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1.5 The communications consumer

1.5.1 Introduction

Use of communications services in 2005 continued its recent upward trend. However, despite increased consumption, average spend on media and telecoms services declined as a percentage of household income for the first time in five years – an indication that the communications sector is delivering better value for the consumer. In this section we explore how consumption has changed in 2005 generally, and then focus on emerging trends in consumption among the young.

1.5.2 Spend declines despite increased usage

From 2001 to 2004, increased availability and choice, coupled in some cases with cheaper services, have contributed to a significant increase in consumption, reflected in a rise in communications spending as a proportion of total household spend – from 4.07% in 2001 to 4.63% in 2004. The biggest increase was attributable to mobile voice and text, followed by television services.

However, in 2005, average monthly household spend on communications services levelled out at £87.67, up 54 pence on 2004 in real terms. This was echoed by a fall, albeit a slight one, in communications spend as a proportion of total household expenditure, from 4.63% to 4.60% (Figure 1.25).

Figure 1.25 Average monthly household communications spend

£ per month, 2005 prices              Share of total household spend

Source: Ofcom / operators / licensees / BBC

A closer comparison of 2005 spend with 2004 shows that the reduction was driven by a fall in average spend per month on fixed-line services of £2.82, although this was largely offset by increased mobile, internet and television spend, leaving a net monthly increase of 54 pence per household (Figure 1.26).

Figure 1.26: Change in real household communications spend (2004 to 2005)

Change in average monthly communications spend (2004-2005)

Source: Ofcom / operators / licensees / BBC

Note: Based on constant 2005 prices. Apportionment of BBC licence fee to radio and TV based on Ofcom estimates.

1.5.3 Consumption – more broadband, more TV, less radio

Total time spent consuming and using communications services showed a modest increase over the four years to 2005 (Figure 1.27). Average television viewing went up by 11 minutes to 25 hours and 34 minutes per week, while radio listening experienced a decline of 24 minutes per week over the same period. Time spent by mobile subscribers making calls and sending SMS text messages both grew strongly but in absolute terms time spent online by internet users went up most, reflecting growing penetration and the increasing number of ‘always on’ broadband connections.

Figure 1.27: Weekly communications consumption

Usage per week	2001	2005	Change
TV viewing hours	25:23	25:34	+11 mins
Radio listening hours	20:30	20:06	-24 mins
Telephone call minutes
fixed	1:11	1:10	-1 min
mobile	0:20	0:22	+ 2 mins
Number of SMS texts	5.5	11	+ 5.4
Internet hours	2:10	2:29	+ 19 mins

Source: Ofcom / operators / RAJAR / BARB / TGI-BMRB

Note: TV and radio hours are per individual; call minutes and SMS text messages are per connection; weekly internet hours are for Q4 of each year for adults 15+ who have used the internet in the last 12 months.

Perhaps another driver of internet use is the growing popularity of social networking and ‘blogging’ websites. Sites such as MySpace, Friendsreunited and Bebo, used to establish and re-establish social contacts and communicate with communities, are among the top 50 most visited in the UK. Blogs (a type of website where users post entries in a chronological order, which can be publicly viewable or limited to particular users or user communities) are also generating great interest: there were over 35 million blogs worldwide in April 2006 and a new one is created every second, according to tracking service Technorati. In addition, the internet is increasingly used for downloading content to personal devices, including MP3 file sharing, movie downloads and audio and video clips.

1.5.4 Consumption patterns are changing for young adults

Our research and analysis suggests that young adults (16-24) have embraced new technologies to a far greater degree than the general population, while they use the more traditional media of television and radio considerably less ( Figure 1.28). Mobile phone (calls and texts) and internet use are well above average for this age group and our research suggests that 16-24 year olds regard the mobile phone as their primary telecoms platform (for example, 85% say they would use a mobile text or call as the preferred method of arranging to meet a friend, compared to 46% for all age groups).

