Executive Summary
The television industry in the UK is about to experience a period of significant change, with the imminent advent of digital broadcasting. Between 1993 and 1998, total subscription, sponsorship and advertising revenues for non-terrestrial television services increased from £471m to £1.72bn, an increase of 264.5%. Key Note estimates that in 1998, the value of the market will be around £2bn, excluding telecommunications revenue to the cable operators. This huge growth in revenues reflects the increasing consumer penetration of both satellite and cable television.
The increasing market penetration of multichannel television is a function of the marketing efforts of BSkyB and the continuing extension of the broadband cable networks. The dramatic growth in subscription television has created an increasing fragmentation of audiences. Broadcasters in the terrestrial and non-terrestrial sectors are under pressure to maintain audience share. The projected launch in 1998 of new digital services suggests that these pressures will intensify during the year.
All the major players, both within the commercial terrestrial sector and in the non-terrestrial and publicly funded sectors, have plans to introduce such services in 1998. The important question is: how successful will the commercial terrestrial digital services be? In the current climate, it is extremely difficult to answer that question with any real degree of certainty. Competition will be fierce and there is little doubt that such services will come, but not all of the major players may be ready to launch digital services this year.
The flight of quality programming, from the terrestrial free-to-air services to the predominantly subscription-based non-terrestrial sector that started with sport and films, will continue into the next 5 years, with drama, documentaries and news coverage. Many of the companies that in 1998 are exclusively funded by advertising will, by 2002, derive an increasingly large proportion of their revenues from the subscription and pay-per-view market. This will present a serious challenge to the market hegemony of BSkyB for the first time. Key Note estimates that by the year 2002, the total value of the non-terrestrial television market will be approximately £3.6bn.
Seventh Edition 1998
Edited by Louis Barfe
ISBN 1-85765-846-9
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