Streamer revenue soared again in the UK last year, with Prime Video generating more than £1B ($1.28B) for the first time, according to Ofcom‘s Media Nations Report, but commercial nets saw turnover tumble to a four-year low.
Combined revenue for the deep-pocketed U.S. giants shot up by 20% — akin to the prior year — to top £4B ($5.13B), and this figure now has doubled since the start of the pandemic, the regulator’s annual report revealed.
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Prime Video — which produces the likes of Clarkson’s Farm and The Rig out of the UK, where it makes The Lord of the Rings: The Rings of Power — was the big winner, with turnover rising by almost one-third to top £1B for the first time, nearly tripling since counting began in 2018. The news will be welcomed by an Amazon team fresh off the back of the splashy purchase of Lord of the Rings studio Bray, only the second studio in the UK to be owned by a major U.S. player.
Netflix revs were up by a far smaller 4% to £1.7B and Disney+‘s rose by nearly 19% to £455M. There was also a near-doubling of turnover for “other” streamers, which includes the likes of Apple TV+, Discovery+ and Paramount+, with that figure now eclipsing Disney+’s at £525M.
In a year impacted by the economic slowdown and U.S. labor strikes, Ofcom put the rocketing revenue down to “a maturing SVoD market bringing profitability into sharp focus for all the key players,” as it pointed out that subs numbers had virtually plateaued, with 68% of households subscribing to any streamer, and 58% to Netflix.
Where profitability and revenue is concerned, streamers have hiked up prices, cracked down on password-sharing and brought in ad tiers, Ofcom said. The latter measure was alone estimated to have generated £50M in the UK.
Netflix remained comfortably on top in terms of daily viewing, with big hitters including Beckham, The Night Agent and Bodies securing top numbers, while there was less good news for Prime Video by this metric, as it was overtaken by Disney+. The most-watched streamer title was Netflix’s Chicken Run: Dawn of the Nugget with 7.5 million viewers.
Year to forget for commercial nets
For the commercial nets, Sky and digital channels, 2023 was a year to forget.
With both ITV and Channel 4 having announced layoff programs in 2024, combined turnover for the pair plus Channel 5 was half the streamers at just £1.9B in 2023, falling 15% to its lowest level since the first year of the pandemic. When Sky and digital channels such as UKTV are thrown into the mix, total combined turnover tumbled to a 12-year low of £10.2B.
Ofcom cited “the challenging macro-economic environment significantly colouring the performance of the commercial PSBs as well as many digital multi-channels, which rely primarily on income from advertising.” Revenue at Britain’s production houses was also down 10% to £3.4B in what was a difficult year for indies.
A “better 2024” was forecast as the ad market improves, and this could be seen in ITV’s half-year results last week, with profits rocketing 40%.
The tricky financial backdrop led spend on originals for the British broadcasters to fall by 5% during the first year “the effects of the pandemic did not play any significant factor,” Ofcom said.
Spend on TV shows and sports fell by 5% to £2.7B, with ITV the only network that increased spend, though this should be set in the context of 2023 being a fallow year for major sporting events. With that in mind, investment on drama and comedy rose slightly, while money from co-producers for splashy drama projects was up by £33M. Reflective of rising costs, the actual number of high-end TV projects simultaneously fell by 17%, likely affected by the U.S. strikes, which lasted for most of the second half of the year. Big co-produced shows included House of the Dragon and Silo.
In terms of viewing, linear TV fell again but no more precipitously than prior 12-month periods, continuing to reflect an overall shift in viewing habits.
The proportion watching broadcast TV each week fell from 79% to 75%, with the figure for 16- to 24-year-olds dipping below the 50% mark for the first time.
On the other hand, the broadcasters might have been delighted to see “strategy updates” to broadcaster VoD (BVoD) platforms such as iPlayer and ITVX realized as viewing to these platforms shot up by 29%. Ofcom stressed, however, that “the rapid growth in total BVoD viewing in 2023 was not enough to compensate for the large slide in viewing of broadcasters’ linear channels, which nevertheless continues to account for a large majority (87%) of total viewing of broadcaster content.”
The news genre saw the steepest viewing decline of 16 hours per individual, put down to a combination of an increase in social media news consumption and “decrease in the overall level of interest in news.” Broadcasters will be hoping these declines are reversed this year as interest turns to general elections in the UK and U.S.
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