Key Insights from the 2015 OfCom Communications Market Report

In case you missed it, Ofcom has released its 2015 Communications Market Report, which contains data and analysis on broadcast television and radio, fixed and mobile telephony, internet usage and print.

Here are 10 highlights of interest to people working in digital. The report is a hefty 435 pages and in case you’re wondering, no I’ve not read every page in detail!

1) Better web connectivity

83% of UK premises are able to receive a superfast broadband service. Almost one in three fixed broadband lines are now ‘superfast’ (providing speeds of 30Mbit/s or higher), compared to 0.2% in 2009. This is a 13% increase YOY.

Superfast broadband connections are also increasing in the domestic market.

2) 4G has better coverage & different user behaviour

There has been an increase in the availability and take-up of 4G services. In May 2015, 89.5% of premises had outdoor coverage from at least one 4G mobile network, an increase of 18% since the prior year.

During 2014, the total # UK 4G mobile subscriber increased from 2.7 million to 23.6m, taking the proportion of total mobile subscriptions to 28% at the end of vs. 3% at the end of 2013.

Changing behaviours – 4G users are more likely to:

• Go online more often, be more attached to their smartphones, do more ‘data-heavy’ activities online and do them more often
• Use mobile internet outside the home
• Use their smartphones to access audio-visual content
• Use their smartphone to make online purchases or use online banking, compared to a third of those without 4G access
• Access audio-visual content more often now that they have access to 4G.

3) Smartphones are more prevalent than desktops

The average amount of time spent online per user on smartphones exceeds that spent browsing on desktops and laptops. In March 2015 users spent an average of 58 hours 39 minutes browsing or using apps on smartphones, compared to an average of 31 hours 19 minutes on laptops and desktop computers.

In Q1 2015 smartphones were present in two-thirds of households (66%) vs. laptops (65%). For the first time, the smartphone has overtaken the laptop as the device internet users say is the most important for connecting to the internet.

Overall, smartphone users now spend nearly two hours (114 minutes) using the internet on their mobile phone, nearly twice as much time as the average adult spends going online via a PC or laptop (69 minutes).

Key smartphone activities:

• Watching short video clips (42%)
• Streaming television programmes or films (21%)
• Making purchases (45%)
• Online banking (44%)

4) Fewer people sending via the post

Almost a quarter of consumers (23%) in 2015 reported having sent no items of mail in the past month, a significant increase compared to 2014 (20%).

This is in stark contrast to the increase in volume of direct mail being sent by retailers, which has steadily increased since 2013 after being in freefall from 2007. For example, JC Penney in the US has recently reintroduced its catalogue having stopped print runs in 2010.

5) YOY declines in TV viewing

Since 2012, all age groups have had year-on- year declines in daily TV viewing, more pronounced amongst the under 45 age groups. BARB data suggests some of this decline is accounted for by a shift to catch-up TV and VoD via TV sets.

Also there has been an increase in # people viewing short form video via TV set e.g. YouTube via Netflix; 32% saying they watched either daily or at least weekly.

15% of respondents are using subscription on-demand services such as Netflix and Amazon Prime Instant Video more than they did last year.

6) A younger generation hooked on mobile

Half of smartphone users say they are ‘hooked’ on their mobile phone; 48% score themselves at 7 or above when asked to describe how hooked they are on their mobile phone on a scale of 1-10, rising to three-fifths (61%) of people aged 16-24.

29% adults say they check their phones within five minutes of waking up, increasing to about half of 18-24 year olds (48%). The first thing people are most likely to access is text messages (35% of adults, 38% of 18-24 year olds).

7) The next generation will be socially active across many sites

People aged 16-24 have a more extensive breadth of use of social media and are adopting newer sites and services.

However, the majority (97%) of all adults aged 16+ with a social media profile say they use Facebook, and 48% say they only have one on Facebook.

There is significant take-up of social networking sites and apps among 12-15 year olds. Key sites used:

• YouTube (81%)
• Facebook (72%)
• Instagram (55%)
• Snapchat (53%)
• WhatsApp (48%)

When asked which they used the most:

• Facebook (30%)
• YouTube (27%)
• Instagram (17%)
• Snapchat (13%)

Snapchat was cited by 19% of website users aged 12-15 as ‘their most recent addition’.

8) Greater awareness of internet security

The majority of internet users are using technical indicators such as padlocks and system messages to measure website safety. Use of these indicators has increased among all internet users from 43% in 2005 to 55% in 2014. The change has been driven by those aged 25 and over.

The majority of internet users say they would share personal information online, but there is evidence of added caution in doing this. 60% people say they would give out their home address online but have concerns about doing so, compared to 46% in 2005.

9) Online TV revenue is increasing quickly

Online TV revenue in the UK has increased rapidly in the past five years but still represents only a small proportion of total TV revenues. According to data from IHS, revenue from online TV grew by 38% in 2014 to £793m, with income from online TV subscriptions increasing by 53% to £317m, driven by the increasing popularity of services such as Netflix and Amazon Prime Instant Video.

10) Radio reach & advertising revenues are up

National advertising revenue for commercial stations has grown by 17% to £483m. The increase in commercial radio revenues has been driven by growth in national advertising revenue, from £207m to £243m. Commercial radio revenue per listener increased by 5.9% to £14.14 in 2014.

Community radio revenue has also increased year on year for the first time. Average income is up by 0.8%, and median income has grown by 6.9% since last year.

The reach of radio remains high but has fallen slightly. 89.5% UK adults listen to the radio each week, tuning in for 21.4 hours (an average of 183.4 minutes of listening per day, per listener). This is down by six minutes per week (average) year on year.