After years of recession-era realities hamstringing household budgets, spending on communications services has bounced back in the UK, rising for the first time in more than five years. The spending areas of choice? Broadband and pay TV. But a look at the numbers breakdown indicates a major cancer growing at the heart of the comms industry in that country.
First, the good news. The UK’s industry regulator Ofcom said that the average British household spent a total of £117.71 ($183.75) per month last year on broadband, phone, mobile, television, radio and postal services, the first jump since 2009.
Pay-TV adoption in particular significantly increased, thanks to competitive packages from BT and TalkTalk that undersell both satellite giant Sky and Virgin Media, the country’s lone cable offering. In fact, Ofcom said that hundreds of thousands of new households have become new subscribers in the past 12 months thanks to “skinny” packages in particular.
Ofcom also told the Telegraph that it expects pay-TV prices to increase, in large part to the record £5.1 billion (a little less than $8 billion) that broadcasters are paying for Premier League soccer rights. And that in turn will boost household spending on communications further.
In tandem with the rise in pay-TV spending,OTT video services from Netflix, Amazon and Sky’s Now TV have also taken off. Ofcom said Netflix now has 4.4 million UK subscribers, and that total online streamlining television subscriptions skyrocketed 53 percent to total £317 million ($494 million) in new spending.
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