The company says the decline is driven in “almost equal part by a decrease in households taking out new subscriptions and an increase in those cancelling services.”

38% of those cancelling services cited “wanting to save money” as their main reason, up significantly from the same period last year, when only 24% cited cost-saving as their main reason. Despite this, the proportion of consumers citing cost-saving fell by two percentage points quarter-on-quarter.

Kantar also revealed that the largest drop in penetration is seen in the youngest households, with under 24s seeing SVOD penetration decline by 2.6 percentage points. For 55-64 year olds, SVOD market decline was only 0.5 percentage points quarter-on-quarter.

Dominic Sunnebo, Global Insight Director, Kantar, Worldpanel Division, said: “In Q2, we observed how British consumers continued to cancel subscriptions across the board. In terms of the TV streaming market, the decline in subscriptions is being driven largely by younger ages. Although, it is worth noting that this group often have a wider variety of entertainment sources, including BBC iPlayer and free services such as TikTok, suggesting that this age is still interested in viewing TV streaming, just for a lower cost.”

The research company surveyed 500 marketing decision makers or influencers in the UK, France, Germany, Italy and Spain in July this year, and found that UK respondents showed more caution about raising their overall marketing investments compared respondents in the other markets.  However AudienceXpress notes that most will not ‘go dark’ and 53% plan to at least maintain their current levels of spend or increase it.

The report also found the customer acquisition is now the top marketing priority for 43% of UK respondents. The second most important priority for UK advertisers is revenue growth (38%) while fore UK agencies it is customer retention (34%).

Among UK respondents, 45% believe that reach is the number one driver for marketing success, with advertisers ranking targeting as the second most important (26%) and agencies choosing media channel selection (32%) and tailoring creative (30%).

The survey found that the audience targeting methods Advanced TV offers is considered the top driver of spend (28%) followed by the ability to connect with viewers across screens (25%). The biggest barrier to investing more in Advanced TV for UK advertisers was a lack of awareness (45%), however UK agencies (at a rate of 30%) state that it is an unwillingness on the part of clients to experiment with Advanced TV, that is inhibiting spend.

Stefanie Briec, Director, Head of Demand Sales UK & International AudienceXpress at FreeWheel, said: “Optimism for AVOD and FASTs among UK marketers closely reflects the collective enthusiasm of the EU5 markets, with on average almost nine in ten survey respondents planning to increase their levels of spend in these channels.

“Continuing to meet marketers’ demand for advanced technological capabilities, such as data-driven and audience-based targeting, will drive additional growth. These findings also highlight the importance of raising awareness, as well as the need to quantify Advanced TV’s performance and prove the value of adopting these impactful channels.”

Kantar reports that the number of GB households with at least one SVOD subscription fell during Q1 2022, to reach 16.9 million (58% of GB households). This represents a -215K subscriber drop quarter-on-quarter. The overall household SVOD penetration for GB’s streaming market declined for only the second time ever, according to the company.

Kantar highlights that SVOD penetration for younger households in particular has been negatively impacted by the cost-of-living crisis, with the penetration rate for Generation Z households falling for the first time ever down to 74.6% in Q1 2022. This represents a decline of 1.2 percentage points from the previous quarter, and a fall of 0.8 percentage points from Q1 2020.

The number of SVOD cancellations is also increasing for GB households, with 1.51 million customers cancelling an SVOD subscription in Q1 2022, up from 1.04 million churners in the previous quarter (and 1.2 million in Q1 2021.) Kantar reports that more than 500,000 cancellations (approximately a third of total SVOD cancellations) were attributed to ‘money saving’ by those unsubscribing. In the previous quarter, only 28% attributed the decision to cancel to money saving.

Moreover, the proportion of GB streaming service users planning to cancel SVOD services has risen “to its highest ever level” reaching 38%, up from 29% in the previous quarter. Only 3% of GB households took up a new streaming service subscription during the quarter (the lowest ever rate, according to Kantar) compared with 4.2% doing so during the same period in 2021.

Kantar commented: “It’s now more critical than ever that SVOD providers demonstrate to consumers how their services are indispensable in the home in what has become a heavily competitive market. New marketing and content acquisition strategies will likely need to be deployed to support this and avoid further churn. “

According to a survey of 2500 UK households conducted by EY Data – a data and analytics company – 27% want to cut the number of streaming services they are currently subscribed to.

