Table of Contents

Executive Summary

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TABLE OF CONTENTS

Executive Summary

Introduction

MARKET DEFINITION

REGULATION

RECENT DEVELOPMENTS

PENETRATION OF TV AND RADIO

Table 1.1: Participation in Selected Home-Based Leisure Activities in Great Britain by Social Class (hours per week), 1993/1994Î

The British Broadcasting Corporation (BBC)

MARKET STRUCTURE

CONSUMER PROFILE

MARKET SUPPLY

MARKET SIZE

RECENT DEVELOPMENTS AND CURRENT ISSUES

Table 2.1: BBC Television Audience Profile ( percent), 1993

Table 2.2: BBC Television Average Number of Viewers and Share of Total Audience (average viewers per day and percent), 1993

Table 2.3: BBC Radio Adult Audience Profiles - Weekly Reach ( percent), 4th Quarter 1994

Table 2.4: Proportion of Different Categories of Programmes in Peak Times ( percent), 1993/1994

Table 2.5: BBC1 and BBC2 Range of Peak-Time UK-Made Programmes, 1993/1994

Table 2.6: BBC Income Sources (£m and percent), 1993/1994Î

Table 2.7: Structure of Income From BBC Commercial Subsidiaries (£m and percent), 1993/1994

Table 2.8: BBC Operating Expenditure (£m and percent), 1993/1994Î

Table 2.9: BBC Radio Stations Audience Performance, 4th Quarter 1994

Table 2.10: Weekly Reach - BBC Versus Commercial Radio (000), 4th Quarter 1992-1994

Table 2.11: Market Shares - BBC Versus Commercial Radio ( percent of total listening by all adults), 4th Quarter 1992-1994

Terrestrial Commercial TV

MARKET STRUCTURE

CONSUMER PROFILE

MARKET SUPPLY

MARKET SIZE

RECENT DEVELOPMENTS AND CURRENT ISSUES

Table 3.1: ITC Licences Extent for Terrestrial Commercial TV (number in operation), 1994

Table 3.2: Independent Terrestrial Television Finance (£m and percent), Year to 31st December 1993

Table 3.3: Programme Hours Transmitted, Year Ended 31st December 1993

Table 3.4: Penetration of Television Sets and Accessories ( percent of TV households), 1993

Table 3.5: Profile of the Adult Television Audience - All Day (average number of viewers and percent), January to December 1993

Table 3.6: Breakdown of Total Audience - All Day ( percent and index), 1993

Table 3.7: Area Populations by Contractor (000 homes and percent of network), 1994

Table 3.8: Advertising Expenditure on TV at Current Prices - ITV and Channel 4 (£m and 1990=100), 1990-1994

Table 3.9: The Top 20 Advertisers Using Television (£m), 1994

Table 3.10: Share of Television Audience ( percent), 1993

Table 3.11: Commercial TV Audience by Channel ( percent of viewers), 1988-1993

Commercial Radio

MARKET STRUCTURE

CONSUMER PROFILE

MARKET SUPPLY

MARKET SIZE

RECENT DEVELOPMENTS AND CURRENT ISSUES

Table 4.1: Growth of Independent Radio Services (number), 1973-1995

Table 4.2: Structure of Commercial Radio Services (number of services), April 1995

Table 4.3: Independent Local Radio Regions (number of stations and percent), June 1994

Table 4.4: Programme Points Value

Table 4.5: Listed Radio Companies and Groups, 1993-1994

Table 4.6: Major Radio Sales Companies, 1994

Table 4.7: Commercial Radio Adult Audience Profiles - Weekly Reach ( percent), 4th Quarter 1994

Table 4.8: Commercial Radio, Monday to Sunday Weekly Reach, 4th Quarter 1994

Table 4.9: Commercial Radio, Children 4 to 14 Year-Old Weekly Reach, 4th Quarter 1994

Table 4.10: Advertising Expenditure on Commercial Radio (£m and index 1989=100), 1989-1994

Table 4.11: Share of Radio Listening ( percent of adults aged 15 and over), 1993 and 1994

Cable and Satellite TV

MARKET STRUCTURE

CONSUMER PROFILE

MARKET SUPPLY

MARKET SIZE

RECENT DEVELOPMENTS AND ISSUES

Table 5.1: Structure of Sky Multi-Channels Subscription Package, March 1994

Table 5.2: English Channels on Astra, March 1994

Table 5.3: Number of Cable Telephone Lines, January 1991 to January 1995

Table 5.4: Cable Operators, September 1994

Table 5.5: Leading UK Cable Regions, September 1994

Table 5.6: Satellite Audience Demographic Profile at Peak Viewing Periods ( percent), 1993

Table 5.7: The BSkyB Viewing Profile ( percent) 1994

Table 5.8: The Satellite and Total Television Viewing Audience by Time Periods (000 and percent), 1993

