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Netflix, Amazon Generate Twice as Much Revenue in U.K. as Broadcasters’ Streamers

The combined revenues for Netflix and Amazon Prime in the U.K. amounted to more than double the total revenue generated by the streaming services of Britain’s five biggest broadcasters in 2018, a new report has found. Meanwhile, fellow digital giants Google and Facebook dominated the British online advertising landscape, accounting for nearly two thirds of total online advertising revenues in 2018.

The report on Britain’s VOD market, commissioned by media regulator Ofcom, shows how dominant Netflix and Amazon Prime have become in the U.K. Between them, they generated an estimated $1.38 billion (£1.09 billion) in 2018 – or more than twice the $669 million (£530 million) generated collectively by Sky’s NOW TV, the BBC’s iPlayer, ITV’s ITV Hub, Channel 4’s All 4 and Channel 5’s My5.

The lopsided figures come as Netflix is hiking the price for its standard and premium services in the U.K. On Thursday, the streaming giant announced that the monthly subscription rate for its standard service, which allows HD streaming to two devices, would increase by £1 ($1.26) – a 12.5% rise – from £7.99 to £8.99. Its premium service, which streams in Ultra HD on up to four devices, is increasing by £2 (or 20%) from £9.99 to £11.99. The hike was effectively immediately for new subscribers and will be applied to existing users in the coming weeks. The service’s basic rate, allowing standard definition streaming on one device, remains the same at £5.99 ($7.55).

The Ofcom report, prepared by Ampere Analysis, says that Netflix generated an estimated $875 million (£693 million) last year, which by itself was more than the five traditional broadcasters’ own streaming services combined. Amazon Prime generated estimated U.K. revenue of $505 million (£400 million), ahead of the leading traditional broadcaster, ITV, whose ITV Hub generated about $316 million. Sky’s NOW TV delivered about $215 million, while All 4 generated $101 million and My5 $38 million.

As a publicly funded body, the BBC does not generate revenue from its iPlayer. But the iPlayer is the most frequently used broadcaster streaming service in Britain, and it boasts the biggest reach of any VOD platform in the U.K., reaching 13.4 million British homes, beating out the 9.9 million subscribers to Netflix, 8.8 million homes for ITV Hub, 7.7 million subscribers to Amazon Prime, 6.8 million homes for All 4, the 4 million homes for My5, and 1.5 million subscribers to NOW TV.

To try to counter the rise of the U.S. online giants, the BBC and ITV announced in February that they would bring their North American joint streaming service, Britbox, to the U.K. The Ofcom report forecasts that, by 2023, Britbox as well as other new entrants Disney Plus and Apple TV Plus will reach at least 2 million subscribers in the U.K.

On Thursday, Ofcom also published its first annual Online Nation report, which looks at Internet usage in the U.K. The report suggests that “changes in the U.K. online advertising landscape are largely driven by the growth dynamics of two companies: Google and Facebook.” Between them, the pair account for nearly two thirds of the £13.44 billion ($17 billion) total online advertising revenues in the U.K. in 2018. Google accounted for the lion’s share with 39%, approximately £5.25 billion ($6.6 billion), with Facebook at 22% ($3.7 billion).

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