Channel 4

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  • July 16, 2019

    Future of UK Public Service Media: EPG prominence to the fore

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    Ofcom’s recommendations to Government suggest updating EPG prominence legislation to cover connected TVs, and were warmly welcomed by the PSBs. Balancing various commercial, PSB and consumer interests will be key; determining what content qualifies for prominence will be a particularly thorny issue to resolve. Extending prominence to smart TVs and streaming sticks is critical, but implementation will be challenging
  • June 27, 2019

    2019 UK TV advertising backstopped by Brexit

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    We expect total TV ad revenues to decline 3.3% in H1 2019, partly due to a return to Earth following the idyllic conditions of the World Cup in June 2018. Bad omens for advertising for H2 include the sagging economy since April and the Government’s impetus to achieve Brexit on 31 October, with or without a deal. Our forecast remains a 3% decline for total TV ad revenues for 2019 as a whole, with the risk of a more serious downturn in 2020 in the wake of Brexit.
  • June 14, 2019

    UK Channel 4’s balancing act: 2018 annual report

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    Mindful of the uncertain future effects of ongoing events, most notably the stagnating TV ad market and the costs of establishing an HQ in Leeds, Channel 4 returned a £5 million pre-tax surplus in 2018, which after investment in Box left its cash reserves at £180 million. Increased digital revenue more than made up for the anticipated drop in spot advertising and sponsorship (with group viewing share and SOCI down) while cautiousness necessitated lower content spend (down 5% from the peak in 2016); a concern given rising content costs. Nevertheless, Channel 4 is doing a good job delivering its remit in a tough environment, continuing to broadcast programming no-one else would and leveraging long-standing relationships to nurture television and film of a quality and ingenuity that belies the modest size of the organisation
  • June 5, 2019

    UK HFSS advertising ban consultation

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    The UK government is now consulting on a wider TV advertising ban until 9pm for food and drink high in fat, salt and sugar (HFSS), to combat childhood obesity. TV and TV advertising are not the cause of children being overweight or obese (O+O). Policy change in this area should inform and educate parents and young children, as they have in Leeds and Amsterdam. With 64% of the UK population being O+O, obesity is a complex societal issue requiring a multifaceted approach. The evidence from existing rules, and plummeting TV viewing amongst children, says that further restrictions on TV advertising will be ineffective in curbing the rise of obesity in the UK.
  • February 22, 2019

    Time to create an addressable UK TV market

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    Addressable linear TV advertising, where precision-targeted ads overlay default linear ads, could enhance the TV proposition for advertisers, agencies and viewers, benefiting all broadcasters. In the context of dwindling linear viewing and rocketing online video ad spends, the adoption of Sky AdSmart and similar services on YouView and Freeview could take addressable TV ads from a sideshow to a pillar of revenue. Addressable linear is a bigger and more strategic prize for broadcasters than BVOD ads. Sky holds the key to wider adoption of its AdSmart platform if it can find a way – or a price – to bring ITV Sales and/or 4 Sales on board.
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  • February 11, 2019

    UK TV set viewing trends: linear audiences tumble in 2018

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    2018 was another bad year for traditional TV set viewing of broadcast channels, with a 5% decline year-on-year—its steepest since 2011. The decline accelerated among most demographics, but particularly for 16-34s, down 13% YOY from their already relatively low levels of TV viewing. Unmatched use, which includes viewing to Netflix, Amazon and YouTube, continues to grow, up 16% YOY, with both linear viewing and unmatched use becoming increasingly solitary activities. While heavier linear TV viewers are accounting for a greater proportion of linear TV viewing, it is the lighter TV viewers that are accounting for a greater proportion of unmatched use. Within the broadcast ecosystem, ITV had the strongest 2018 thanks to the FIFA World Cup, more Coronation Street, and Love Island. Most other broadcasters struggled in terms of viewing share, but the maturity of the market means major shifts continue to be rare.
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  • February 1, 2019