Table 5.9: BSkyB Broadcasting Channels, 1995

Table 5.10: TeleWest's UK Operations, January 1995

Table 5.11: NYNEX Cablecomm's UK Operations, January 1995

Table 5.12: Bell Cablemedia's UK Operations, January 1995

Table 5.13: SBC's UK Operations, January 1995

Table 5.14: CabelTel's UK Operations, January 1995

Table 5.15: Homes with Dish or Cable (million and 1990=100), 1990-1994

Table 5.16: Homes with DTH Dish Reception (million and 1990=100), 1990-1994

Table 5.17: Homes With Cable TV Reception (000 and 1990=100), 1990-1994

Table 5.18: UK Cable TV Homes Passed and Connected (number and percent), January 1989-1995

Independent Film and Television

MARKET STRUCTURE

CONSUMER PROFILE

MARKET SUPPLY

MARKET SIZE

RECENT DEVELOPMENT AND CURRENT ISSUES

Table 6.1: Categories of Membership of PACT (number of members and percent), as at 30th September 1994

Table 6.2: PACT Membership Trends (number and index 1991=100), 1991-1994

Table 6.3: Changes in PACT Membership Structure ( percent), 1991-1994

Table 6.4: UK Independent Production of Network Programmes by Channel (hours and percent), 1993

Table 6.5: UK Independent Production of Network Programmes by Genre (hours and percent), 1993

Table 6.6: Leading Independent Film and TV Production Companies (£000), 1993/1994

Table 6.7: UK Independent Production of Network Programmes by Value (£m and percent), 1993

Table 6.8: Proportion of BBC Television Hours of Output Made by Independents ( percent), 1990-1994

Table 6.9: Number and Value of UK Films (£m), 1981-1993

Table 6.10: UK Co-Productions (£m), 1993

Advertising

INTRODUCTION

LEADING ADVERTISERS

LEADING COMMERCIAL RADIO ADVERTISERS

CABLE/SATELLITE DISH

LEADING ADVERTISING AGENCIES

LEADING MEDIA SPECIALISTS

Table 7.1: The Top 30 Advertisers by Type of Media ( percent and £m), 1994

Table 7.2: The Top 20 Advertisers on Commercial Radio (£000 and percent), 1994

Table 7.3: The Top 30 Advertising Agencies, 1994

Table 7.4: Top 15 Media Specialists by Type of Billings (£m and percent), 1994

Consumer Research

INTRODUCTION

ATTITUDES TO TELEVISION VIEWING

ATTITUDES TO RADIO LISTENING

Table 8.1: General Attitudes to Television ( percent agreeing), March 1995

Table 8.2: Attitudes Towards Aspects of TV Programmes ( percent agreeing), March 1995

Table 8.3: Attitudes Towards TV Advertising ( percent agreeing), March 1995

Table 8.4: Attitudes to Cable and Satellite ( percent agreeing), March 1995

Table 8.5: General Attitudes to Radio ( percent agreeing), March 1995

Table 8.6: Preferred Types of Radio Listening ( percent agreeing), March 1995

Table 8.7: Attitudes to BBC Radio ( percent agreeing), March 1995

Table 8.8: Attitudes to Radio Presenters ( percent agreeing), March 1995

The Future

INTRODUCTION

BBC TELEVISION

TERRESTRIAL COMMERCIAL TV

CABLE/SATELLITE DISH

BBC RADIO

COMMERCIAL RADIO

INDEPENDENT FILM AND TV

ADVERTISING

Table 9.1: Forecast of BBC Television Audience Share ( percent), 1995-2000

Table 9.2: Forecast of Terrestrial Commercial TV Audience Share ( percent), 1995-2000

Table 9.3: Forecast of Commercial Terrestrial TV Advertising Expenditure (£m and 1995=100), 1995-2000

Table 9.4: Forecast of Cable/Satellite Dish Share of Total Commercial UK TV Audience ( percent), 1995-2000

Table 9.5: Forecast of DTH Satellite Dish Penetration (million homes and 1995=100), 1995-2000

Table 9.6: Forecast of Growth in Subscribers to Broadband Cable TV (million and 1995=100), 1995-2000

Table 9.7: Forecast of BBC Radio's Share of Total Radio Listening ( percent), 1995-2000

Table 9.8: Forecast of Commercial Radio's Share of Total Radio Listening ( percent), 1995-2000

Table 9.9: Forecast of Advertising Expenditure on Commercial Radio and percentage Share of Total Advertising Expenditure (£m and percent), 1995-2000

Further Sources

ASSOCIATIONS

PERIODICALS

DIRECTORIES

GENERAL SOURCES

ICC INFORMATION SOURCES

ICC INFORMATION GROUP LTD

GOVERNMENT PUBLICATIONS

OTHER SOURCES

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EXECUTIVE SUMMARY

This report on Broadcasting in the UK examines the influences which are shaping the future of TV and radio. It covers both BBC TV channels (BBC1 and BBC2) and BBC Radio including Radio 1, 2, 3, 4 and 5 Live and Local/Regional. Commercial broadcasting includes commercial terrestrial TV, i.e. ITV (Channel 3), Channel 4 as well as the proposed Channel 5 (scheduled for launch in 1997), and cable and direct-to-home (DTH) satellite dish TV. It also includes independent commercial radio which now has three national radio stations, i.e Classic FM, Virgin UK and Talk Radio UK (launched in February 1995), plus 173 local and regional stations.

