Satellite and Cable TV - UK - October 2007

Table of Contents

• Issues in the Market
• Main issues
• Definition
• Abbreviations
• Market in Brief
• Satellite and cable still leading but Freeview closing the gap
• Digital switchover presents opportunity
• Sky has the upper hand...
• ...but Virgin strong in bundling
• Key players at loggerheads, with competition authorities involved
• Operators invest heavily in promotion as battle intensifies
• Keys are costs, customers service and innovation
• Internal Market Environment
• Key points
• Cost and value
  • Figure 1: Multichannel TV connection and subscription charges, October 2007
• Bundling
• The digital switchover
• Competition from rival platforms
• Availability
• Programming
• Ofcom investigates pay TV market...
• ...while NCC waits in the wings
• Virgin cries foul...
• ...as concerns surface about BSkyB' s influence
• Broader Market Environment
• Key points
• Increased levels of affluence and spending
  • Figure 2: Trends in personal disposable income and consumer expenditure, 2002-12
• The age structure of the population
  • Figure 3: Trends in the UK population by age, 2002, 2007 and 2012
• ABC1 growth on the cards
  • Figure 4: Trends in the adult population by socio-economic group, 2002-12
• Changes in working patterns
• Competitive Context
• Key points
• Competing for the leisure pound
  • Figure 5: Consumer expenditure on selected leisure goods and activities, 2002-07
• An essential part of the mix?
  • Figure 6: Average weekly household expenditure, 2001/02-2005/06
• Freeview growth puts subscription services in the shade
  • Figure 7: Satellite and cable TV households within the multichannel TV market, 2003-07
• Strengths and Weaknesses in the Market
• Strengths
• The digital switch-off effect
• Bundling
• Programming
• Convergence
• Interactivity and customisation
• Weaknesses
• Cost
• Geographical coverage
• Reliance on third parties
• Consumer inertia
• Market Size and Forecast
• Key points
• Market performance
  • Figure 8: Trends in take-up of satellite and cable TV in the UK, 2002-12
• Growth slows as penetration increases
• Bundled services and digital switchover stimulate demand
• Convergence and bundling key to future growth
• Competition emerges, but has a long way to go
• Connections and content
• TV where you want, when you want it
• Steady growth over the forecast period
• Factors used in the forecast
• Segment Performance
• Key points
• Market overview
  • Figure 9: Satellite and cable TV households by segment, 2003-07
• Satellite TV
• Figure 10: Satellite TV households by segment, 2003-07
• Cable TV
  • Figure 11: Cable TV households by segment, 2003-07
• Companies and Products
• Key points
• British Sky Broadcasting Group plc
• Operating statistics
  • Figure 12: Key operating statistics for British Sky Broadcasting Group plc, 2006-07
  • Figure 13: British Sky Broadcasting Group plc, take-up of additional products, 2006-07
• Financial statistics
  • Figure 14: Key financial data for British Sky Broadcasting Group plc, 2006-07
  • Figure 15: British Sky Broadcasting Group plc, sales by business segment, 2006-07
  • Figure 16: British Sky Broadcasting Group plc, operating expenses by segment, 2006-07
• Company strategy
• Organic growth and acquisitions key to growth strategy
• Virgin Media Inc.
