The Communications Market Report: International
UK a nation of hi-tech TV lovers
Global communications sector revenues the total of the telecoms, TV, post and radio sectors - grew in 2011 by 3.7%, reaching £1,322bn. Telecoms sectors generated the largest absolute rise in revenues in 2011, up by £31bn to £936bn. In terms of percentage growth, television revenues grew fastest among the communications industries, by 6.6% in 2011 to £258bn.
Global advertising expenditure grew by 3.8% in 2011 to £298bn, the highest total spend since 2007. While expenditure on internet advertising grew at a compound annual rate of 16.0% between 2007 and 2011, to £48bn, the compound annual growth rate of newspaper advertising was -6.9% falling to £60bn, while for magazines it was -6.8%, falling to £28bn.
In the television and radio sectors, subscriptions generated the largest and fastest-growing proportion of total revenues in 2011. Television subscription revenues grew by 10.5% in 2011 to £133bn and at a compound annual rate of 9.0% between 2007 and 2011. Radio subscription revenues grew by 12.5% in 2011 to £2bn and at a compound annual rate of 8.5% between 2007 and 2011.
The number of fixed-line voice connections remains relatively resilient in the UK, with more fixed-line voice connections per 100 people than in the other markets covered. Although this number fell between 2006 and 2011 in all of the countries which we surveyed, the fall in the UK was among the smallest. Tablet take-up is highest in Spain and Australia (it is 24% in both). Italy and the US have the next-highest claimed ownership (23% and 20%) while in the UK take-up is 19%.
In nearly all comparator countries, consumers say they have reduced face-to-face communication and fixed telephone calls with friends and family. In all eight countries, use of post declined. In contrast, preferences for online communications increased, particularly in the UK and Italy, which showed large increases in the use of email and social networking.
Prices in the UK compared favourably to those in the other five countries covered by our price benchmarking work. All five of the lowest weighted average single-service basket prices and four of the five lowest possible basket prices were found in the UK.
Low basket prices in the UK were largely due to mobile prices being the lowest among our six countries. The UK also benefits from comparatively low fixed voice, fixed broadband and mobile broadband prices.
France also performed well, having the lowest 'best-offer' including multi-play price for our 'connected family' household, and the second lowest 'weighted average' prices for all five households. The 'connected family' 'best-offer' price in France was significantly cheaper than in the UK as a result of the availability of a low-cost quad-play bundle of fixed voice, fixed broadband, mobile and pay-TV services.
There is some evidence that UK communications service prices are increasing, in nominal terms at least. In the year to July 2012 the weighted average cost of four of our five baskets increased in the UK in nominal terms, while in France (where weighted average prices were next lowest) the cost of all five fell.
In the UK, the main driver behind increasing weighted average basket prices was increases in mobile prices. The weighted average cost of more than half of the mobile connections increased in the year to July 2012 in the UK, with these increases ranging from 5% to 31% in nominal terms.
Global TV revenues increased in 2011, by 6.7% year on year, to £258bn. Global subscription revenues show little sign of slowing down and increased for the fourth consecutive year, from £95bn in 2007 to £133bn in 2011 a compound annual growth rate of 9%. The global recovery in net advertising revenues seen in 2010 has been sustained in 2011, with revenues increasing by 3.5% (or 3bn) to £105bn year on year.
By the end of 2011, the vast majority of homes had digital television in the UK, France and Spain. In the UK, 99% of TV homes had access to digital TV at the end of 2011, a figure surpassed only by Spain where, following the completion of switchover, access to DTV stands at 100%. Digital switchover in the UK was completed in 2012. In France, penetration of digital TV stood at 97% in 2011.
In the UK, satellite TV (including Freesat) was the largest platform (44% of TV homes) while terrestrial TV was the main platform in 38% of TV homes. Digital satellite was also the most popular platform in Germany, Ireland, Poland and Brazil. While digital satellite may not be the top technology choice in many countries, it is often the second most popular platform, taking second place in ten of the 17 countries in our report.
Value-added services such as digital video recorders and high definition TV continue to grow in the UK. Of the nine countries surveyed, the UK recorded the greatest uptake in DVRs (39%) in 2011, followed by the US (32%) and Australia (29%). The UK also has one of the highest proportions of TV homes with high definition – at 41%, higher than France (18%), Germany (28%) and Japan (31%), but behind the US (49%).
UK consumers are most likely to access TV content over the internet, compared to other countries in our research. Almost a quarter (23%) of UK internet users claimed to do this every week driven by the popularity in the UK of internet TV catch-up services from the free-to-air broadcasters, such as BBC iPlayer, 4oD and ITV Player. The US ranked second, where 17% of internet users claim to access TV content over the web on a weekly basis.
The UK has the third highest level of scheduled linear TV viewing, of the comparator countries, at four hours per person per day. Despite the increase in online TV, scheduled linear television remains popular, with minutes of viewing per person increasing among most comparator countries. Only Italy (253 minutes per person per day) and the US (293 minutes) watch more television than the UK.
Broadcast radio revenues among the 17 comparator countries analysed in this report reached £25.4bn in 2011, up by 1.6% year on year. The largest absolute increase was experienced by operators in the US, where revenues rose by £115m, followed by the Chinese market which grew by £89m. UK radio revenue rose £39m in 2011.
Among the countries that we surveyed, digital radio take-up is highest in the UK. Thirty-one per cent of consumers in the UK own and personally use a digital radio set, compared to 16% in Italy and 12% in Spain.
