UK Digital Broadcasting

UK Digital Broadcasting

The digital revolution continues to affect both television and radio broadcasting in the UK. By the end of the decade, the `switchover' from analogue to digital television will be nearing completion, and over half of households will have access to digital radio (digital audio broadcasting or DAB) which, like digital television, offers far more stations, interactivity and much clearer reception than analogue broadcasting.

In fact, millions of households have already taken up the digital television option through one of three broadcasting technologies: Sky Digital (satellite dishes), Freeview (terrestrial signals to set-top decoders), or digital cable. For radio, over 5 million DAB receivers were in UK households by early 2007.

Although broadcasting is being transformed technologically, the status quo has largely been preserved in terms of major broadcasters. The BBC's charter has been renewed until 2016, including its funding by the Licence Fee. Sky remains dominant in satellite, while ITV is the outstanding commercial television company on the ground. Deregulation has also allowed radio companies to merge, producing giants such as GCap Media and Emap, although the BBC maintains radio leadership.

One major industry change in 2006 was that cable, which has had a lower uptake than satellite for Freeview, passed to a new, combined force under the Virgin Media name.

The significance of Virgin Media is that it offers consumers three digital communication options: cable television, broadband Internet and telephony (mobile or landline). The new company symbolises the most important trend in broadcasting, which is the convergence of reception equipment (televisions and radios) with other consumer electronics: home computers, mobile phones and even games consoles.

Downloading, podcasting and other `narrowcasting' technologies will challenge traditional broadcasting in future, but the status quo has also been preserved in terms of popular programming, ignoring the technology. Mass-audience `event' broadcasts are as popular as ever (e.g. reality shows, such as Big Brother, soaps like Coronation Street, blockbuster movies being shown on television for the first time and charity events, such as Red Nose Day). Culture lags behind the technology so that even BBC staples, such as The Archers and Match of the Day are not threatened by the brave new world of digital media.

1. Market Definition
REPORT COVERAGE
MARKET SECTORS
Television
Radio
MARKET TRENDS
ECONOMIC TRENDS
Population
Table 1: UK Resident Population Estimates by Sex (000), Mid-Years 2002-2006
Households by Size
Table 2: Households in Great Britain by Size (%, million and number of people), 1971, 1981, 1991, 2001 and 2005
Gross Domestic Product
Table 3: UK Gross Domestic Product at Current and Annual Chain-Linked Prices (£m), 2002-2006
Inflation
Table 4: UK Rate of Inflation (%), 2002-2006
Unemployment
Table 5: Actual Number of Unemployed Persons in the UK (million), 2002-2006
Household Disposable Income
Table 6: UK Household Disposable Income Per Capita (£), 2002-2006
Market Position
Table 7: Penetration of Popular Leisure Activities In the Home by Sex (% of adults), 2006

2. Market Size
The Total Market
By Market Sector
Television — The Home Viewing Market
Expenditure on Home Viewing
Table 8: Consumer Expenditure on Home Viewing Equipment and Services in the UK (£m), 2002-2006
Figure 1: Consumer Expenditure on Home Viewing Equipment and Services in the UK (£m), 2002-2006
Viewing Equipment
Viewing Services
Viewing Patterns
Table 9: Hours of Live Terrestrial Television Viewed (hours daily and index 1991=100), 1991, 1996, 2001-2006
Radio — The Home Listening Market
Expenditure on Home Listening
Table 10: Consumer Expenditure on Home Listening Equipment in the UK (£m), 2002-2006
Figure 2: Consumer Expenditure on Home Listening Equipment in the UK (£m), 2002-2006
Listening Patterns
Advertising and Sponsorship Revenues
Table 11: Advertising Revenues for Commercial Television and Radio at Current and Constant 2000 Prices (£m), 2002-2006

3. Industry Background
Recent History
Number of Companies
Table 12: Number of UK VAT-Based Enterprises Engaged in Radio and Television Activities by Turnover Sizeband (number and %), 2004 and 2006
Employment
Table 13: Number of UK VAT-Based Enterprises Engaged in Radio and Television Activities by Employment Sizeband (number and %), 2004 and 2006
Regional Variations in the Marketplace
Distribution
Downloading
Hardware Purchasing
Equipment Rental
Software Rental
Second-Hand Distribution
How Robust is the Market?
LEGISLATION
Historical Background
Communications Act 2003 and Ofcom
BBC Review
Analogue Switch-off
Radio Regulation
KEY TRADE ASSOCIATIONS
Industry Groups
Broadcasting Entertainment Cinematograph and Theatre Union
Other Organisations

