Netflix and Amazon made £1.1bn in revenues from UK streaming customers in 2018, double the amounts the UK’s biggest broadcasters were able to make from their own streaming services. The figures have highlighted just how much the absence of a true British rival to the Silicon Valley giants is a missed opportunity.
Netflix is estimated to have made £693m in revenues from its 10 million UK subscribers last year, while rival Amazon notched up £400m from an estimated 7.7 million subscribers to its Prime Video service, according to research from media regulator Ofcom.
The streaming services of the UK’s main commercial broadcasters – ITV Hub, Channel 4’s All 4, Channel 5’s My5 and Sky’s Now TV – made about £530m last year.
The British services make money from a combination of advertising revenues and subscription income – such as for daily, weekly and monthly passes to Now TV and the 265,000 viewers paying £3.99 a month to get ITV Hub ad-free. The BBC’s iPlayer service, the biggest streaming service in the UK in an estimated 13.4m homes, does not take advertising or subscription revenue.
Sky’s Now TV is estimated to have 1.5 million paying subscribers, ITV Hub is used in 8.8m households, All4 is a feature in 6.8m homes and My5 is a staple in 4m premises.
The US streaming giants have invested heavily in building vast libraries of content and rapidly filled a viewing void left by the failure of the UK’s broadcasters to band together to launch a viable joint venture “best of British” service prior to the arrival of Netflix in 2012. Project Kangaroo, a video-on-demand service from the BBC, ITV and Channel 4 that was set for launch in 2007, was blocked by the competition regulator.
In the last four years Netflix has more than doubled its global content budget to more than $13bn (£10bn), with the bulk of that being spent on English-language content with direct appeal to UK TV fans.
The number of British TV series and films on Netflix has increased from 595 to 747 in the last two years, over the same period Amazon’s catalogue has jumped from 218 to 699 shows and films.
Carolyn McCall, the ITV chief executive, has said that UK broadcasters are now facing their last chance to develop a British-focused competitor that could rival Netflix.
ITV is launching BritBox, a joint venture with the BBC that has attracted over 500,000 paying subscribers in the US, in the UK later this year. The aim is to get Channel 4 and potentially Channel 5 also involved in the venture.
Overall, Netflix offers a staggering 32,600 hours of films and TV shows to UK viewers, with Amazon providing 22,600 hours of content. By comparison, Sky’s Now TV offers access to 12,600 hours of content and the BBC iPlayer, which currently is only allowed to keep shows on its service for 30 days, has 5,100 hours.
At the end of last year Netflix became the biggest pay-TV service in the UK, supplanting Sky, whose satellite TV service has dominated the market for almost three decades. Netflix has an estimated 10 million subscribers while Sky has about 9.6m traditional satellite TV households.
