The number of UK subscriptions to television streaming services Netflix, Amazon and NOW TV has overtaken traditional pay television for the first time, according to data released by Ofcom.
In a new report, TV industry regulator Ofcom found that the total number of UK subscriptions to the three most popular online streaming services – Netflix, Amazon Prime and Sky’s NOW TV – reached 15.4 million in the first three months of this year.
This overtakes the number of total pay TV subscriptions to services like Sky and BT in the UK over the same period. That figure now stands at 15.1 million.
The amount of revenue generated from pay television has also fallen for the first time, after a period of sustained growth.
Ofcom’s Media Nations Report found UK’s pay TV providers saw a 2.7% decrease in total revenue last year to £6.4 billion. By contrast, revenues for the three main streaming services rose to £2.3 billion in 2017.
However, the new report comes the day after it was revealed that Netflix missed its subscriber targets for the second quarter of 2018, a result which saw shares in the US streaming service drop.
According to Ofcom, spending by the BBC, ITV, Channel 4 and Channel 5 on new UK-made television programmes also fell in the past year.
The four broadcasters’ £2.5 billion combined spending on original UK-made programmes in 2017 is the lowest it has been in 20 years according to the report, and nearly £1bn less than the 2004 peak of £3.4bn.
At the same time, people are spending less time watching television: average daily broadcast viewing via the TV set fell by nine minutes in 2017 – and is down 38 minutes since 2012.
The trend away from traditional TV is also reflected in the report’s analysis of viewing habits among younger viewers.
Among 16 to 34-year-olds, total daily viewing time in 2017 was 4 hours 48 minutes, of which less than half – two hours 11 minutes or 46% – was to broadcast content. By contrast, just under an hour per day was spent watching content on YouTube among this age group.
Ofcom claimed that the report highlighted the changes to the TV marketplace caused by the rise of streaming services and the changing habits and preferences of the audience.
Chief Executive Sharon White said, “Today’s research finds that what we watch and how we watch it are changing rapidly, which has profound implications for UK television.
“We have seen a decline in revenues for pay TV, a fall in spending on new programmes by our public service broadcasters, and the growth of global video streaming giants. These challenges cannot be underestimated.
“But UK broadcasters have a history of adapting to change. By making the best British programmes and working together to reach people who are turning away from TV, our broadcasters can compete in the digital age.”