Deloitte Predicts UK Media Sector Trends for 2018

Posted on the 19 January 2018

Deloitte Predicts UK Media Sector Trends for 2018

⦁   Traditional TV viewing by 18-24 year-olds in the UK will decline by 10%-15% in 2018;
⦁   Live broadcast and events will continue to thrive in a digital world, generating £400bn globally, and £24bn in the UK in 2018);
⦁   The resurgence of paid media content: half of UK adults will have at least two online-only media subscriptions (mostly TV, music, news or video games) by the end of 2018 and four by the end of 2020;
⦁   Findings come from Deloitte UK’s TMT Predictions 2018 report, published today.

The technology, media and telecommunications (TMT) practice at Deloitte, the business advisory firm, has today announced its predictions for the UK media sector in 2018. The news comes following the launch of the seventeenth edition of TMT Predictions 2018.

Post-millennial TV viewing: the Great British Switch Off?
Deloitte predicts that traditional TV viewing by 18-24 year-olds in the UK will decline by 10%-15% in 2018 and 2019, but thereafter the rate of decline may lessen.

Matthew Hughes, partner and technology, media and telecommunications lead at Deloitte in the North East comments: “Many forces that distracted young people away from traditional TV, such as smartphones, social media and video piracy, have peaked. Digital distractions will remain, but their impact is unlikely to increase further.

“Nevertheless, broadcasters, distributors and advertisers have to react to changing consumer habits. To this end, measurement’s scope will need to expand to include reactions to viewing, as well as minutes viewed.”

Live content to thrive in an online world
Deloitte predicts that live broadcast and events will generate £400bn ($545bn) in direct revenue in 2018 globally, with 98.5% of revenue generated by traditional forms of media, entertainment and leisure. These include television, cinema, sport events and live music and theatre performances, with the remainder coming from two emerging sectors: eSports and live streaming.

In the UK, the live media sector will generate £24bn in revenues this year, two percentage points higher than 2017.

Globally, live TV and radio broadcasting is expected to generate 72% of all live revenues in 2018, with the largest component being broadcast TV, with £265bn ($358bn) from advertising and subscriptions.

Total live streaming revenue – whose model is based on digital tipping – is expected to be £5.5bn ($7.4bn) this year, with China the largest market. This would be a 47% increase from 2017.

The global market for live events – including live performances such as concerts and shows (£27bn/$36bn), exhibitions and conferences (£28bn/$38bn), sport events (£24bn/$33bn), and cinema (£29bn/$39bn) – are forecast to grow collectively by £3.7bn ($5bn), to £108bn ($146bn) in 2018.

Hughes added: “Audiences, empowered in the digital era, can now consume media content on demand, attend gigs, sporting events or even trade conferences remotely thanks to digital technology. Yet, while some commentators may have prematurely sounded the death knell for live attendances, the in-person consumption and monetisation of live events is thriving.

In many cases, many aspects of live content – including marketing, selling, ticketing and customer management – have been enhanced by digital, enabling live industries to generate more revenue and become more profitable.

“People enjoy being part of a conversation and sharing experiences – the social media era has created a ‘fear of missing out’ culture that has boosted the demand for attending those must see live events and performances.”

The subscription prescription
Deloitte also predicts that demand for paid-for online media content will continue to grow: by the end of 2018, half of adults in developed countries will have at least two online-only media subscriptions, doubling to four by 2020.

2018 will see 350 million digital-only subscribers globally, with around 580 million subscriptions to services that can include video on demand, music, gaming or news and magazines. In the UK, Deloitte estimates there are about 26 million media online-only subscriptions.

Hughes added: “The subscription model is not new but it is being successfully refreshed and invigorated for the digital consumer. Indeed, the growing adoption of digital-only subscriptions is a clear indication of consumers showing increasing willingness to pay for content online, rather than relying on ad-funded media only.

“The growing capability of online delivery – from robust hosting to faster broadband speeds – are making digital media ever more compelling than traditional alternatives. For music, the first wave of digital transformation was about making CD collections portable: with today’s technology, music fans can enjoy a pocket-sized jukebox of tens of millions of tracks wherever they have connectivity.”