A joint report issued by Post Office and Freeview(1) reveals that consumers are spending more and consuming more when it comes to their TV, home phone and broadband bundles, due to significant changes in the way home entertainment content is accessed.
Vision and Value 2014 – an examination of TV, broadband and home phone usage among consumers who choose to bundle the services – found that monthly spending on bundles has increased by £1 since 2013, costing each household an average of £50 per month(2). This equates to an overall national spend of £3.3billion(3).
The report has also found that almost one in five UK bundle users (19 per cent) is spending an additional £10 per month(4) on online TV subscriptions. Over half (55 per cent) are using services such as Netflix and LoveFilm in addition to, and not in place of, existing paid-for TV channel packages. Just 18 per cent use these services as a total replacement for a traditional TV package.
Supersizing continues in the broadband choices being made with two fifths of bundle users in the UK (39 per cent) now signed up to unlimited broadband download capacity, a four per cent increase on 2013 (35 per cent). However, only one in twenty of the overall households (6 per cent) would ever exceed 41GB per month and nearly two thirds (62 per cent) have no idea how much they actually use. Almost a third of respondents (29 per cent) do not know what capacity they are paying for.
Streaming TV shows and movies is the eighth most popular use for broadband in 2014; an activity which uses a relatively minimal download speed of 7Mbps for Super HD quality viewing(5). Similarly, browsing the internet, checking emails and social networking remain the most popular online activities in three quarters of households (77 per cent), requiring a base speed of just 5Mbps. Despite this, UK households are paying for an average speed of 32Mbps, which is over six times higher than they need.
There is some good news for consumers. The cost of TV ‘wastage’ – the amount spent on paid-for channels that are going unwatched – has decreased since last year. With the cost of TV entertainment within a bundle averaging at £22 per month in 2014, households are spending £184.80 per annum on unwatched TV channels – a reduction of £14.52(6) per household. However, this still equates to over £965million(7) wasted every year.
Hugh Stacey, Post Office HomePhone and Broadband, said: “The Vision and Value report has once again highlighted the importance of understanding the needs of your household when it comes to choosing the right TV, home phone and broadband package. Bigger isn’t necessarily better. Even though consumers are accessing greater levels of content online, most households require just a sixth of the capacity that they are paying for.”
Guy North, Marketing Communications Director at Freeview adds: “Although an increasing number of consumers are putting their hands in their pockets to pay for additional online streaming services, there is still a considerable amount of cash wasted on paid-for TV channels which go unwatched. People should regularly asses their viewing habits to ensure they are getting value for money from their TV service.”
Notes:
1. Research was conducted by Opinium between 10 January and 15 January 2014 amongst 3,063 UK adults (18+) who have a combined broadband, TV subscription package
2. Not including call costs
3. 21% (proportion of homes that have a triple pay bundle of fixed voice, broadband and multichannel TV, Ofcom Communications Market Report 2013 http://stakeholders.ofcom.org.uk/binaries/research/cmr/cmr13/2013_UK_CMR.pdf) of 26.4m (number of UK households, ONS Families and Households bulletin, 2013 http://www.ons.gov.uk/ons/rel/family-demography/families-and-households/2013/stb-families.html) = 5,544,000 households x £50 per month (average monthly spend for those that subscribe to home phone, broadband and TV excluding Sky Sports and Movies in 2014) = £277,200,000 x 12 months = £3,326,400,000 = £3.3billion
4. Figure based on LoveFilm Instant and LoveFilm by Post monthly cost at £9.99 (www.lovefilm.co.uk)
5. According to Netflix guidelines (https://support.netflix.com/en/node/306)
6. £199.32 in 2013. 5 hours of TV are watched per day, with 3.5 hours spent watching free-to-air channels, meaning 70 per cent of TV viewing is on free-to-air channels. 70 per cent of £22 (average monthly cost of TV part of bundle deal, excluding Sky Sports and Movies in 2014) = £15.40. Annual cost per household in 2014 = £15.40 x 12 months = £184.80. £199.32 – £184.80 = £14.52
7. 21% (proportion of homes that have a triple pay bundle of fixed voice, broadband and multichannel TV, Ofcom Communications Market Report 2013 http://stakeholders.ofcom.org.uk/binaries/research/cmr/cmr13/2013_UK_CMR.pdf) of 26.4m (number of UK households, ONS Families and Households bulletin, 2013 http://www.ons.gov.uk/ons/rel/family-demography/families-and-households/2013/stb-families.html) = 5,544,000 households x £14.52 wasted per month = 80,498,880 x 12 months = 965,986,560 = 965million