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Published by: Mintel International Group Ltd.
Published: Oct. 1, 2007 - 115 Pages
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
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- 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
AbstractAfter a much prolonged consolidation in the cable TV sector, the battle for dominance in the world of satellite and cable TV has boiled down to a fight between two main players: BSkyB, which delivers programming via satellite and Virgin Media, the company comprising the former ntl and Telewest cable networks. In essence, it also symbolises a more personal battle between the top men at the parent companies of each operator - News Corporation’s Rupert Murdoch and Virgin Group’s Richard Branson. This battle has not been restricted to the home either, for the two companies have come up against each other in the courts following widely-publicised criticism and disagreements and this battle has yet to be concluded.
Both BSkyB and Virgin Media have now emerged as cross-media communications operators, rather than simply providers of multichannel TV, and this is likely to be the key battleground for the market going forward.
This report considers the hypothesis: “As the way people consume TV continues to develop and advance, the most successful operators in the satellite and cable TV market will be those who can offer a more comprehensive entertainment and communications solution, allowing consumers to customise services to suit them across a range of different media.
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