    Netflix’s local content push in the UK

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    With the UK perhaps Netflix’s most valuable market outside the US—home to a stellar production sector—the streaming service is escalating its foray into local production, opening a content hub in London and moving from co-productions to direct commissions. As UK content completely dominates UK video viewing outside of the SVODs, to expand subscription reach Netflix is endeavouring to become an alternative to the PSBs’ entertainment output; this local spend is efficient given the universality and worldwide appetite for British content. With a growing proportion of local content expenditure now coming from Netflix and other SVODs, there are ramifications for both broadcasters and producers—loss of viewing, potential market pressure, increased competition for premium content and hesitancy around their own SVOD plans—along with implications for the cultural landscape.
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  • January 21, 2019

    UK advertising spend: Brexit year forecasts

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    Our central case forecast with orderly EU withdrawal predicts 2.7% growth for total UK advertising spend, down from 4.7% in 2018. We have a no-deal Brexit scenario that predicts a smaller advertising recession than in 2009, with total ad spend declining 3% and display down 5.3% in 2019. The total advertising figures partly mask the pressure on UK consumers, through an expansion of the measured advertising spend universe. This is due to significant self-serve online advertising growth by SMEs, and non-advertising marketing budgets moving to online advertising platforms. In a downturn, we’d expect advertisers to become more tactical, which would disproportionally affect display media including TV, which is further affected by declining commercial impacts among younger adults. Search and social advertising would see only small growth through the first year of a recession.
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  • December 12, 2018

    UK TV advertising and consumer health check in Q4 2018

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    Despite the consumer's confidence having been shaken since the referendum vote for Brexit in June 2016, monthly retail sales, especially online, managed to grow above the private consumption trend until this October, a turning point that could mark the start of a retail recession extending into 2019. Since mid-2016, TV advertising and retailing have lost their historical covariance, with TV advertising's recession briefly interrupted in the first half of the year due to sunny weather and the FIFA World Cup. After a flat Q3, we predict a resumption of TV advertising's decline, expected to be down 3-4% in Q4 2018 year-on-year. 2018 will be flat for total TV advertising, still better than 2017. However, the medium's weakness will persist in the first half of 2019, with hopes for a recovery only in the second half, assuming an orderly withdrawal from the EU starts in March 2019.
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  • November 16, 2018

    UK PSB SVOD

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    The Public Service Broadcasters (PSBs) have been mulling a possible SVOD service, a decade after their ad-supported Project Kangaroo was blocked on competition grounds. Even if a reboot between the BBC and ITV were this time to be approved, we do not think Kangaroo 2 can succeed as a significant SVOD entrant in its home turf of the UK, above all because it’s too late. Other flaws in the offer are that it would be too small, non-premium, too old (archive), and too old (viewing profile), plus lacking sufficient financial resource to produce a pipeline of unique series.
  • November 2, 2018

    UK PSB solidarity and collaboration

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    The Public Service Broadcasters (PSBs) are in the process of sliding from TV dominance to middling contenders, in terms of content expenditure and significance to viewers. There are calls from many sides that the PSBs need to collaborate in order to thrive, in an era when global debt-funded SVOD services are making all the running. This note explores what can realistically be achieved by PSB collaboration; where partnerships work best; and the areas best avoided.  
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  • September 3, 2018

    UK Commercial TV impact trends: better than viewing trends, worse [...]

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    There has been no shortage of attention paid to declining TV viewing over recent years, but much of it focuses on overall viewing time rather than advertising delivery. This is to overlook the engine driving most of the UK’s television industry. Commercial impact delivery has held up well relative to overall viewing, and is strong for certain key demographics. Nonetheless there are generational and behavioural changes afoot which are exerting downward pressures on impacts, especially for younger audiences. An archipelago of Love Islands is needed (Stranger Things have happened).

