Pay TV phase three document - Stakeholders - Ofcom

Pay TV phase three document – non-confidential version
Figure 2 Multi-channel penetration (main TV set)
Million
households
25
Source: 1989-1996 data from ITC, platform operators and BARB for July of each year; 1997 from Sky
and ITC reports; 1998-2007 data from Ofcom estimates, platform operators and GfK research for Q2
of each year; for 2008, the figure is based on GfK research and relates to Q4.
3.11 We observed that the increased importance of retail pay TV services to consumers
has been reflected in a substantial increase in the importance of the associated
revenues to industry. Since 2004, pay TV subscriptions have made up the largest
revenue stream within TV broadcasting. In 2008, current estimates suggest that
subscriptions reached £4.6 billion, exceeding the revenue generated by TV
advertising (£3.2 billion) and public funding (£2.7 billion). More recently, pay TV
subscriptions appear to be relatively resilient to the current recession, continuing to
rise in real terms year-on-year, while television advertising revenue experienced realterms
reductions in the final two quarters of 2008.
3.12 We noted that there have been a number of important developments recently,
including:
38
20
15
10
5
0
1989 1991 1993 1995 1997 1999 2001 2003 2005 2007
� The consolidation and restructuring of the historically fragmented UK cable
industry under the Virgin Media brand.
Free digital
terrestrial
Pay digital terrestrial
Free-to-view digital
satellite
Pay analogue cable
Pay digital cable
Pay analogue
satellite
Pay digital satellite
� The emergence of new platforms for delivering pay TV services (BT Vision, Top
Up TV, Tiscali / Homechoice) based on new distribution technologies.
� New platforms are also emerging for the delivery of multichannel free-to-air
services, and some of these also have the potential to deliver pay TV services
(e.g. Freesat, Canvas).
� The intervention by the European Commission to change the way in which
Premier League football rights are sold. The 2007/8 football season was the first
since 1992 for which Sky has not owned these rights exclusively.