Tracker/UK...of the digital revolution on UK media consumption patterns. In fact, recent years have...

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Media Tracker/UK MediaTracker Measuring growth and anticipating change within the UK media sector Compiled for KPMG by Markit January 2015 flip page

Transcript of Tracker/UK...of the digital revolution on UK media consumption patterns. In fact, recent years have...

Page 1: Tracker/UK...of the digital revolution on UK media consumption patterns. In fact, recent years have seen the pace of technological change accelerate and spread like never before. Unlike

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/UKMediaTracker

Measuring growth and anticipating change within the UK media sector

Compiled for KPMG by Markit

January 2015

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CONTENTS

© 2015 KPMG LLP, a UK limited liability partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.

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Page 3: Tracker/UK...of the digital revolution on UK media consumption patterns. In fact, recent years have seen the pace of technological change accelerate and spread like never before. Unlike

© 2015 KPMG LLP, a UK limited liability partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.

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SECTOR INSIGHT

This is a new biannual report compiled for KPMG by Markit, featuring unique survey data from UK media companies, marketing executives

and consumers. We have also developed a headline UK media sector tracker, derived from established business surveys, which allows us to

benchmark media performance trends over the past 15 years.

WHAT LIES AHEAD FOR THE MEDIA CONSUMER?

There can be little doubt that the UK media sector has experienced an unprecedented period of technological change over the years since the global financial crisis began in 2007/08.

Rapid mainstream adoption of new technologies has precipitated a series of seismic shifts in media consumption patterns, forever altering consumer expectations and engagement levels.

Perhaps inevitably, the scale and speed of this change has provided not only new revenue streams and enticing growth opportunities, but also great challenges as business models seek to evolve.

With this in mind, our first section takes the technology pulse of 1,500 households across the UK. As such, these survey results are designed to illustrate key emerging trends in media consumption, as well as likely patterns of change on the horizon.

UK MEDIA SECTOR TRACKER

The second section presents our headline UK media sector tracker, which aims to provide fresh media sector insight, from the perspective of UK marketing executives and private sector media companies.

We assess the landscape in relation to business activity trends at UK media companies by using new data derived from Markit’s widely-watched UK Services PMI® survey.

We have also sought to leverage information related to UK marketing executives’ main media and internet budget revisions, with the underlying data source the IPA Bellwether survey by the Institute of Practitioners in Advertising.

A specially developed composite index, our headline UK media sector tracker provides a unique and timely barometer of prevailing conditions across the wider UK media sector.

Given the lack of reliable business cycle information currently available, and the importance of media sector health to the wider UK creative industries, we hope that our tracker can plug a vital information gap for industry participants and policymakers.

MEDIA SECTOR JOB MARKET TRENDS

In the third section, we examine labour market trends within the media sector.

Trends in job security, income from employment, workplace activity and household finances are benchmarked against those reported across the UK as a whole through the past six years.

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© 2015 KPMG LLP, a UK limited liability partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.

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EXECUTIVE SUMMARYMedia sector business conditions improve in Q4, but recovery struggles for lift off.

UK Media Sector Tracker, 50 = no change

UK MEDIA SECTOR TRACKER: KEY POINTS

• Business conditions continue to rebound across the UK media sector in Q4 2014.

• Current trends remain favourable in comparison to the weak recovery seen during the immediate aftermath of the global financial crisis.

• UK media sector business conditions have now improved for over one-and-a-half years, which is the longest sustained period since 2005-2008.

• A sustained upturn in 2014 delivered the strongest calendar year of growth since 2007, but recovery speed peaked in Q1 2014 and struggled for lift off in second half of the year.

• Positive revisions to marketing budgets were a key tailwind to overall growth in 2014.

• In Q4, almost twice as many UK marketing executives (21%) noted a rise in their media adspend budgets as those that saw a fall* (12%).

• Q4 data also showed a sustained upturn in total business activity at UK media companies.

• Despite stronger growth trends, media sector job security continues to underperform UK-wide benchmarks, and income trends mirror the subdued pay patterns seen elsewhere.

*see methodology notes for full details.

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Media sector landscape

Media consum

ption Executive sum

mary

Sector insight

© 2015 KPMG LLP, a UK limited liability partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.