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  • July 24, 2018

    AV ad measurement: meretricious metrics

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    Rigour and consistency in AV ad metrics is proving elusive. A 10-second ad on YouTube, ITV1, All4, MailOnline, Sky AdSmart or Facebook is measured in as many different ways, often indifferently. It is tricky, costly or impossible for agencies/advertisers to comprehend the overall picture. By 2020 JIC-based BVOD ad impressions should be available from BARB all being well, giving BVOD a clear advantage over other premium online video measurement. Google/YouTube seems to be ‘getting’ JIC co-operation now and has begun to galvanise video ad measurement, but forceful advertiser intervention is needed to extend and improve standards. Otherwise, advertisers are simply funding a JIC-free jamboree, and they (with content media) will lose the most.
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  • TV platform forecasts to 2026: DTT and pay-lite set to grow
    TV platform forecasts to 2026: DTT and pay-lite set to grow
    June 29, 2018

    Is CRR still critical to protect advertisers from ITV?

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    The workings of the TV advertising market are a mystery to most. Overlaying an arcane ‘share of broadcast spend’ trading mechanism is regulation in the form of CRR, which has prevented anti-competitive activity by ITV since 2003. CRR will protect advertisers ‘for as long as needed’. Most advertisers we canvassed believe it should stay in place, but the sell-side and auditors say CRR has passed its ‘Best before’ date and is heading towards its ‘Use by’ date. We propose a review of CRR by the Competition and Markets Authority (CMA) to determine whether it is now helping or hindering the TV advertising ecosystem to become fit-for-purpose for the digital age.
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  • June 28, 2018

    The home screen: distribution, discovery and data on connected TV [...]

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    The TV, the main screen in the house, is rapidly becoming connected to the internet, opening a new front in the battle for people's attention. Tech players, pay-TV operators, and manufacturers are all aiming to control the user interface, ad delivery and data collection, leaving incumbent broadcaster interests less well represented. To protect their position, and the principles of public service broadcasting, broadcasters will have to work with each other at home and in Europe to leverage their content and social importance.  
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  • May 14, 2018

    Video viewing forecasts to 2027: continued divergence by age grou [...]

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    Our latest forecasts predict traditional broadcasters will account for 72% of all video viewing in 2027, down from an estimated 82% in 2017, reflecting the continuing adoption of online video services across all UK age groups. Additional viewing of online short-form content such as YouTube will keep pushing overall volumes higher, with SVOD services serving more as a substitution for linear TV. The extent will be greater among younger age groups, for whom the shift has already been significant. We predict that in 10 years just 42% of 16-34s’ total viewing will be to conventional broadcasters versus 91% for the over-55s.      
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  • April 12, 2018

    TV set viewing trends: ‘Unmatched’ viewing growth and cha [...]

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    Despite the continued decline of linear TV set viewing through 2017 (-4%) and the first 12 weeks of 2018 (-3%), overall TV set usage remains flat at 4 hours/day due to the continued rise of unmatched activities (+19% in both cases). We consider the recent growth of unmatched use to be predominantly due to viewing of online-only services (i.e. Netflix, Amazon and YouTube), since time spent gaming is unlikely to have changed dramatically. The increase in unmatched usage since 2014 exceeds the total viewing to the most-watched broadcast channels for all age groups under 35. Within the shrinking pie of consolidated TV set viewing, market shares remain broadly flat. However, several key digital channels have shown surprising signs of recent decline, reflecting stalling growth from the multichannel long tail versus the main PSB channels.
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  • March 19, 2018

    UK addressable TV has more to deliver, while online video posts r [...]

