Falcon Media House : UK consumer communication trends benefit OTT services

15 August 2017

Ofcom, the communications regulator in the UK, recently released its annual report which gauges how the UK population is using communication services. The introduction to the report highlights the speed of change facing our industry and the race to satisfy consumer needs; 'Our data shows how the increasing take-up of faster fixed and mobile data services is extending people's choice over how, where and when they communicate with others, watch or listen to content services, seek information, shop, and participate in the digital world.'

Here we reflect on some of the report's most compelling insights and the implication for the OTT market:

Greater viewing freedom

More than half (54%) of adults surveyed said they liked the freedom of being able to watch when and where they wanted on their tablet or smartphone. Most notably 81% of 12-15 year olds and 83% 16-24 year olds expressed their preference for the greater autonomy offered by mobile devices. Unsurprisingly, younger age groups are also the most likely to use devices other than a TV to view content - Four in ten (41%) 16-24s use their tablets, compared to 19% of over-64s, and more than six in ten (64%) 16-24s use their smartphones, compared to 6% of over-64s.

Insight:As broadband connectivity improves, the capability and price of smartphones drives greater consumer adoption, and the younger consumers join the working population and earn higher disposable incomes, the growth in streaming services is anticipated to grow exponentially.

Three predominantly popular services - BBC iPlayer, YouTube, Netflix

BBC iPlayer was the most popular streaming service amongst the adult population - 63% saying that they use it to watch programmes either live or on playback. YouTube was the most watched service among teens (66%) followed by BBC iPlayer (54%). Of payment services excluding licence-fee funded iPlayer, Netflix was the most popular among both adults (31%) and teens (46%).

Insight: Original programming remains a key driver when it comes to attracting large audiences made up of diverse age profiles in the same way as traditional broadcast viewing. Additionally, these services offer a slick, reliable and intuitive user experience: essential for driving uptake and usage.

Mobile ad spend sustains exponential growth

Total mobile advertising expenditure grew by 44% (£1.2bn) to £3.9bn in 2016. Mobile search advertising spend grew by 45% in 2016 to £1.9bn, while mobile display advertising spend increased by 44% to £1.9bn. The increasingly dominant influence of smartphones compared to other communications devices is clear, total mobile advertising amounted to 38% of total internet advertising and mobile display advertising accounted for over half (51%) of all internet display advertising.

Insight:Mobile devices represent a huge opportunity to generate advertising revenue from established audiences consuming OTT services.