Figure 1.28: Weekly communications consumption by age group

Usage per week	All age groups	16-24	Difference
TV viewing hours	25:34	18:21	-7h 13mins
Radio listening hours	20:06	18:18	-1h 48 mins
Mobile phone use
Number of mobile calls	20	27	+ 7 calls
Number of SMS	28	70	+42 SMS
Internet hours	2:29	2:50	+ 21 m

Source: Ofcom / operators/ RAJAR / BARB/ TGI-BMRB

Note: TV and radio hours are per viewer/listener; SMS is the self-reported number of messages sent per mobile user; weekly internet hours are for Q4 of each year for adults 15+ who have used the internet in the last 12 months.

At the same time, this age group has embraced online communication activities – our research shows that 70% of internet users aged 16-24 have used social networking websites (compared to 41% of the general population), with over half doing so on a weekly basis. They are also much more likely to contribute content: 37% of 18-24 year olds have posted material online (compared to 14% across all age groups), while close to one in five have their own website or blog (section 3.4.17 discusses this in greater detail).

The drop in listening and viewing hours of young adults is probably also partly explained by their higher ownership of most new technologies than the population as a whole. For example, over half own a games console and / or an MP3 player and they also appear to have a higher propensity to consume in an innovative manner; 38% of young adults view TV over their PCs, compared to only 24% of all individuals (Figure 1.29).

Figure 1.29: Use of entertainment devices in the home

Percentage of adults

Source: Ofcom research, April 2006

16-24 year olds watch substantially less television than older people and their viewing is declining at a faster rate, down by over one and a half hours, to 18 hours and 18 minutes per week, over the past four years (against a 1% rise for the adult population). In addition, their exposure to television is declining; just 84% watched at least an average of 15 consecutive minutes per week in June 2006, whereas the ‘all individuals’ figure was 92% (Figure 1.30).

Figure 1.30: Average weekly reach of television (2001 – 2005)

Source: BARB

Note: 15 minute consecutive reach

This fall may be due to a desire among young adults for a different type of content offering. This hypothesis is reflected in the growing share of their viewing to multichannel television – up from 30% in Dec 01 to 41% in Dec 05 (Figure 1.31).

Figure 1.31: Channel share by month for 16-24 age group (all homes, all day)

Source: Ofcom / BARB

Of course, lower viewing of the main terrestrial channels is mirrored among the general population as multichannel penetration increases. However, Figure 1.32 shows the disproportionately higher fall among 16-24 year olds for each of the last four years.

Figure 1.32: Change in percentage share of viewing to terrestrial channels

Source: BARB

In radio, too, there appears to be a shift towards newer services and different consumption patterns among young adults. Although total listening among this age group has risen by 5% over the past five years, this has been driven by a 118% increase in listening to the newer national commercial services (and a 12% rise in BBC radio listening), offsetting a 12% fall in local commercial services which have on average been around longer (Figure 1.33). In addition, a greater proportion of their listening time is spent listening to digital when compared to other age groups.

It is also interesting to note the 17% fall in listening among 25-34 year olds – again largely driven by less local listening to commercial radio (down 30%).

Figure 1.33: Change in radio listening between March 2001 and March 2006

Percentage change in annual hours listened

Source: RAJAR

Ofcom research suggests that among internet users the activity which has suffered most as a result of being online (either because less time is available or because the internet provides the required information) is TV viewing – with 18% saying they watch less (Figure 1.34).

However, again there is a markedly different pattern for young adults (15-24 year olds). For all categories of media, except television, more young adults reported a greater reduction in consumption than the population as a whole, suggesting the internet has a far greater substitution effect on other media for young adults. But the more established media of newspapers, magazines and radio were particularly affected, although interestingly games console use also fell significantly.

Figure 1.34: Reduced consumption resulting from increased internet use

Percentage of respondents

Source: Ofcom research, April 2006

Question: since using the internet for the first time, which if any of the following activities do you believe you undertake less?

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