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UK MEDIA CONSUMPTION SURVEY: KEY POINTS

SEISMIC SHIFT

in media consumption

patterns across the UK

ACCESS TO MULTIPLE DEVICES

IS NOW COMMONPLACE

across all UK households and

not simply confined to the young, or highest income

groups

RAPID TECHNOLOGICAL

TAKE-UP

has also spread viewing of

‘catch-up TV’ to multiple devices,

but divergent preferences and

habits persist between younger and older viewers

TABLETSARE THE CLEAR

WINNER

in terms of expected uptake over the next six

months, and rising numbers of people are likely to access ‘catch-up TV’ and online news from

these devices

FUTURE CONSUMPTION OF ONLINE NEWSis a trend among the youngest age

groups and highest income groups, continuing the shift away from

reading print media

UK MEDIA CONSUMPTION SURVEY: KEY POINTS

• New survey data highlights seismic shift in media consumption patterns across the UK.

• Access to multiple devices is now commonplace across all UK households and not simply confined to the young, or highest income groups.

• Rapid technological take-up has also spread viewing of ‘catch-up TV’ to multiple devices, but divergent preferences and habits persist between younger and older viewers.

• Tablets are the clear winner in terms of expected uptake over the next six months, and rising numbers of people are likely to access ‘catch-up TV’ and online news from these devices.

• The youngest age groups and highest income groups are strongly positive towards future consumption of online news, continuing the existing shift away from reading print media.

Methodology notes

Job market trends

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© 2015 KPMG LLP, a UK limited liability partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.

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MEDIA CONSUMPTIONMedia consumption: UK households experience rapid change in consumption patterns

This section examines consumer technology access and usage, drawing

upon survey data collected from UK households. The results are designed to give a snapshot of current and future

media consumption patterns.

KEY POINTS FOR 2014

It is difficult to overstate the impact of the digital revolution on UK media consumption patterns. In fact, recent years have seen the pace of technological change accelerate and spread like never before. Unlike the steady consumer adoption rates witnessed during much of the 20th century, new devices such as smartphones and tablets have burst onto the scene in the blink of an eye.

Advances in consumer technology have ushered in widespread access to media content on multiple devices, most notably in the mobile arena. Alongside this, recent years have provided fertile ground for innovative media companies, with the emergence of new media platforms and distributors, a proliferation of ‘catch-up TV’ services, as well as unprecedented engagement and media consumption through social channels.

With this in mind, the analysis that follows looks at current media consumption patterns among UK households. Moreover, with consumer habits rapidly changing across all household demographics, we attempt to provide insight into key trends likely to emerge on the horizon.

VAST MAJORITY OF UK HOUSEHOLDS HAVE ACCESS TO MULTIPLE DEVICES

More than nine out of ten survey respondents* report access to a television, and a similar proportion indicated access to a desktop/laptop computer. Smartphone access is almost as high (82% of all respondents), while access to tablets stands at around six out of ten. As such, these results illustrate that the majority of UK households have access to a plurality of media devices.

The main demographic outliers are television trends among 18-24 year olds (only 79% reported access), while tablets are especially common among 35-44 year olds (just over 70%), and smartphone access lags among the oldest age category (55-64).

Perhaps unsurprisingly, there are digital access fault lines across income groups, especially in terms of tablets (the prevalence of tablet access within the highest income group is almost twice that of the lowest income group).

ALL AGE GROUPS EMBRACE CATCH-UP TV, BUT DEVICE PREFERENCES VARY

Within our survey panel, almost eight out of ten (77%) had watched catch-up TV in the previous month.

Televisions were the most common device for this in absolute terms (53%), followed by desktops/ laptops (33%), then tablets (22%) and smartphones (10%).

However, in terms of propensity to watch ‘catch-up TV’, tablets and desktops/ laptops were tied in second place (looking at only those with access, around one-third of had viewed in each case).

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0 20 40 60 80 100

News

Catch Up

Access

0 20 40 60 80 100

News

Catch Up

Access

UK Households, 2014

Desktop or laptop computer Television Smartphone Tablet

18-24 year olds, 2014

Desktop or laptop computer Television Smartphone Tablet

Source: Markit, KPMG.

*An online survey was conducted amongst a panel of respondents aged 18-64. A total of 1,500 individuals were surveyed across Great Britain and the sample was structured according to gender, age, region and household income. Interviews were conducted between 8th – 13th October 2014. We estimate that an online sample approach should reach around 9/10 people aged 18-64 in the UK, given prevailing computer usage statistics released by the ONS for 2014. We have published figures as reported by our survey sample.

ALMOST EIGHT OUT OF TEN (77%) HAD WATCHED CATCH-UP TV IN THE PREVIOUS MONTH. MARKIT/KPMG

Methodology notes

Job market trends

Media sector landscape

Media consum

ption Executive sum

mary

Sector insight

© 2015 KPMG LLP, a UK limited liability partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.

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Media consumption: Ascent of tablets likely to gather pace over next six months

© 2015 KPMG LLP, a UK limited liability partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.

