The global media landscape: in eight charts

First published by TheMediaBriefing.

Every year Ofcom, the UK communications regulator, publishes their International Communications Market Report. The report benchmarks the performance of UK communications sectors against different comparator countries.

The most recent study – published without much aplomb at the end of last year – covered 18 different countries, exploring the take-up, usage and motivation behind different communication technologies.

The 213-page report is full of data and insights. Here’s our tl;dr version, highlighting eight key findings.

1. The communications sector was worth £1,165bn in 2015

These revenues were up 2.3% year-on-year, with telecoms continuing to represent the lion’s share of this pot. Within that, the largest three communications markets – by revenue – were the US, China and Japan. This was followed by Germany and the UK.

The US was also the leading nation in terms of revenue per head, coming out at £1,073 per person. In contrast, the UK figure was £761 per head, some £312 lower than the US, but ahead of other large European economies such as France, Germany, Italy and Spain.

Image: Global communications revenues: 2011 – 2015

2. Global TV advertising is worth more than online. Just.

TV advertising was worth £106bn in 2015. This accounted for just over a third of the total advertising pie, which at £308bn in 2015, was up 5.6% year-on-year. Internet advertising was just behind, but perhaps not for long, worth £102bn.

However, whereas TV advertising revenue grew by 1.2% in the past 12 months, internet advertising was up 19.5%. Given this level of growth, it may well overtake TV advertising when 2016’s figures are known.

The overall growth in advertising revenue also masked a bleaker picture for newspapers and consumer magazines, both of which was revenue declines (5.7 per cent and 3.8 per cent) in 2015. In contrast, all other sectors saw a growth in their advertising income during that time.

Image: Global advertising expenditure, by medium: 2015

3. Subscriptions are driving TV revenues

Globally, the TV sector enjoyed receipts of £263bn in 2015. Subscription revenues accounted for more than half of this, at £137bn.

The US TV market – at £113bn – is easily the largest in the world, ahead of China (£24.8bn) and Germany (£23.3bn). In terms of revenues per head, the US again comes out on top, attracting £351 per capita (i.e. per head). Germany (£289) and the UK (£221) are the next most profitable markets by this index. In contrast, China attracts a much lower £18 per capita, some way behind other emerging markets like Brazil (£44), but more than Russia (£16) and India (£5).

Image: Global advertising expenditure, by medium: 2015

4. The growth of OTT Video on Demand services is a mixed bag

Like the wider TV industry, subscriptions to video on demand services like Netflix are also highest in the US, where just over two-thirds of television viewing homes have such a subscription. Sweden is the second largest market, in terms of reach, for OTT services.

The growth rates for these OTT products – coupled with the continued investment in original content and distribution of new and archive material – means that this sub-market remains one to watch in places where there is already substantial market share.

However, growth in many other markets, such as Korea, Spain, Italy and China is much smaller, to the point of being almost lukewarm. Efforts to produce more non-English language content, partnerships and other expansion efforts, may help to address this as OTT providers continue their global push for growth.

Image: Television households’ subscriptions to over-the-top VoD services: 2015

5. We still watch a lot of TV

“The average time spent watching broadcast TV,” the study notes, “across our 15 comparator countries, was 3 hours 41 minutes per person per day in 2015, compared to 3 hours 43 minutes in 2014.”

Viewing was highest in the States (274 mins a day) and lowest in Sweden (154 mins).

Live viewing continues to dominate, with time-shifted viewing only being sizeable in a few countries such as the US (29 mins a day), UK (28 mins) and Australia (13 mins). In several other countries, such as Japan, Germany, Italy, Russia and Korea, this method of viewing content barely registers, if at all.

Image: Average minutes of broadcast TV viewing per person per day: 2014 – 2015

6. China has the highest share of internet advertising

In most countries, the share of advertising being spent online continues to grow, although in a number of nations, such as the Netherlands and Japan, this growth is pretty anaemic. China, conversely, is witnessing hockey-stick growth. 

For the first time, more than half (53 per cent) of advertising spend in China is online. This – as a proportion of total advertising revenues – is up 10 per cent in the last year alone.

Spend is also up 7 per cent year-on-year in Russia. However, the online ad market there is still behind a number of others, with the UK and Sweden both ranked second in this global index, with both countries reporting that 48 per cent of total advertising spend was going to online source.

Image: Internet share of total advertising spend: 2009 – 2015 

7. The UK loves online shopping

The statistics in Ofcom’s report speak for themselves:

“In the UK six in ten internet users say they shop online at least once week, and four in ten mobile phone users say they use their device to browse shopping websites or apps at least once a week… Six in ten respondents in the UK say they have knowingly purchased something from another country in the past year… the nation’s per capita turnover for e-commerce, which stood at £1,760 per person in 2015 – the highest of all the comparator countries.”

This figures dwarfs the per capita B2C turnover in the next most popular markets, the USA (£1,207 per head), South Korea (£841) and France (£730).

Reasons for this difference, cited by the authors include: “a traditionally strong history of catalogue shopping, overall satisfaction with postal services and the high availability of debit and credit cards.”

Image: B2C e-commerce turnover, per head: 2014 – 2015

8. Online news continues to be an increasingly important source

Finally, from the content perspective, Ofcom’s report reaffirms the growing trend of audiences going online – and relying on the internet – for news.

Among online users in more than a third cite the internet as their main source of news in the UK, Germany, Italy, USA, Japan, Australia, Spain and Sweden. In many cases the different between the internet and TV, in this regard, was minimal, with online sources trumping TV in their primacy in the UK, Italy, Japan and Australia.

Drilling down into specific verticals, in both the UK and Italy the internet was more likely to be a source for sports news than TV (or indeed any other medium), although a significant audience also said that they were interested in this programming genre.

Meanwhile, local news was also more likely to be found online by consumers in the UK, Italy and Spain. In Germany and Sweden, interestingly, newspapers and magazines remained the leading source for local news, whilst elsewhere respondents were more likely to name TV as the leading platform for this source of news. How long this state of affairs will continue, of course, remains to be seen.

Image: Main sources of news about the world: 2016 

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