Uk Tv - Factors of an Economy’s Performance

Economic: These factors are determinants of an economy’s performance that directly impacts a company and have resonating long term effects. It can include: growth, interest rate, inflation and employment.

Due to the communication act of 2003, the UK TV industry become a free market for spectrum and reducing barriers to entry. UK’s Television industry was generally quite stable though it was affected by downturn global economic. In the recessions in 2001 and period 2007-2009, marketing budgets and advertising spend were hard hit. There is significant decrease in advertising revenue in television industry from £3,576m in 2007 to £3,136m in 2009 (exhibit E). There is a seen that advertising expenditure is sensitive to the economic trends and follows the general economic cycle. However, in generally, revenue from TV industry, in the period from 2004 to 2011, rise slightly from £10,030 m to £12,326 m (exhibit E). To get that results, commercial broadcasters had to find the way to control the cost, exploit programme assets and develop the low cost, popular format. Example: C4 cut 20% overhead cost and renew the main channel by continuing to invest in the programme budget in the period from 2001-2004. With a clear strategic direction and vision from broadcaster companies as well as understanding their own entities, companies could be safe and succeed in the unpredicted economy. For instance: in dot.com boom, due to limit resources, remain first and foremost a PSB, C4 cannot take experiments. Their paramount duty are preservation and reinforcement. C4 was cautious about dot.com opportunities. Therefore, no losses for them was happened when the bubble burst.

Besides that, revenue models play an important role in the success of companies. The methods “advertisement only” and “subscription plus advertisements” were chosen by many broadcasters due to their benefits while the “licence fee” and “one-off payment” are under threat.

In the UK television industry, there are 4 methods in transmission mechanism including: terrestrial, satellite, cable and broadband. With many good points such as velocity, convenient etc.., broadband slowly seem to be dominant the market.

SOCIAL:

Although increased competition from other media, TV viewing levels have remained relatively unchanged over the past few years at between 3.5 and 4 hours per person daily. However, there is several change in the time which spending by each age group. Ofcom (2014) statistic that older people spend more time than younger people watching TV. It challenged for broadcaster companies to find the way which attracted customers. Therefore, some programmes, for instance Event TV and innovative formats, which are designed to encourage live viewing and real-time view participation were developed due to ability to pull big audiences. New media and other leisure and entertainment activities share audiences across a greater number of delivery channels, competing for audience time and attention. For example: First CEO of C4, Grade, he understood that building C4’s audience was the key to maintain commercial stability. Therefore, processes to keep developing high quality, high profile and innovative television were set up to serve customers.