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DEMOGRAPHIC DIVIDE FOR CATCH-UP TV

Young tablet users (18-24 year olds) were especially likely to view catch-up TV (43% of those with access to a tablet). This contrasted with only 26% of 55-64 year olds with access to a tablet.

Although the youngest generation has a particularly large appetite for catch-up TV (86% have watched in the past month), this cohort is turning away from the television as the preferred means of viewing programmes.

Of the four devices monitored by the survey, those aged 18-24 were most likely to report viewing catch-up TV on desktops/laptops (53%), while television lagged in second place at 43%.

By contrast, for the oldest age group (55-64 years), the television was by far the dominant device for catch-up TV (45% reported usage, compared with 24% viewing on a desktop/laptop).

CATCH-UP TV NOW THE DOMINANT VIEWING PATTERN FOR SOME DEMOGRAPHICS

Overall, there is little sign from the latest survey that viewing of catch-up TV has started to peak. The shift away from live viewing was especially marked in the youngest age range, with more than half (55%) reporting that they now watched more programmes after they are broadcast.

The highest income earners are also much more likely to prefer catch-up TV, with exactly half of this group noting that they now watched more programmes after they are broadcast.

TV CONSUMPTION EXPECTED TO GROW FURTHER ON ALL DEVICES, ESPECIALLY TABLETS

Over the next six months, UK households expect to view more TV programmes on each of the media devices monitored by the survey.

Tablets are anticipated to see the sharpest gains in viewing patterns, with 14.1% of respondents expecting an increase and only 6% forecasting a reduction.

Only smartphones had a relatively subdued score for expected TV viewing over the next six months (83% expect no change), with expectations of an increase over the next six months largely confined to the youngest age groups.

YOUNGEST AGE GROUP BECOMING EVEN LESS LIKELY TO SEE THE TV AS THE DEVICE OF CHOICE

Reflecting a continuing shift away from televisions as the device of choice among those aged 18-24 years, this cohort are by far the most likely to anticipate an increase in viewing on desktops/laptops over the next six months (29% foresee a rise and only 8% a decline).

Those aged 18-24 years report that their viewing patterns are also likely to increase for smartphones and tablets, but a slight decline is seen for televisions over the next six months (18% expect a fall, while 17% anticipate a rise).

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TABLETS ARE ANTICIPATED TO SEE THE SHARPEST GAINS IN VIEWING PATTERNS, WITH 14.1% OF RESPONDENTS EXPECTING AN INCREASE. MARKIT/KPMG

0% 10% 20% 30% 40% 50% 60% 70%

Television

Desktop or laptop

Tablet

Smartphone

Catch-up TV viewing by age bracket

55-64 45-54 35-44 25-34 18-24

Catch-up TV viewing by income bracket

0% 10% 20% 30% 40% 50% 60% 70%

Television

Desktop or laptop

Tablet

Smartphone

Highest quintile

4th quintile 3rd quintile 2nd quintile Lowest quintile

Methodology notes

Job market trends

Media sector landscape

Media consum

ption Executive sum

mary

Sector insight

© 2015 KPMG LLP, a UK limited liability partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.

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Sources: KPMG, Markit.

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Media consumption: Tablet adoption to remain engine of growth for online news

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Television

Desktop or laptop

Tablet

Smartphone

Online news/magazine preferences by age bracket

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Online news/magazine preferences by income bracket

0% 5% 10% 15% 20% 25% 30% 35% 40%

Television

Desktop or laptop

Tablet

Smartphone

Highest quintile

4th quintile 3rd quintile 2nd quintile Lowest quintile

Sources: KPMG, Markit.

AROUND 36% OF THOSE WITH ACCESS TO A TABLET REPORTED USING THE DEVICE FOR ELECTRONIC VERSIONS OF NEWSPAPERS OR MAGAZINES. MARKIT/KPMG

© 2015 KPMG LLP, a UK limited liability partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.

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SIZABLE DEMOGRAPHIC DIVIDE FOR ONLINE NEWS AND MAGAZINE READERSHIP HABITS

The latest survey highlights diverging trends across age groups in terms of newspaper and magazine consumption. Those aged 25-34 years indicated the greatest preference towards online access; of those that read newspapers and magazines in this cohort, 58% favoured online access, against 30% that spent more time reading print versions (12% reported ‘about the same’).

Meanwhile, at the other end of the spectrum, the majority of 55-64 year olds (61%) noted that they spent most time accessing print magazines and newspapers (only 27% reported a greater tendency to access publications online).

TABLET OWNERS MOST LIKELY TO CONSUME ONLINE NEWS AND MAGAZINES

As expected, of those that read electronic versions of newspapers or magazines (just over half of the survey panel), desktops/laptops were the most common device used.