• Operating statistics
  • Figure 17: Key operating statistics for Virgin Media Inc., 2005-07
• Financial statistics
  • Figure 18: Key financial data for Virgin Media Inc., 2005-07
  • Figure 19: Virgin Media Inc., sales by business segment, second quarter 2007
• Company strategy
• Investing in content
• Coverage issues
• Merger brings benefits
• Other cable operators
• Other satellite operators
• Freesat
• Competitors to satellite and cable operators
• Freeview
• Top Up TV
• Tiscali TV
• Increasing availability
• A competitive triple-play offering
• BT Vision
• Brand Communication and Promotion
• Key points
• Sky the main player in main media
  • Figure 20: Main advertising expenditure on satellite and cable TV services, 2003-07
• BSkyB
• Virgin Media
• The Sky Consumer
• Key points
• Sky+ versus non-Sky+ customers
  • Figure 21: Sky customers, by demographic sub-group, February/March 2007
• Sky+ gains widespread acceptance
• Striking a chord with women
• Under-35s hit record
• Customers' experiences of Sky products and services
  • Figure 22: Sky customers' experiences of using interactive products and services, February/March 2007
• Premium services well received
• Interactive services Sky customers have used and loved
  • Figure 23: Most popular interactive TV services that Sky customers have used and loved, by demographic sub-group, February/March 2007
  • Figure 24: Next most popular interactive TV services that Sky customers have used and loved, by demographic sub-group, February/March 2007
• Busy people use interactive to catch up
• Film and sport has youth appeal
• Interactive services Sky customers like the idea of
  • Figure 25: Most popular interactive TV services that Sky customers like the idea of, by demographic sub-group, February/March 2007
  • Figure 26: Next most popular interactive TV services that Sky customers like the idea of, by demographic sub-group, February/March 2007
• Men aspire to Sky+
• Under-35s show the most potential as targets
• Interactive services Sky customers have never used/heard of
  • Figure 27: Interactive TV services that Sky customers are most likely to have never used/never heard of, by demographic sub-group, February/March 2007
  • Figure 28: Other interactive TV services that Sky customers have never used/never heard of, by demographic sub-group, February/March 2007
• Older generation still in the dark
• The Virgin Media Consumer
• Key points
• Who subscribes?
  • Figure 29: Virgin Media customers, by demographic sub-group, February/March 2007
• Regional availability apparent
• A value-for-money appeal
• Customers' experiences of Virgin products and services
  • Figure 30: Virgin Media customers' experience of interactive TV services, February/March 2007
• VoD/PPV content top for Virgin customers
• PVR appeal evident
• Interactive services Virgin customers have used and loved
  • Figure 31: Selected interactive TV services that Virgin Media customers have used and loved, February/March 2007
• Interactive services Virgin customers like the idea of
  • Figure 32: Most popular interactive TV services that Virgin Media customers like the idea of, February/March 2007
  • Figure 33: Next most popular interactive TV services that Virgin Media customers like the idea of, February/March 2007
• Interactive services Virgin customers have never used/heard of
  • Figure 34: Interactive TV services that Virgin Media customers are most likely to have never used/never heard of, by demographic sub-group, February/March 2007
  • Figure 35: Other interactive TV services that Virgin Media customers have never used/never heard of, by demographic sub-group, February/March 2007
• Older consumers the least aware of interactivity
• The Freeview Consumer
• Key points
• Solus versus all Freeview users
  • Figure 36: Freeview customers, by demographic sub-group, February/March 2007
• Cost-effective solution or second sets?
• Customers' experiences of Freeview products and services
  • Figure 37: Freeview customers' experience of Interactive TV services, February/March 2007
• Lower usage reflects limited interactivity
• Low PVR usage but strong interest suggests future potential
• The Freeview Consumer -- Detailed Demographics
  • Figure 38: Selected interactive TV services that Freeview customers have used and loved, February/March 2007
  • Figure 39: Most popular interactive TV services that Freeview customers like the idea of, February/March 2007
  • Figure 40: Next most popular interactive TV services that Freeview customers like the idea of, February/March 2007
  • Figure 41: Interactive TV services that Freeview customers are most likely to have never used/never heard of, February/March 2007
  • Figure 42: Other interactive TV services that Freeview customers have never used/never heard of, February/March 2007
• Consumer Attitudes Towards Satellite and Cable TV
• Key points
• Subscribers' attitudes to satellite and cable TV
  • Figure 43: Attitudes towards satellite and cable TV, by digital satellite/cable TV subscribers, February/March 2007
• Sky scores on multi-product take-up
• Virgin' s strength is in bundling
• Sky steals a march with Multi-room and HD
• Sky and sports -- a strong association
• Freeview users' attitudes to satellite and cable TV
  • Figure 44: Selected attitudes towards satellite and cable TV, by Freeview only viewers, February/March 2007
• Terrestrial-only viewers' attitudes to satellite and cable TV
  • Figure 45: Selected attitudes towards satellite and cable TV, by terrestrial-only viewers, February/March 2007
• Attitudes to satellite and cable TV -- demographic analysis
  • Figure 46: Most popular attitudes towards satellite and cable TV, by demographic sub-group, February/March 2007
  • Figure 47: Next most popular attitudes towards satellite and cable TV, by demographic sub-group, February/March 2007
• Younger, ABC1 men the most enthusiastic across the board
• Family togetherness?
• Convergence on the cards