Praveen Shankar, UK and Ireland Managing Partner for Technology, Media and Telecoms, EY, said: “With UK economic growth under threat as inflation rises, concerns around price rises for digital services – from broadband to streaming platforms – are pushing consumers to cut back on the digital services they use.

“It’s essential now that service providers re-frame their strategies to build long-term value for UK consumers and offer compelling propositions that are flexible and reflective of the financial pressures people are facing.”

The audience measurement company also reports that, in Q1 2022, Disney+ and AppleTV+ saw the largest gains in terms of number of UK homes with access to their services. Disney+ experienced a 19% quarterly increase, rising from 5.49 million homes in Q4 2021 to 6.53 million in Q1 2022, while Apple TV+ enjoyed a 27% quarterly rise, from 1.24 million homes to 1.57 million.

With a smaller quarterly gain (3%), the number of households with access to Netflix rose from 16.79 million to 17.29 million. Amazon Prime Video and Now experienced quarterly increases of 6% and 4% respectively, with a penetration of 13.35 million homes for the former, and 2.13 million, the latter.

BARB says the Establishment Survey “enables [it to] understand the characteristics of UK households, part of ensuring that its daily reporting of television audiences is representative of the whole population.”

The streaming service is also set to rollout in several European markets. As part of a multi-year distribution agreement with Sky, Paramount+ will be available on Sky platforms in Italy, Germany, and Austria later this year. The streamer will also launch in Switzerland this year, and in India in 2023. Last week, Paramount+ launched in South Korea in partnership with Korean content platform, TVING.

The streamer launched with 8000 hours of content from across Paramount’s range of brands and studios, including SHOWTIME®, Comedy Central, MTV, Nickelodeon and Paramount Pictures. Subscribers will have access to Paramount+ Original titles such as HALO, 1883, Star Trek: Strange New Worlds, and The Offer. UK original dramas on the service include A Gentleman in Mosco, Flatshare,The Burning Girls and The Ex-Wife.

The streamer will also offer thousands of hours of kids and family content, with Paramount+ Original series such as Kamp Koral: SpongeBob’s Under Years and Fairly Odd Parents: Fairly Odder.

Tom Ryan, President & CEO of Streaming at Paramount, said: “This is a phenomenal year of growth for Paramount+. By the end of the year, we expect to be live in 45 countries with our unbeatable content offering, with a diversified set of major distribution partners.

“The UK and Ireland are key strategic markets in the global rollout of Paramount+ given the broad distribution of our brands across the free-to-air and Pay TV landscape. Our partnership with Sky gives us a strong foothold here and in several other markets where we plan to launch Paramount+ this year. Our differentiated strategy means we are poised to keep bringing the most compelling stories to audiences around the world.”

Maria Kyriacou, President, Australia, Canada, Israel and UK, commented: “Our partnership with Sky is a vital part of our launch strategy for Paramount+, giving us an engaged customer base hungry for more premium content. Meanwhile, we continue to reach new fans of Paramount output through a range of direct-to-consumer channels.”

According to Kantar, one-third (more than half a million) of cancellations were motivated by “money saving” as the main factor – this represents a jump from 28% in the previous quarter. 38% of planned cancellation for Q2 2022 are also being driven by “wanting to save money”.

Among GenZ viewers, the streaming service penetration rate fell for the first time ever from 75.8% in Q1 2021 to 74.6% in the first quarter of this year. Additionally, only 3% of households in Great Britain subscribed to a new streaming service in the first quarter of this year, falling from 4.2% a year ago.

Overall, 16.9 million UK households (58%) are subscribed to at least one SVOD service, down -21.5k quarter-one-quarter. The company says these figures “indicate inflation is top of consumers’ minds” and some households have chosen to “deprioritise entertainment”.

Kantar also reported that – in times of financial uncertainty – SVOD services Netflix and Amazon Prime Video were seen as the most indispensable in the UK, ranking as the last services subscribers would cancel when prioritising their spending. In contrast, Disney+, NOW, Discovery+ and Britbox all experienced significant rises in churn rates, quarter-on-quarter.

