Despite the fact they are spending fewer hours watching TV, UK consumers are more prepared than ever to pay for media content, according to a survey by advisory firm KPMG.
Indeed the top line findings of KPMG's Media & Entertainment Barometer, assessing trends and sentiments towards new and traditional media, shows that UK media consumption in many areas, not just TV, plateaued or slightly decreased while money spent on such services rose across almost all categories of traditional and new media formats.
Even as the survey found that spending on digital books, online games, magazine and newspaper apps as well as traditional TV has increased most, UK consumers began to acknowledge that good online content comes at a price. In the survey, carried out in October 2012, only just over half of respondents (53%) said that one of the advantages of online content was that they could access it for free. By comparison, just three years earlier this figure was 80%. Furthermore, over of third (36%) of respondents said they preferred to access media online as it offers better 'value for money', compared with only 15% in 2009.
Despite these promising signals for online video and TV business, the survey also found that security concerns still deter almost a third of UK consumers (27%) from making payments online and a fifth of respondents (22%) said they still don't have a fast enough Internet connection to make online media an enjoyable experience.
Furthermore, putting the business elements firmly into perspective, KPMG revealed that at £2 per month, spend on new media was almost three times lower than on traditional media. Paid apps were proving to be increasingly popular and the highest increase in spend (up from less than £1 to just over £2 in 2012. Consumers were found to be spending most of their money on TV, almost £10 per month.
Commenting on the survey, David Elms, KPMG's head of media, said: ""The results clearly show that UK consumers are increasingly making more conscious decisions about what type of media they choose and how much time they spend on it. Contrary to popular perception, they are also increasingly prepared to spend money, especially for digital content.
"The results prove that media companies are already changing habits and persuading consumers that content is worth paying for. As a nation, we moved from licence-fee paid terrestrial TV to multiple channel choices on subscription-based satellite and cable television. The delivery mechanisms for effective digital consumption of media – technology, networks and spectrum – exist and are constantly upgrading, with 4G networks now rolling out nationally. It is up to the media companies to continue to respond with pricing strategies and content that consumers want to embrace."
Elms warned that the challenge for many media providers was that they have yet to establish a loyal digital customer base. "At the moment many media providers try to monetise content by appealing to the mass audience," he added. "The danger is that they effectively give away content for free and bring down their margins. They need to become more sophisticated by looking at and understanding both the content they have and the consumers who use it to develop a more targeted proposition and pricing model."