The UK streaming landscape is undergoing significant changes, as highlighted in Ofcom’s latest Media Nations report. This article delves into the deceleration of streamer revenue growth and the factors influencing these trends.
Significant Deceleration in Streamer Revenue Growth in the UK
According to Ofcom’s comprehensive Media Nations report, streamer growth in the UK experienced a significant deceleration last year, with Broadcaster VoD (BVoD) revenue surpassing the £1 billion ($1.34 billion) mark for the first time.
Market Maturation and Subscriber Trends
After two years of rapid 20% growth, major American platforms such as Netflix, Prime Video, and Disney+ saw UK revenue increase by just over 10% in 2024, reaching £4.37 billion. Ofcom attributes this slowdown to market maturation and a decrease in subscriber uptake, although the overall revenue continues to rise. Notably, 22% of subscribers cited cost as a primary reason for canceling their subscriptions, with many deeming Netflix “too expensive.”
Ad-Tier Strategies and Subscriber Engagement
In response to the plateauing subscriber base, streamers have intensified their focus on ad-supported tiers to maintain profitability. By Q1 2025, the percentage of UK subscribers using Netflix’s ad tier doubled to 28%, while Disney+ saw this figure more than triple to 23%.
Household Subscription Trends
The number of UK households subscribing to any streaming service has stabilized at around two-thirds (68%), a figure that has remained unchanged since the end of the pandemic. Netflix continues to lead the SVoD market with 59% of households, followed by Prime Video at 46% and Disney+ at 25%.
Growth in BVoD Revenue
In a competitive landscape, BVoD platforms are thriving, with revenue increasing by 15% to exceed £1 billion. Services like ITVX, Channel 4, and Channel 5 now account for a quarter of total broadcaster advertising revenues, with BBC iPlayer achieving a remarkable year, representing 22% of all BBC viewing.
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Digital Strategies and YouTube’s Impact
Ofcom noted that broadcasters are refining their digital strategies to transition linear TV viewers to streaming platforms and engage new audiences. YouTube has emerged as a significant player, now the second most-watched service in the UK, following the BBC and surpassing ITV. The viewing habits of younger adults are driving this trend, with viewership among those aged 55 and over nearly doubling last year.
Challenges in High-End TV Production
Elsewhere in the report, Ofcom revealed a nearly 20% drop in the production of high-end TV shows in the UK, totaling 181 last year. The BBC faces challenges with scripted co-productions as American companies retreat from collaborations. Domestic projects saw an even steeper decline of 26%, highlighting the multifaceted nature of these issues.
Despite a 12% decrease in third-party spending on drama, there was a notable 79% increase in funding for comedy, children’s programming, and films, reflecting changing funding partnerships. Overall, the BBC had a successful year, increasing its content budget by £111 million, while the combined spending of ITV, Channel 4, and Channel 5 fell by £57 million.
BBC content dominated the UK viewing landscape, with Gavin and Stacey and Wallace & Gromit: Vengeance Most Fowl leading the most-watched lists, the latter available on Netflix outside the UK.
