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New revenue streams shore up TV and radio

TV and Radio maintain revenues despite cuts in Ad Revenue

According to Ofcom data both commercial TV and Radio revenues have remained stable, having been shored up by income streams c/o diversified activities away from traditional Ad sources.

TV

Total Income for 2018 was maintained £11.3bn:  increases in TV subscription, sponsorship revenue and TV shopping helped to overturn a 4% drop in spot advertising revenue.

Channel 4 and ITV’s examples of this trend

  • Channel 4 has introduced a shoppable VOD format, to take advantage of new technology and new patterns in TV consumption.
  • ITV upped its brand partnerships a la ‘Love Island’.  

Both moves indicate how the TV contractors are fighting back and maintaining revenues.

TV’s changing demographic patterns

The average number of minutes viewed by people in the UK dropped by 11 mins in 2018 over the previous year to 3 hours 12 minutes a day, but the weekly reach of TV is still a healthy 88.5% of the population.

The steepest drop is amongst the young, with 16-24’s spending an average 1 hour 25mins watching TV.  This figure rises to 2 hours 18 mins among 25 to 34’s.

The reductions do not mean these groups are viewing less TV; they’re watching through other means – tablet, mobile, laptop etc.

Our focus is unchanged, and is to ensure we harness the new viewing platforms to reach our target and enhance our clients’ creative message and executions.

Radio

Revenue for Radio was also flat last year, at £572m. 

With the demise of the High Street it’s no wonder we’ve seen a slump in local advertising of 11%.  On a positive note this was offset by a 5% increase in national advertising, along with a 7% increase in sponsorship.  Prime examples are –

  • Bauer launching new radio stations with special partnerships like Disney.
  • Virgin Radio’s launch of the advertising spot free Chris Evans morning show, which is  completely reliant on sponsorship from SKY.

Audience overview

Overall reach for radio remains high at 89.4%, while listening has remained constant at 20 hours 54 mins per week.   As with TV this is significantly less against the younger audience and again they are finding other ways to listen.   New developments such as Smart Speakers, and smarter in-car interface tech is key in providing new opportunities to reach the younger age groups,  and again to enhance the creative message and executions.

TMS12 view

Clearly it is essential to keep ahead of all new developments to ensure the best are fully exploited for our clients’ advantage.  Ad revenue losses won’t necessarily have an impact on unit costs as prices are dependent on a true market of supply (audience) and demand (Ad expenditure). In the case of TV supply is down 6% while demand is only down 4% on the data for 2018.

John Alligan

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