Kantar said: “With many streaming services having witnessed significant revenue growth during the height of Covid, this moment will be sobering. The evidence from these findings suggests that British households are now proactively looking for ways to save, and the SVoD market is already seeing the effects of this.

As a result, it’s now more critical than ever that SVoD providers demonstrate to consumers how their services are indispensable in the home in what has become a heavily competitive market. New marketing and content acquisition strategies will likely need to be deployed to support this and avoid further churn.”

TikTok’s global ad business already grew by 175% in 2021, according to Insider Intelligence, reaching $3.8B. The company has also forecast that TikTok’s ad revenues will achieve near parity with YouTube by 2024, soaring to $23.58B. The two major online video platforms will, at that point, control a 3.1 per cent share each of the global digital ad market.

According to Insider Intelligence, 51.2% of TikTok’s revenues will come from the U.S. this year, bringing in $6B (with 184.4% year-on-year growth.) The platform will command 2.4% of the U.S. digital ad market. In the UK, TikTok will earn $1.04B in ad revenues this year and control 2.9% of the UK digital ad market. Insider Intelligence predicts that by 2024, ad revenues from the U.S. and UK will reach $11B and $1.98B respectively.

Principal Analyst at Insider Intelligence Debra Aho Williamson, said: “[TikTok] has moved well beyond its roots as a lip-syncing and dancing app; it creates trends and fosters deep connections with creators that keep users engaged, video after video. Advertisers want to reach a passionate, dedicated audience, and TikTok can deliver that.

Another factor that will drive growth in ad spending is TikTok’s unique take on social commerce. It pairs marketers with creators to help content go viral, and that can drive enormous demand for products that advertisers want to promote.”

Other leagues Viaplay has secured exclusive UK broadcast rights to include: Champions Hockey League (2023/2024 to 2027/2028), EHF European Handball Championship, EHF Champions League and EHF European League (2022 to 2030), CEV EuroVolley, CEV Champions League, CEV EuroBeachVolley and additional CEV volleyball competitions (2022 to 2026), and World Athletics Continental Tour Gold (2023 to 2029).

The streaming service currently streams sports in 11 European markets and aims to have 12 million subscribers by the end of 2025. It has said it will reveal further details of its UK content offering, pricing and launch date in the near future.

Anders Jensen, NENT Group President and CEO, said: “We have high ambitions for Viaplay in every country where we have a broad offering. The UK, with this expanded scope, is no exception. Adding sports alongside our premium Nordic content will be a unique proposition for viewers, and our line-up will continue to grow and evolve.

“This will increase Viaplay’s appeal even further and help us rapidly establish a position in one of the world’s most competitive and exciting streaming markets. Our increased ambition for the UK is of course positive for our outlook but we are not changing our guidance at this time, and we remain fully funded for Viaplay’s expansion to at least 16 markets by the end of 2023.”

Peter Nørrelund, NENT Group Chief Sports Officer, said: “These long-term rights show Viaplay’s commitment to streaming sports in the UK. Each has a dedicated audience and will give us a foundation to expand further over time. In our current European markets, live sports are our home turf and we look forward to bringing our expert coverage to fans in the UK.”

With a focus on the UK ad trade, Enders Analysis’ conducted desk research as well as interviews with 25 senior industry experts from across different stakeholder groups. At the Future of TV Advertising Global event, London, Gill Hind (COO at Enders Analysis) and Bob Carley (Head of Media and Diversity & Inclusion Lead at ISBA) discussed the contents of the report, reflecting on the strengths and weaknesses of the current TV advertising ecosystem and what steps can be taken to improve the health of the industry.

Hind started by outlining several points of strength the report found in the UK’s TV advertising trade. Firstly, despite declining audiences, TV remains unparalleled in its ability to deliver the same message simultaneously to millions of viewers, reaching existing and potentially new customers on an enormous scale.

Secondly, Enders Analysis found that the pricing mechanism for buying TV ad space – where deals are struck against SAP – is generally viewed favourably by agencies and saleshouses, who consider it a dynamic way of establishing benchmark prices. Hind notes that the advent of broadcaster video-on-demand (BVOD) services and linear addressable has allowed broadcasters to bridge the worlds of TV and digital advertising by facilitating greater targeting and recovering some of the lost linear reach among younger audiences.

