KN92074

KEY NOTE Market Review : LEISURE AND RECREATION : October 2004

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This report covers: leisure, and, recreation, market,home viewing, home listening ,digital radio, iPod, reading, newspapers, major uses of, leisure time, magazines, home computing and electronic games, DIY, and, gardening, eating out, drinking out, gambling, sport, exercise, cinema,

Companies covered include: BBC, Bertelsmann, Britsih Sky Broadcasting Group, Sky, Camelot, Capital Radio, Chrysalis, Clear Channel Communications, Compass, Emap, EMI, Fitness First, Focus Wickes, Hilton, Group, ITV, Kingfisher, McDonalds, Restaurants, Microsoft, Mitchells & Butlers, The News Corporation, Odeon, Cinemas, GWR,SMG, The Rank Group, Rank, The Really Useful Group, Sony, Time Warner, Viacom, UK, Virgin, Whitbread, Wyevale, Garden Centres, Main Media Advertising, DTV Services, NBC Universal, SMG, The Walt Disney Company, Universal Music, Group, Vivendi, Advance Publications, Daily Mail, and General Trust, Guardian Media, Hodder Headline, Independent News & Media, Johnston Press, The National Magazine Company, Newsquest, Northern & Shell, Pearson, Telegraph, Ltd, PLC, Trinity Mirror,

EXECUTIVE SUMMARY

Leisure activities could be said to be more important than ever before. International comparisons show that the British work unusually long hours, and commuting adds to the burden of the daily routine. There is also the increasing problem of sedentary occupations, which produce a demand for active leisure. At the same time, however, the temptation is greater than ever before to sit in front of a widescreen TV, with its superb picture and sound, or to spend hours on the Internet or playing video games.

This Review covers the majority of leisure pursuits but excludes all forms of tourism, either in the UK or abroad. Consumer expenditure on the defined activities totalled £87.3bn in 2003, giving the leisure market a 13.1% share of all consumer spending. Despite the impressions created by the media, this share has not been increasing steadily: it had already reached 13% in 1999.

The trends for each type of leisure activity differ greatly, and fashion often plays a part, producing a rollercoaster ride of booms and busts. For example, the gambling sector was given a huge boost by the launch of the National Lottery in 1994. By the late 1990s, consumers had started to lose interest, but deregulation in other forms of gambling (to allow them to compete with the Lottery) then produced a boom in spending in 2002 and 2003. Other fluctuating markets include cinema (which is dependent on `blockbuster' movie releases), West End theatre (relying heavily on foreign visitors to London), electronic games (stimulated every few years by a new console) and health clubs (where a 1990s boom in new clubs and subscriptions has inevitably been followed by slower market growth).

Given the wide range of leisure activities, it is not surprising to find that a long list of companies are involved in the market. These include media multinationals such as Time Warner, Rupert Murdoch's News Corporation and Bertelsmann of Germany, which exert a strong influence on the publishing, movie and music sectors. In contrast, some sectors are very much the province of UK specialists. Enterprise Inns, for example, now controls over 9,000 pubs, while the DIY retailer B&Q leads a concentrated sector that influences millions of householders.

To add to the complexity, many leisure and `cultural' markets depend on subsidies from the Government, advertising and sponsorship income, or the donations of charitable `angels'. The BBC, for example, still dominates the UK's broadcast media and is funded mainly by the television Licence Fee, a type of taxation. Grants from National Lottery earnings have contributed to the building of many new sports and arts facilities over the past 10 years.

Any weakening of the economy will be very bad news for the leisure market, because it will bring a period of `belt-tightening' by consumers as regards the more frivolous items of household expenditure. Suppliers could well be forced to restrain price increases to attract customers. Key Note forecasts that the market as a whole will grow by only 15% at current prices between 2004 and 2008, and the `rollercoaster' effect will continue to be noticed across the various leisure sectors.

TABLE OF CONTENTS

Text © 2004 Key Note

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Last updated by Amanda Porteous November 2004