DEVELOPMENTS IN THE UK TELEVISION MARKET

1
DEVELOPMENTS IN THE UK TELEVISION MARKET
September 2002
2
Contents

• Digital TV
• Programming and Audiences
• Business Economics
• Focus on ITV

3
Take-up of digital television compared with other
home technologies
Digital TVs strong initial growth is, in part, a
result of the move to switch existing subscribers
from analogue to digital packages - in 1998
analogue multichannel TV had achieved penetration
of some 25
Source ITC
4
Pay TV take-up by platform
Please note ITV Digital went into
Administration on 27 March 2002 and ceased
trading on 1 May, therefore we have only included
subscriber numbers up to 31 March 2002. As no
figures were publicly available for subscribers
as of this date, ITV Digital subscribers were
assumed to be equal to the latest figures
released (i.e. for Q4, 2001).
Source Company literature
5
Quarterly growth in digital pay-TV subscribers
Source Company literature
6
Range of available digital basic packages
(Satellite Cable)
Sky
10
Cost
13
16
More than 14 channels, mostly free to air
Channels included
4 themed packs (Popular mix, Knowledge,
Kids/music, Lifestyle pack), each offering some
25 channels
More than 70 channels
Telewest
15
Cost
18.50
21.50
25.50
More than 20 channels, mostly free to air
Channels included
More than 40 channels
Some 44 channels
More than 70 channels
NTL
20
Cost
23
26
More than 20 channels, mostly free to air
Channels included
4 themed packs (Variety News Documentary
Kids Music General Entertainment) each
offering more than 50 channels
More than 70 channels

• Please note prices for NTL and Telewest packages
  include phone line rentalinstallation charges
  are applicable for all three platforms

Source Company literature
7
Contents

• Digital TV
• Programming and Audiences
• Business Economics
• Focus on ITV

8
Issue of ITC licences
Source ITC estimates
9
Audience share in all homes by channel, 1999-2002
35

30
BBC1
25
ITV1
Other
20
15
BBC2
10
C4
C5
5
0
Source BARB
10
Audience share in multi-channel homes by channel,
1999-2002
45

Other
40
35
30
25
BBC1
20
ITV1
15
10
C4
BBC2
5
C5
0
Q2
Q3
Q4
Q1
Q2
Q3
Q4
Q1
Q2
Q3
Q4
Q1
Q2
1999
2000
2001
2002
Source BARB
11
Average weekly audience reach (3 minutes
consecutive) by channel, all homes, 2001-2002
100

90
BBC1
ITV1
80
BBC2
C4
70
60
C5
50
40
30
20
10
0
Q2
Q3
Q4
Q1
Q2
Q3
Q4
Q1
Q2
Q3
Q4
Q1
Q2
1999
2000
2001
2002
Source BARB
12
Viewer profiles by type of television received
Profile of viewers by type of service and age,
Q2 2002
Profile of viewers by type of service and social
class, Q2 2002
Source BARB
13
Hours viewed per household per day by social
class, 2001-2002
Source BARB
14
Hours viewed per household per day by age,
2001-2002
Source BARB
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Contents

• Digital TV
• Programming and Audiences
• Business Economics
• Focus on ITV

16
Sources of UK television revenue...
...and trend in share of main components,1995-200
1
60.0
50.0
NAR
40.0
30.0
Subscription
BBC licence fee spent on TV
20.0
Other
10.0
Sale of goods
Sponsorship
0.0
1995
1996
1997
1998
1999
2000
2001
Source ITC
17
UK TV Net Advertising Revenue by channel over
time...
Source ITC
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Tender payments by Channel 3, Channel 5 and
Additional Services licensees, 1993-2001
The Broadcasting Acts 1990 and 1996 require that
certain kinds of licence are awarded by the ITC
after a process of competitive tender. Licences
awarded in this way are required to make
additional payments to the Treasury (via the
ITC). Additional payments are in two parts. The
first is a percentage, set by the ITC, of
qualifying revenue (PQR). The second part is the
cash bid, which on renewal is set by the ITC.
This is index-linked and payable annually.
Note The drop in total tender payment in 1999
reflects the renewal of some Channel 3 licences.
The increase in PQR in this year reflects the
policy decision that more emphasis be given to
the PQR component of tender payments.
Source ITC
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Contents

• Digital TV
• Programming and Audiences
• Business Economics
• Focus on ITV

20
The ITV licensees
Grampian
Scottish
Tyne Tees
Ulster
Yorkshire
Border
Central
Granada
Anglia
HTV
Carlton/LWT
Westcountry
Meridian
Channel
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The ITV licensees - ownership structure
ITV
Scottish Media Group
Carlton Group
Granada Group
Anglia
Carlton
Grampian
Border
Central
Scottish
Granada
HTV
Ulster
LWT
Westcountry
Meridian
Channel
Tyne Tees
Yorkshire
22
Audience share by region, ITV1 compared with
BBC1, Q2 2002
Source BARB
23
Audience share for regional news programmes by
region, ITV1 compared with BBC1, Q2 2002
Source BARB
24
Original programmes (including repeats) as a
percentage of total output (hours) by channel
ITV, Channel 4 and Channel 5 all have
requirements in their licences to produce a set
amount of original programming each year.
ITC Licence Requirement for original programmes
and actual performance, 2001
Original programmes as a percentage of total
output, 1995-2001

Note Channel 4s original programming target was
only introduced as a licence requirement in
1998prior to this the figures were reported in
Channel 4s Annual Report.
Source ITC Channel 4 Annual Report
25
Qualifying hours commissioned from independent
producers as a percentage of total qualifying
output by channel
ITV, GMTV, Channel 4 and Channel 5 all have
requirements in their licences to commission a
set amount of programming from independent
producers each year.
ITC Licence Requirement for independently
produced programmes and actual performance, 2001
Qualifying independents as a percentage of total
qualifying output, 1995-2001
Source ITC