Since the commercial sector (both terrestrial TV and radio) are heavily dependent upon advertising revenue, this report also reviews the activities of the major advertisers and their agencies. Another sector covered by this report is independent film and TV programme producers. A provision of the Government's Broadcasting Act 1990 is that both the BBC and ITV should acquire at least 25 percent of non-news related programmes from independent producers.

The Broadcasting Act 1990 has been a dominating influence upon the present structure of commercial TV and radio. It was instrumental in the setting up of the Independent Television Commission (ITC), which is responsible for the allocation and monitoring of regional and breakfast time licences for both terrestrial and cable/satellite channels, as well as The Radio Authority, which is responsible for the issue and control of all national and regional/local franchises. As a consequence of the Broadcasting Act 1990, the ITC presided over the famous franchise auction in which four new companies took over from four previous franchise holders in 1993. A key issue yet to be resolved is the question of ownership upon which the Act initially placed restrictions. In 1993, these were relaxed leading to the mergers of Carlton with Central, LWT with Granada and Anglia with Meridian. With the moratorium on foreign ownership of UK media companies ending after 1996, the commercial broadcasting industry wants the Government to relax the ownership rules even more in order to create large UK-owned companies which can resist the continental media giants.

The other big issue is the future of the BBC. Its Royal Charter is due for renewal in 1996. Prevailing opinion holds that the BBC will continue to exist. The question is in what form. In particular, will it continue as a public service broadcaster funded by licence fees which it collects from the public or will it compete with commercial TV, radio and indeed all other media for advertising revenue? The BBC itself wants to remain a public service broadcaster funded by licence fees, a view which the ITC also shares. The ITC points out that should any channel or station (e.g. Radio 1) take advertising, it should have to leave the BBC.

Over the last 2 years, both the ITV and BBC TV channels have been losing audience share. This is due to the growth in household penetration, first of all by BSkyB's DTH satellite dish channels and more recently by cable TV. This has created a multiplicity of channels available to a growing number of people. It is also leading to a growing fragmentation of the TV audience. The implications for advertisers and their agents is that they will have to become increasingly more sophisticated in their media strategies and much more precise in targeting their consumers.

The report also highlights the recent emergence of commercial radio as the fastest growing advertising medium. For years it was known as the 2 percent medium because of its constant 2 percent share of total advertising expenditure on main media. In 1994, its share nearly doubled. The principal reasons for this are: a dramatic decline in the BBC Radio audience, especially Radio 1 following replacement of its established presenters with nine new young presenters; the success of Classic FM and Virgin 1215 in attracting audience; the increase in the numbers of local stations; and the practice by sales houses of offering packages of local stations to advertisers. In short, commercial radio is able to offer even larger audiences to advertisers. It now has a portfolio of famous high budget names.

Cable TV, whilst still in its infancy, is also growing very rapidly. Its main attraction is being able to offer cheaper telephony to subscribers and it can also transmit not only cable channels, but also all the terrestrial channels as well as BSkyB channels. DTH satellite dish cannot pick up the cable channels.

Research specially commissioned by Key Note among a representative national sample of over 1,000 adults found that the majority of respondents (62 percent) like TV programmes to be educational and informative. However, nearly one in two of these adults believed that the quality of TV programmes has deteriorated in recent years.

Whilst both the BBC and the ITV now meet the condition in the Broadcasting Act 1990 of buying 25 percent of non-news related programmes from independents, this sector is still struggling. It is made up of hundreds of very small companies who mainly operate on turnover rather than profit. It has been difficult for them to assert their rights in dealing with such powerful clients.

Key Note forecasts that between 1995 and 2000:

. The BBC TV audience will continue to decline slowly.

. At the same time, ITV and Channel 4 audience shares will also decline slowly.

. The growth of cable/satellite dish is the main reason for loss of share by the BBC and ITV/Channel 4.

. Channel 5 will take no more than 2 percent of the total audience because its reach will be 66 percent of the population.

. BBC radio's audience will continue to decline and BBC1 will not recover its lost audience from commercial radio.

. By 2000, commercial radio's share of total advertising expenditure will reach 5 percent.

. Major advertisers and their agents will continue to use commercial terrestrial TV as the main medium. Its revenue will grow by some 59 percent to £3.5bn by 2000.

Text © 1995 Key Note

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Last updated by Duncan Nottage 5th March 1999