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Netflix Extends Lead in U.K. Amid Boom in Subscription Streaming

Almost half of all U.K. homes now take one of the major subscription streaming services, with Netflix at the front of the pack, according to a new report by British media regulator Ofcom. The U.S. behemoth extended its lead in Britain by posting the largest subscriber gains in the first quarter of 2019, up 26% year-on-year to 11.5 million. Amazon Prime Video was up 23% but trailed with 6 million subscribers.

Overall, 47% of all British households, or 13.3 million homes, have signed up to one of the most popular subscription streamers: Netflix, Amazon and – some distance behind – Sky’s Now TV and Disney Life. In 2018, it was 39% of households, or 11.2 million homes, according to Ofcom’s latest Media Nations report.

Many homes use more than one service. The overall total of subscriptions rose from 15.6 million to 19.1 million during 2018. SVOD has already overtaken traditional pay-TV in the U.K.

In terms of British programming, Amazon and Netflix are investing heavily in local content but cannot expect to match the traditional broadcasters in volume. Ofcom found that the local pubcasters, including the BBC, produce 100 times as much homegrown fare as the U.S. streamers do in Britain.

ITV is taking the lead on “best of British” SVOD service BritBox, which is slated to launch later this year. The Ofcom report highlights a key reason why the commercial broadcaster wants in on the SVOD boom: Traditional viewing – meaning watching broadcast channels on a TV set, including catchup viewing, within 28 days –  continued to fall, and at a faster rate, in 2018. Although traditional viewing still accounts for 70% of all TV-watching, the daily amount of time fell by nine minutes in 2017 and 11 minutes in 2018, taking the total down to three hours and 12 minutes per day.

Crucially for the legacy players, the fall in traditional viewing is most pronounced in the sought-after 16-to-24 demographic, where it has dropped in half between 2010 and 2018. For the first time, young people in the U.K. now spend more than an hour on YouTube every day.

Unveiling its research under the banner “U.K. becomes a nation of streamers,” Ofcom said that the way Brits watch TV is changing faster than ever.

“In the space of seven years, streaming services have grown from nothing to reach nearly half of British homes,” said Yih-Choung Teh, Ofcom’s strategy and research group director. “But traditional broadcasters still have a vital role to play, producing the kind of brilliant U.K. programs that overseas tech giants struggle to match. We want to sustain that content for future generations, so we’re leading a nationwide debate on the future of public-service broadcasting.”

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