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    The market for addressable TV looks constrained despite its benefits, with Sky AdSmart taking less than 2% of overall TV ad revenues. Meanwhile, online video revenues for Google, Facebook and others have surged dramatically. Agencies are seemingly enraptured by online video – a highly profitable medium to buy – despite concerns about a lack of effectiveness, safety and transparency. For broadcasters to compete better radical collaborative action is needed including industry-wide adoption of AdSmart, and overhauling the trading arrangements which hinder its take-up.
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  • February 19, 2018

    Advertising: this year, next year

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    We forecast UK display adspend to grow by 3.1% in 2018 (<1% in nominal terms), with TV roughly steady, newspaper decline slowing and digital growth slowing a little. Households are facing an income squeeze and the ability of debt and credit to carry them over is reaching its sensible limit. Brexit-related uncertainties remain the single strongest drag on business investment, dampening ad spend. TV spend is the £5bn question. While live viewing continues to decline, TV delivers against different marketing objectives from precisely targeted online inventory, and rapid broadcaster VOD growth will help hold TV spend steady.
  • January 9, 2018

    Video on demand insights: Netflix, Amazon and the iPlayer

    Even with the decline in linear television viewing, online video remains a small component of total video consumption. The growth area is unsurprisingly SVOD; subscription video now makes up about two thirds of the UK's digital video spend. Netflix is moving from an aggregator of content to a "channel" in its own right, increasing proportionate spend on original programming, something that the public service broadcasters are unable to do for differing reasons. Amazon had a tough 2017 for video, and are still struggling to create a hit. New Nielsen audience data suggests that the long-term "library value" of Netflix's originals may be overstated, while the BBC's iPlayer continues to be hampered by not really having a library at all.    
  • December 5, 2017

    Channel 5: three years on from Viacom’s acquisition

    Viacom’s 2014 acquisition of Channel 5 from Richard Desmond’s Northern & Shell occurred while the maelstrom encircling linear television viewing—sparked by the allure of SVODs and other digital distractions—was well underway. Nevertheless, with increased content spend, development of new titles and clarity as to its targeted audience, the broadcaster has increased its channel (and group) share amongst 16-34s and ABC1s, and has directed further benefits back to its owner's existing entertainment suite. Outside of the post-lunch and 8-10pm slots, however, work needs to be done: Channel 5’s BVOD proposition and social media offering leaves much to be desired, while the reliance on two major titles, Big Brother and Neighbours will be unsustainable in a post-linear world.
  • December 1, 2017

    UK TV set viewing trends

    BARB data indicates that the amount of average daily TV set viewing to linear TV channels is continuing to fall: the pie is shrinking. Just under 20% of TV set usage so far in 2017 is to non-linear activity, and viewing to SVOD services and YouTube is likely to account for most of this growth in 'unmatched' viewing. The pie is shrinking faster amongst younger audiences: just under one third of TV set usage is 'unmatched' now for 16-34s. However 35+ unmatched use is growing at a faster rate than 16-34 unmatched use in 2017. Within this smaller pie, the PSB channels continue to hold share of viewing against pay channels. Within the PSBs, ITV and the ITV digital channel family have gained most share so far this year, although BBC1 is having a strong autumn in spite of the loss of Great British Bake Off to C4.
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  • November 13, 2017

    PSB: Working with the frenemy

    Public service broadcasting (PSB) and the entire unique broadcasting ecosystem face huge challenges from global tech giants with deep pockets, data insights and scant regard for PSB prominence. All three pillars of the PSB model are threatened: content supply, distribution and advertising. The further threat of digital terrestrial TV (DTT) spectrum being reduced or turned off in c.2030 is real and PSBs must have a migration path in place. PSBs can counter some challenges through increased investment in content relevant to the UK consumer. But, recognising the aligned interests with pay-TV platforms of Sky and Virgin Media, collaboration between the parties is integral to the long-term future of PSB
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  • Mounting risks to marketing effectiveness
    Mounting risks to marketing effectiveness
    October 20, 2017

    US ISPs hail the end of online privacy rules

    The Federal Communications Commission’s Privacy Order (FCC) was overturned by the Senate, clearing the way for ISPs to ramp up consumer data-driven advertising revenue. While Google and Facebook dominate digital advertising in the US as in other markets, the US is alone in removing regulatory barriers to ISPs taking a piece of the pie. US ISPs now have a self-regulatory regime for consumer rights on transparency, security and data breaches; but in the UK and EU, privacy advocates prefer enforceable rights