MIND THE GAP

A COMPREHENSIVE LOOK AT UK VIDEO VIEWING

Happy Monday Peaceniks. It’s Tea Time!

I am concerned about the state of TV in the UK. I am concerned as in involved – I have spent a good deal of time and energy focused on UK TV in the last few years, working with various organizations and companies there, poring over data, and offering advice on strategy when asked, and even when not asked. I am concerned as in apprehensive – the UK’s television ecosystem is not just important to the UK, in my studied opinion, the British TV community provides some of the best and most important television and film content in the world. Specifically, the BBC is now the only reliable, global, independent English-language video news organization on the planet. Generally, the UK production and commissioning community makes many of the highest quality entertainment programming and formats in the world. I feel this is all at risk. And I am concerned – alarmed that many who work in and run the UK TV business are not as fully aware of the specific risks the ecosystem faces and are complacent about addressing them.

I have written and spoken about this often. This led me to a collaboration with Barb, the UK’s Joint Industry Data Currency, to create a report on the state of viewership in Britain, granting me access to data about what Brits watch and where. Barb’s combination of panel-driven and screen-level big data across four screens (TV, mobile, Tablet, and PC), as well as the participation in data collection from all the video operators in the territory, make Barb the perfect partner to create this first-of-its-kind report - and offer me a thrilling collab.

YOU CAN DOWNLOAD THE FULL TOTAL VIEWING REPORT HERE.

This report, and the follow-up we will issue next year, are meant to offer a first-time, apples-to-apples view of how and what UK audiences of all ages watch. Barb’s intention is to make sure this data is seen and read. My intent is to provide a wake-up call to my colleagues across the pond about the trends that will have seismic effects on what they do and what they make. First, a wee bit of context…

It is important to start by understanding who lives in the United Kingdom. In context of the entire planet, the British are old. 55% of the world’s population is under 35. Conversely, just 58% of Brits are over 35.

This means that Millennials and GenX make up a smaller share of heads of households and represent a smaller share of earnings and purchasing decisions in Britain than in other countries, including the US. This is key data to keep in mind as you look at the viewing habits and the shifting trends in the UK.

I find that I must often remind those to whom I’m speaking that generations age. Contrary to what many Gen Xers and Boomers think, Millennials are not children, they have children. Below, we segment viewing by age groups. As you read the data, please remember that Millennials are now aged 28-43. Also note that the eldest members of Gen Z are now 27; many are now in the workforce, and increasingly they will be heads of households, who don’t just decide what to watch, but how to watch and what they do or do not pay for it. In ten years, Generation A will begin turning 25.

There is a massive generational shift happening in Europe, a few years behind the US. And as Millennials and Generation Z continue to take over households, the workforce, companies and the government, they will bring their current viewing/purchasing habits with them. As will their children.

In this report, we have divided the data into distinct age groups to show how viewing habits of each differ, but also to demonstrate the wave of change that is coming to the television and video universe in the UK. It is vital to keep in mind those under 40 are the minority today. But that will change, and it likely will bring a tsunami of change with it.

Public Service Media has a long, storied, and ingrained legacy in the UK. Because these platforms – BBC, ITV, Channel 4, and Channel 5 – are all free (relatively speaking, as the British public do pay an elective “license fee” which funds the BBC), viewership of Broadcast remains much stronger in the UK (and across Europe for that matter) than it does in the US. On the other hand, Pay TV has much less history, habit, and loyalty in Britain. Ergo, it is unsurprising that pay channels garner less viewing than their American counterparts.

This creates a very different television and viewing environment in the UK than in America. The most important case study would be sports, where FIFA Football airs on Public Broadcasters, Premiere League plays on Sky and TNT Sports, and the Olympics are mandated to air on Public Broadcasters. Additionally, BBC’s public funding, without the need to sell advertising or acquire subscribers, allows them to invest in those British dramas we all know and love. The other Public Broadcasters do not enjoy the benefit of the public license fee but are required to be free. So, ITV, Channel 4, and Channel 5 must rely far more heavily on advertising sales, competing directly with the likes of Comcast, YouTube, TikTok, and Meta for not just attention but ad dollars.

And then there’s demography.

Older viewers, who stream less and use less Social Video, watch substantially more Broadcast than those on the younger end of the compendium. They also make up a greater percentage of the population and viewing audience in the UK than they do in the US, and so, their habits influence total viewing in a disproportionate manner. But this will not last forever.

Keep all of that in mind, as you dive into the following data.

The sizable gap in viewing habits for the populations over and under 35 is very much worth minding, for numerous reasons.

Crucially, the divergence of these audiences has created enormous economic pressures for the Public Media that are not the BBC. Channel 4, Channel 5, and ITV have all experienced difficult times in the last few years, driven in substantial part by the steep competition from streamers and Social Video platforms – which now combine for nearly 50% of total UK viewing time and more than 80% of watch time for the important 16–34 demographic. Just as significant is the rise of Streaming among all age groups, growing fastest among eldest UK viewers; and a simultaneous drop in Broadcast and Pay TV, even with viewers older than 35.

Social Video (which includes YouTube on the TV) is growing even with older audiences, but especially with Brits under 35. Of note are the rise of TikTok and growth of YouTube viewing on TV – more than 40% of YouTube viewing in the UK is on connected TVs. Social Video now comprises more than 20% of total UK video consumption and is the most-watched format for all UK audiences under 35. This ratio may shift as generations age. However, considering that Millennials are now 28-43 and that usage has grown 22% in absolute terms with viewers 35+ in the last two years, one can expect Social Video to continue to play a central role in the UK video economy.

Streaming usage is growing across age groups. However, that growth is primarily driven by audiences over 35, as older Brits adopt the streaming habit and as Millennials age into the older demo. Among younger viewers, despite the addition of new services, Streaming growth appears to be slowing.

