Media consumption rises but consumers spending less

The six-monthly Barometer, based on a KPMG commissioned YouGov survey of online and offline media consumption of over 1000 UK consumers, found that average spend per UK consumer on traditional media fell from £9.19 in September 2009 to £7.46 in March 2010, with spend on digital media also falling (from £1.99 to £0.98).

However, the average monthly consumption of traditional media rose marginally from 11 hrs 40 minutes in September 09, to 12 hours 13 minutes. Hours spent consuming digital media increased even more, from 6 hours 14 minutes to 7 hours 28 minutes, said KPMG.

There was a noticeable increase in the use of video-on-demand (VOD) services for TV programmes, up from 19% of all respondents in September 2009 to 24% in March 2010. In January, Futuresource Consulting forecast that revenues from video-on-demand movies will reach €430 million in the leading five Western European countries by 2013.

This year’s explosion in 3D content has led to more than a quarter (27%) of respondents viewing a 3D film at the cinema during the past 12 months. However, despite fairly high levels of 3D viewing, relatively few indicated they were likely to buy a 3D TV next time they purchase a television set (15%).

The report had some interesting insights for those planning to implement paywalls around their online content, with an increasing number of respondents saying they paid nothing for accessing online news portals – up from 84% in September 2009 to 88% in March 2010.

And just 10% of non-subscribers anticipate possibly becoming paid subscribers to media products over the coming 12 months; people who said they would definitely or possibly become a paid subscriber were most commonly prepared to pay for music (55%) and film (45%). They were less prepared to pay for TV (30%) and online newspapers/magazines (31%)

The survey also found that those aged 16-24 are more likely to pay for online content than older consumers.

There has been a decrease in spend across several parts of the media industry, the survey found:

• 21% of newspaper readers paid nothing for these over the past month, compared with 15% six months ago. In London this almost doubled – 23% to 41% – which it says highlights the impact of the Evening Standard move to a ‘free’ model

• 19% of consumers saying they had paid nothing for print magazines over the past month compared with 12% six months ago

• Spend on video games was also significantly down, possibly reflecting the release of popular titles last summer such as the Batman game Arkham Asylum and others

With the iPad set to hit these shores at the end of May, digital book consumption could see a sharp rise. The report found that is has remained stable so far, with around 4% of respondents saying they have read one in the past month.

David Elms, Head of Media, KPMG UK, said: “The findings of the second KPMG Media and Entertainment Barometer illustrate the problem faced by the media sector in curbing the structural decline in revenues. However, online users are increasing. Online subscription models remain in their infancy and once more developed should provide a platform for significantly higher online revenues.

“There is considerable focus on driving digital media revenues. Respondents indicated they do access more media because of online availability, but the tide has not yet turned as the majority of us still prefer consuming media offline.

“Only a quarter favoured online media access compared with 43% who said offline and a third said it didn’t make a difference. Creating integrated business models which make the most of both traditional and digital business models is therefore key for the sector.”