Radio revenue worldwide rose slightly (1.7%) in 2011 and now stands at £29.5bn. Of the total, advertising accounted for 68% (£20.0bn), public funding for just over a quarter (26% or £7.7bn), and subscriber revenue contributed the remaining 6% (£1.8bn).
Our consumer research found that radio listening is a popular activity among internet users in the countries which we surveyed, with the exception of Japan and China. The research found that 69% of UK adults who are connected to the internet claim to listen to radio on a weekly basis, on a par with Australia but slightly behind the other European countries surveyed. Across all of the countries surveyed, consumers are still more likely to listen to the radio on a regular basis than consume audio content on a portable media player or hi-fi.
As a news source, radio is used most for news about a region or locality. It is most popular among people in Germany, where 10% claimed it as their main source for local/regional news, and ranks second in Australia, where 7% made the same claim. In the UK, the comparable figure is 4%.
Using the MP3 function was the most popular audio purpose which mobile phones were used for in 2011. In China, over half (53%) of online respondents used their phone for this purpose, followed by 32% of consumers in Spain. Almost three in ten (28%) people in the UK used their phone to listen to MP3s.
Spend on laptop and desktop internet advertising is highest in the UK. The UK had the greatest spend per head of £76 on wired internet advertising in 2011, followed by Australia with £73 and both the US and Sweden with spend per head of £63.
UK internet users access the web on their laptop more than those in any other country. Fifty-one per cent of internet users in the UK use their laptop computer to access the internet. In contrast, France had the largest proportion of internet users (51%) who access the internet most frequently on their desktop computer, while the UK had the least (37%).
Twelve per cent of UK internet users claim to access the internet most through smartphones, tablets and other connected devices. 16.4% of internet traffic is generated from these devices in the UK, more than in any other of our European comparator countries. Ireland had the second highest proportion (11.5%), while and Poland had the lowest (2.2%).
The most searched-for term on the web is facebook. In all of our comparator countries except Japan, Russia and China, facebook was the most searched-for term on Google in the year to August 2012, up from ten countries in the year to August 2011. However, Facebook was not without influence in Japan, where facebook was the fastest-rising search term in the year to August 2012.
Consumers in the UK spent more than £1000 per person on internet shopping in 2011, more than in any other of our comparator nations. In 2011, the value per head of business-to-consumer e-commerce was £1083 in the UK, up by 14% from £950 in 2010. Australia and Sweden had the greatest values after the UK, growing 26% to £842 and 12% to £747 respectively.
The UK consumed the most mobile data per connection. 424MB of data was downloaded per mobile connection in 2011: more than in any of the other comparator countries.
The UK is one of the leaders in text messaging among our comparator countries. The average person sent 199 SMS messages per month in 2011, up 17% compared with 2010. Young women are leading the increase, which is fuelled by consumers apparently switching from voice to SMS for convenience and ease.
Fixed voice revenues fell in all our comparator countries in 2011. Across all 17 comparator countries, fixed voice revenues fell by an average of 7.3% in 2011, a slight increase on the 7.1% average in 2010. Fixed voice revenues fell by 5.2% in the UK during the year, a higher rate that the 3.3% average in the five years to 2011.
Fixed voice call volumes fell in all of the comparator countries for which figures were available in 2011, except France. Growth in the fixed voice market in France was largely a result of high take-up of managed VoIP services. In the UK, fixed voice call volumes fell by 10.0% in 2011, the fourth largest decline among our comparator countries.
Five per cent of UK broadband connections were superfast at the end of 2011. The proportion of connections classed as being superfast (i.e. with a headline speed of 30Mbit/s or more) ranged from 0% (to the nearest percentage point) in Ireland to 22% in the Netherlands at the end of 2011. Poland and the UK had the lowest fixed broadband revenue per person in 2011.
Mobile voice call volumes fell by 1.1% in the UK between 2010 and 2011; from 125 million minutes to 124 million; the first annual fall. Japan was the only other country to witness a decline in 2011, with mobile voice volumes falling from 147 million minutes to 145 million.
Across all of our comparator countries as a whole, mail revenue fell by 1.5% in 2011, ranging from a 16.1% contraction in Poland to 9.4% growth in Brazil. Revenues grew in only four of 17 of the countries analysed in our report; the UK (3.1%), Brazil (9.4%), Russia (8.8%) and India (6.6%).
Across our 17 comparator countries, mail volume has fallen by 18% since 2006. Taken as a whole, volumes have fallen from 355 billion to 288 billion items. The UK, Italy and Spain have seen the largest declines, with mail volumes in each falling by 25% from 2006 to 2011.
More consumers in the UK claim to receive large parcels than in the other countries which we surveyed. Thirty-four per cent of UK consumers claimed to have received a large parcel in the past month, higher than in any other country surveyed. Forty-six per cent of UK consumers claimed to have received a small parcel, second only to France (53%). As well as having the highest proportion of consumers receiving parcels, the value of e-commerce per head of population in 2011 in the UK is higher than in any of the other countries surveyed.
For sending a standard-sized letter, the UK is among the cheapest in Europe. But for sending small letters, the UK and Japan are the most expensive countries; this is 63p in Japan and 60p in the UK.
Seventy-four per cent of consumers in France consider themselves very reliant or fairly reliant on post as a way of communicating, higher than in any other country. In the UK, 51% of consumers considered themselves to be reliant on post. The lowest perceived reliance on post was in Japan, where only 14% of respondents considered themselves reliant.