Enders Analysis also found that the TV advertising supply chain was seen as more transparent than for digital, which is overwhelmingly traded in the complex space of programmatic. In their supply chain study published in 2020, ISBA revealed that 15% of advertising spend on programmatic was unattributable, with only half of the investment making it to publishers.

One weakness in the UK’s TV advertising space outlined in the discussion was the uncertainty of future revenue streams for broadcasters. Hind said, “Currently, linear deals are based on share of budget and VOD [are based] on volume. Deals based on share of budget give little certainty of revenues [broadcasters] will take in any given year, just the relative share of an advertiser’s TV budget. Its very difficult to plan business without certainty of future of revenue streams”.

To redress this issue, Hind recommended that the deals across linear and VOD should both be made by volume: “We believe volume deals are more likely to lead to an improved TV advertising environment, rewarding advertisers that spend more or increase spend over a period of time, and providing broadcasters with greater certainty to invest in their programming and their ad product”.

Hind notes that advertisers have also felt the lack of a combined linear and VOD measurement solution throws doubt on the value of BVOD, as they cannot measure deduplicated reach and frequency, or get a clear sense of the efficacy of BVOD advertising compared to linear. Hind believes ad budgets could continue migrating to digital if the industry doesn’t coalesce around a suitable measurement and points to C-flight – the cross-platform campaign evaluation tool, spearheaded in the UK by Sky, ITV and Channel 4 – as a potential solution.

One aspect of the TV advertising industry Hind drew particular attention to was the strain placed on the relationship between brands and some agencies, due to a “misalignment of incentives”. She called for greater accountability and “transparent contractual terms in which media recommendations are totally impartial and based on the most effective outcome for the advertiser, not what’s more profitable for agencies”. She also stressed that advertisers must ensure agency remuneration packages make it sufficiently profitable to hold their accounts.

Last year the UK experienced a £1.8B decline in ad spend, dropping by 34.1% in Q2 2020 during the first national lockdown. However, if ad spend in the UK continues to grow along the lines predicted by AA/WARC, it will signal the strongest ad trade recovery of any major European market.

Current figures already suggest a strong recovery, with spending on advertising reaching £7.7B in Q2 2021 – an increase of 86.5% from the previous year. With AA/WARC forecasting this figure will rise to £7.9B in Q4 2021 – the all-important Christmas season – the UK could experience its highest ever ad spend increase during this quarter, with an incremental rise of £929m on last year. Updating prior predictions for 2022, this latest report forecasts a 7.7% ad spend increase year-on-year.

Breaking the data down by media, AA/WARC reveals that TV ad spend saw a year-on-year change of +85.9% for Q2 2021 and +31.5% for H1 2021, with a forecast +22.9% change for the whole year. They also forecast an additional 0.6% year-on-year change for the whole of 2022. Notably, a significant portion of the increased spend comes from VOD, with +112% year-on-year change from Q2 2021 and +42.3% for H1 2021. The VOD ad spend year-on-year change is forecast to reach +34.1% for the whole of 2021 and +8.6% for the whole of 2022.

The speed at which the UK’s ad trade is recovering is made even clearer when compared to global figures. The predicted percentage increase in UK ad spend for the whole of 2021 is double that of the equivalent global figure (12.6%) forecast in WARC’s Global Ad Trends report. Compared to the global rise in ad spend of 23.6% in Q2 2021, the 86.5% UK rise during the same time, is astonishing.

Despite growth being forecast globally, WARC notes that only three regions – North America, Europe, and Asia Pacific region –  are predicted to have larger ad markets than they did prior to the pandemic, by 2022. The year-on-year growth for ad spend globally is forecast to be 8.2% in 2022, bringing the total global advertising market to above $700B.

James McDonald, Head of Data Content, WARC commented: “The latest data demonstrates bullish trade in the UK’s advertising sector despite potential inflationary headwinds and supply chain disruption in the run up to Christmas. Strong fourth quarter projections for TV – a medium heavily leveraged by retailers during the golden quarter – and search, which encompasses activity on ecommerce platforms, suggest it will be largely business as usual for the industry this year.”