While the BBC remains in a strong position overall, YouTube is now the #2 platform for total viewing in the UK, surpassing ITV in the last 18 months. The data makes quite clear that most Broadcast and Pay TV viewing comes from older audiences. Streaming platforms, on the other hand, are pulling in a range of demographics, but appeal more to younger viewers. We should note that BBC Kids does demonstrate some pull with audiences under 15 yet still lags YouTube and Netflix.

One of the bigger stories in the data: YouTube is now the second largest video platform in the UK, after only the BBC, and the “Social Video” platform now ranks third, ahead of Channel 4, Channel 5, and Sky with audiences over 35. For that reason, to understand the competition correctly, the UK (and global) television industry must now consider YouTube a TV channel. With Millennials and Gen Z, YouTube and TikTok now rank first and third, bookending Netflix, and beating out all Broadcasters and Pay TV providers.

In the first half of 2024, for all audiences under 35, YouTube pulled in more watch time than all the Broadcasters – combined. Mind the gap indeed.

It should be noted that YouTube and TikTok usage is ONLY in home on WiFi. Imagine the shift in share WITH out of home!

A key subplot: Netflix’s share of viewership is flat from 2022 through 2024, held firm only through adoption by older viewers, while its share of viewing (along with Amazon’s) has fallen a significant amount with audiences under 35. Most of that share of voice has gone to Disney+, which has grown in total viewing driven primarily by Brits 34 and younger. This should be a concern for Netflix, as the competition for subscribers, audiences, and advertising will only get more steep in the next five years.

Public Broadcasters have fully entered the Streaming wars with CTV apps, but most have not fully embraced Social Video enough to offset the loss of viewers or ad dollars. And now that the premium streamers are adding advertising tiers, one can expect the battle over ad-supported viewing to accelerate.

It is hard to say how the battle for premium Streaming subscribers and ad dollars will play out. Amazon and Netflix have indicated they will continue to spend to capture the hearts, attention, and dollars of the British populace. Based on their recent growth, Disney’s brand obviously has a strong pull among younger UK consumers; however, it is unclear if they can dedicate the resources to go head-to-head with Big Tech. The data indicates that total growth for premium SVOD in the UK is slowing, particularly with younger audiences, despite new offerings entering the market.

The larger quandary for the UK television ecosystem: Can the Public Service Broadcasters and Pay TV channels reverse their downward trend and manage to gain relevance for the younger three generations of Britons? If so, how? If not, what happens?

The eldest members of the 16-34 cohort are proper adults and Millennials now make up a sizable share of audiences 35+. As they age, some habits will change. However, Brits’ usage of social media is not only solidified but expanding (TikTok is now a search engine, YouTube is now a TV network) and it now competes equally well with both traditional TV and Streaming.

Yet, in this trend, there is an advantage and an opportunity for Public Media and Pay TV players: YouTube as Broadcast partner and TikTok as marketing machine.

For years, WBD and BT Sport aired the Champions League finals on YouTube. For the past year or more, Channel 4 has been adding complete episodes of their premium series to their YouTube channel. All the available data points to de minimis audience cannibalization from these experiments as well as ample additive viewers – younger audiences attractive to advertisers. To me, the strategy for these players is clear: Recognize the real competition is on Social Video, and rather than trying to beat them, join them.

Thanks to BBC’s iPlayer, the UK was an early adopter to TV Streaming. The newly released Freely is another prime example. Total share for on demand Streaming grew from 38% to 44%, for absolute growth of 16%, since 2022. The increase was primarily driven by older viewers catching up to their younger counterparts. Among audiences 35+, Streaming grew 26% in absolute terms, by far the fastest of any cohort. Note that more British Millennials (now 28--43) age into this demographic each year, bringing their video habits with them. Streaming grew from 73% to 79% among 16-34-year-olds; and 76% to 79% with audiences 4-15. While these are massive numbers, the rate of growth among younger Brits is slowing at the very moment competition in Streaming intensifies, creating a share battle between Big Media and Big Tech.

Live Broadcast and Pay TV viewing have fallen dramatically since 2022. In total, Broadcast and Pay TV dropped -12% and -17% respectively in absolute terms and -27% among viewers 16-34. As GenA (2-15) continues to age into that group, expect Broadcast and Pay TV usage to decline at a faster rate.

Live viewing of sports in the UK will undoubtedly remain vital – on Broadcast, Pay TV, and Streaming. However, for entertainment programming (even for big hit series), the “On Demand Mindset” is solidifying its hold on British audiences. This viewing habit already dominates with younger consumers. But older viewers are catching the on-demand Streaming bug. And as mentioned, generations do age. So, as British Millennials, Gen Zers, and Generation A take increasing control of UK video consumption, these trends will not just continue, they will accelerate. To keep up, Broadcasters and Pay TV providers will need to adapt or face a mass migration from their platforms to paid and free Streaming as well as Social Video.

This is one reason we will issue another report early in 2025, wherein we will track additional datapoints, including the balance between the “bonfires” of always on content versus expensive, hit-driven “fireworks.”

YOU CAN DOWNLOAD THE FULL TOTAL VIEWING REPORT HERE.

After crafting this report, I remain concerned about UK TV - and I am even more committed to reporting the changing behaviors of British audiences and offering insights on what that means to the British television and film community. The last era of Media was defined by His Master’s Voice. This, the User-Centric Era, is defined by Our Audience’s Voice. Data, like this from Barb, is the audience’s voice. UK viewers are telling us, loudly and clearly, what they want and where they want it. The question now is, are those who run UK TV listening?

I hope this report offers you as much value as researching and writing it gave me.

Pip pip. Cheerio!

ESHAP