970,000 subscribers had left the service in the three months to July.

Ofcom warned that cancellations do not necessarily represent customers that have been lost for good.

Ofcom’s survey of subscribers who cancelled earlier this year found that almost three quarters (73 percent) of customers said they thought they would resubscribe.

Broadcaster apps

Ofcom also found that public service broadcasters (PSB) continue to see both audiences and levels of viewing fall – but it is still popular during momentous national events such as the Women’s Euro 2022 final and the Queen’s Platinum Jubilee.

Ofcom pointed to the better news for broadcasters on-demand ‘player’ apps.

It found that overall, 82 percent of people said they used a PSB on-demand service in the past six months, roughly the same proportion who said they used at least one streaming service (83 percent).

Six in ten (59 percent) viewers said they used these platforms to watch channels or programmes live at the time they are broadcast.

As a result, the average time spent watching services such as BBC iPlayer, ITV Hub and All 4 increased to 15 minutes per day, up by three minutes per person per day, bucking the trend of post-pandemic declines in viewing time.

And BBC iPlayer has a high level of satisfaction across all age groups, with over four in five (81 percent) of those who had used it recently saying they were satisfied with the service.