Overall video entertainment spend in the UK is expected to reach £10 billion by 2018, averaging 2% annual growth between 2014 and 2018, according to research from Futuresource Consulting.
Total consumer spend on video in the UK grew by 4% in 2013 to exceed £9 billion, with a further 3% growth expected in 2014 – driven primarily by pay-TV and subscription video on-demand (SVOD) services.
In 2013, pay-TV homes reached 57% penetration in the UK. The report notes the continuing evolution of Sky, which is providing “increased consumer viewing choices in the wake of increasing competition from other pay-TV providers.”
The overall UK digital video market grew by 47% in 2013 to reach almost £450 million, driven largely by the continued momentum of online SVOD subscriber growth which will help the overall digital sector exceed £1 billion in 2017.
The report attributes the growth in SVOD to the success of Netflix, which continues to gain momentum and increase its profile.
“The UK video market has undergone significant change in the last two years, driven by increasing digital service choice, significantly improved infrastructure and connected device uptake,” said David Sidebottom, senior market analyst at Futuresource Consulting.
“As the evolving retailer and service provider offerings continually shape consumer behaviour, the UK is becoming one of the most dynamic digital video sectors globally.”
Commenting on the UK SVOD market, Sidebottom added: “Netflix has established itself as the leading player in the UK SVOD sector, primarily due to strong TV franchises and wide availability.
“But with the launch of Amazon Prime Instant Video, integrating Lovefilm and effectively replicating Amazon’s US video strategy, combined with the newer movie focus of Sky’s Now TV, the consumers choice of premium video viewing has never been greater, which in turn is driving industry revenues.”
