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Comms in 2007

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Ofcom’s annual report, The Communications Market 2007, weighs in at over 300 pages, and provides a comprehensive overview of television, radio and internet services.

The full report, together with downloadable PDFs, is available on Ofcom’s website.

The key findings of the report point to a converged future, and serious difficulties for the broadcasting industry as both viewers and advertisers turn to the Internet.

• The availability of broadband to more than half of UK households has driven the development of converged services and devices.

• Convergence has opened up major revenue opportunities for the producers of many content types. Over the first half of 2007 90% of UK singles sales by volume came from digital downloads to the computer or a mobile handset. The market for computer game playing has also been transformed, with millions of consumers worldwide now engaging in shared online gaming experiences.

• Audiovisual content, by contrast, continues to be largely broadcaster-funded, although independent producer revenue from new media rights more than doubled to £42m in 2006.

• The traditional advertiser-funded model of broadcast audiovisual output faces pressures both from the growing popularity of online advertising (it rose by nearly half in 2006 to £2bn) and from the multichannels (which attracted advertising revenue of over £1bn in 2006).

• The terrestrial broadcasters have in turn embraced the internet as a new distribution platform with Channel 4, ITV and the BBC all launching internet-based on-demand and/or live access to their content.

• Increasingly sophisticated devices are beginning to influence consumer behaviour. Fifteen percent of individuals now have a digital video recorder (DVR) and up to 78% of adults who own them say they always, or almost always, fast-forward through the adverts when watching recorded programmes.

• Access to communications devices is widespread among children, with more than three quarters of 11 year olds claiming ownership of a TV set, a games console and a mobile phone.

• Bundled communications services are increasingly popular with consumers, with 40% of households now taking more than one communications service from the same provider (up a third on last year). A majority of broadband customers take it as part of a bundle.

• Each person now consumes more than seven hours of media and communications services cumulatively per day. However, the tendency to consume some media simultaneously means that the actual time spent on media is likely to be less than this.

• The alarm is the mobile handset feature which has the highest substitutional impact on stand-alone devices, followed by the camera. A significant minority of people also say their mobile is substituting for their stand-alone portable music player or games console.