4. Competitor Analysis
The MarketpLace
Table 14: Selected Leading Companies in the UK Broadcasting Market by Activity, 2007
Commercial Broadcasters
Television Viewing
Table 15: Television Viewing by Channel (% of all hours viewed), 2002-2006
Figure 3: Television Viewing by Channel (% of all hours viewed), 2006
Radio Listening
Table 16: Radio Listening by Station (% of all hours listened), 2002-2006
Major Players
BBC (British Broadcasting Corporation)
Company Structure
Background
The Licence Fee
New BBC Charter 2007 to 2016
Current and Future Developments
Main BBC Services
Financial Results
British Sky Broadcasting Group PLC (`BSkyB')
Company Structure
Current and Future Developments
Financial Results
ITV PLC
Company Structure
Current and Future Developments
Financial Results
Virgin Media Inc
Company Structure
Current and Future Developments
Financial Results
GCap Media PLC
Company Structure
Current and Future Developments
Financial Results
Other Television Companies
Channel 4
Five
SMG PLC
UTV Group
DTV Services Ltd
Top Up TV
Tiscali TV
Other Radio Companies
Emap PLC
Chrysalis Group PLC
Others
OUTSIDE SUPPLIERS
MARKETING ACTIVITY
Main Media Advertising Expenditure
Table 17: Main Media Advertising Expenditure on Television Services (£000), Year Ending December 2006
Table 18: Main Media Advertising Expenditure on Radio Services by Station by Owner (£000), Year Ending December 2006
Other Marketing Activity

5. Strengths, Weaknesses, Opportunities and Threats
STRENGTHS
WEAKNESSES
OPPORTUNITIES
THREATS

6. Buying Behaviour
Ownership of TELEVISION PRODUCTS
Table 19: Number of Households with Televisions and Digital Equipment (million and %), 2003-2007
Table 20: Screen Diameter and Features of Main Television Sets (% households), 2003/2004, 2004/2005 and 2005/2006
OWNERSHIP OF RADIO PRODUCTS
Penetration of Digital MEdia
Table 21: Penetration of Television and Radio Equipment and Services (% of adults), 2005 and 2007
By Demographic Group
Table 22: Penetration of Television Reception Equipment by Sex, Age, Social Grade, Region and Tenure (% of adults), April 2007
Table 23: Penetration of Other Reception Equipment by Sex, Age, Social Grade, Region and Tenure (% of adults), April 2007

7. Current Issues
Introduction
Dispute Between BSkyB and Virgin Media
Office of Fair Trading and Ofcom Decisions on ITV Shareholdings
Freeview on Freesat Gets Go-Ahead
BBC Jam Suspended
DAB Radio on Mobile Phones
Ofcom's Digital Dividend Review
Video-on-Demand

8. The Global Market
CULTURAL FACTORS
MOVIE AND MUSIC MAJORS
COMPUTER AND INTERNET MAJORS
US AND JAPAN DEVELOPMENTS

9. Forecasts
INTRODUCTION
The Economy
Population
Table 24: Forecast UK Resident Population by Sex (000), Mid-Years 2007-2011
Gross Domestic Product
Table 25: Forecast UK Growth in Gross Domestic Product in Real Terms (%), 2007-2011
Inflation
Table 26: Forecast UK Rate of Inflation (%), 2007-2011
Unemployment
Table 27: Forecast Actual Number of Unemployed Persons in the UK (million), 2007-2011
FORECASTS 2007 to 2011
Expenditure on Home Viewing
Table 28: Forecast Consumer Expenditure on Home Viewing Equipment and Services in the UK (£m), 2007-2011
Expenditure on Home Listening
Table 29: Forecast Consumer Expenditure on Home Listening Equipment in the UK (£m), 2007-2011
Digital Uptake
Market Growth
Expenditure on Home Viewing
Figure 4: Forecast Consumer Expenditure on Home Viewing Equipment and Services in the UK (£m), 2002-2011
Expenditure on Home Listening
Figure 5: Forecast Consumer Expenditure on Home Listening Equipment in the UK (£m), 2002-2011
FUTURE TRENDS
Flexible Viewing and Listening
Fragmentation of Audiences
Shift to `Narrowcasting'
Cultural Lag

10. Company Profiles
British Sky Broadcasting Group Plc
Channel 5 Broadcasting Ltd
Emap Plc
Gcap Media Plc
ITV PLC
Smg Plc

11. Consumer Confidence
METHODOLOGY
KEY FINDINGS THIS QUARTER
THE WILLINGNESS TO BORROW
Confidence Improves
Table A: The Average Amount Consumers Are Willing to Borrow in Order to Purchase Expensive Items at Current and Constant November 2004 Prices (£ and £bn), February 2006-2007
Willingness to Borrow Slips Slightly
Table B: The Number of Adults Willing to Borrow in Order to Purchase Expensive Items (000 and %), February 2006-2007
SPENDING FROM SAVINGS
Slight Increase in Spending from Savings
Table C: The Average Amount Consumers Are Willing to Spend from Savings in Order to Purchase Expensive Items at Current and Constant November 2004 Prices (£ and £bn), February 2006-2007
Saving Grows in Relative Importance
Table D: The Average Amounts Adults Are Confident Spending to Purchase Expensive Items (£ and %), February 2006-2007

12. Further Sources
Associations
Publications
General Sources
Government Publications
Other Sources
Bisnode Sources