However, in terms of propensity to read electronic versions of newspapers or magazines, tablet owners come out on top. Around 36% of those with access to a tablet reported using the device for electronic versions of newspapers or magazines.

This propensity to consume online news and magazines on tablet devices was especially marked among 18-24 year olds (40% of owners) and those in the highest income group (47% of tablet owners in this cohort).

CONSUMPTION OF ONLINE NEWSPAPERS AND MAGAZINES WIDELY EXPECTED TO INCREASE

The latest survey suggests a gradual rise in online newspaper and magazine consumption over the next six months. Across all UK households, just over 11% anticipate an increase, while only 4% forecast a reduction.

Among 18-24 year olds, just under one-in five expect to see an increase in their reading of online newspapers and magazines over the next six months, while just 5% foresee a decline. People aged 25-34 are similarly positive, with 16% anticipating a rise and 3% a fall.

Meanwhile, looking at the results by income level, the highest earning group were most likely to expect an increase in their reading of online news and magazines over the next six months (16%).

Methodology notes

Job market trends

Media sector landscape

Media consum

ption Executive sum

mary

Sector insight

© 2015 KPMG LLP, a UK limited liability partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.

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© 2015 KPMG LLP, a UK limited liability partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.

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MEDIA SECTOR LANDSCAPEMedia sector landscape: Positive trends emerge in 2014 overall, led by adspend rebound

This section evaluates the current media sector landscape through the lens of new figures derived from two widely-watched surveys. The underlying information sources are

Markit’s UK Purchasing Managers’ Index® (PMI ®) series, and the IPA Bellwether survey of marketing budgets from the Institute of Practitioners in Advertising. Our headline figure, the UK media sector tracker, combines these two

sources into a single index of industry performance.

KEY POINTS FOR 2014 AS A WHOLE

UK media companies registered a sustained rebound in business conditions over the course of 2014, according to the latest survey findings.

Looking at 2014 as a whole, the UK media sector tracker – a composite index based on trends in media sector business activity and UK marketing executives’ adspend budgets** – highlights that the sector experienced its strongest overall improvement in business conditions since 2007. This represents a sharp turnaround in fortunes, given the stuttering media sector recovery in the aftermath of the 2008/09 economic downturn.

Moreover, an overall improvement in business conditions throughout 2014 marks a second consecutive calendar year of growth. The current rebound follows a decline in business conditions during 2012, when overall performance was negatively influenced by double-dip recession worries and a retrenchment in marketing budgets after the London Olympics.

ADSPEND REVISIONS PROVIDE BOOST IN 2014

One of the key factors supporting media sector business conditions in 2014 was the stronger-than-expected performance of the UK economy. As associated upturn in corporate expenditure filtered through to UK marketing budgets, with media adspend patterns and internet marketing spend improving as a result.

On average in 2014 as a whole, more than twice as many UK marketing executives (21%) reported a rise in media budgets revisions** as those experiencing a decline (10%).

At 55.4 in 2014, the resulting index reading for media budget revisions was the highest of any calendar year since the series began in 2000, signalling a sharp shift in momentum amid brightening UK business sentiment.

MODEST EXPANSION OF UK MEDIA SECTOR BUSINESS ACTIVITY IN 2014

While positive marketing budget revisions ushered in a revival in media adspend revenues, the UK

media tracker pointed to relatively lacklustre total business activity growth at UK media companies during 2014 as a whole, suggesting that the sector underperformed the steep recovery seen across the wider economy.

At 51.9, the average index reading for media sector business activity in 2014 was above the neutral 50.0 threshold, but up only slightly from 51.5 in 2013. Moreover, media sector business activity growth for the calendar year compared unfavourably with the trends seen in the period leading up to the recession (the index averaged 55.7 from 2000 to 2007).

As a result, the latest findings indicate that the UK media sector recovery is still struggling for lift off, despite support from an improving economic backdrop and a corresponding strong upturn in marketing spend. Business activity trends are undoubtedly positive as we move into 2015, but still not as brisk as those seen in the pre-financial crisis era.

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Methodology notes

Job market trends

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Media consum

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mary

Sector insight

© 2015 KPMG LLP, a UK limited liability partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.

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UK Media Sector Tracker (components)

UK Media Budget Revisions UK Media Business Activity

UK Media Sector Tracker

UK Media Sector Tracker

Sources: KPMG, Markit, IPA.

*Index numbers vary between 0 and 100, with levels of 50 signalling no-change. Readings above 50 signal an increase, whilst postings below 50 indicate a decrease. The greater the divergence from 50, the greater the rate of change signalled by the reading.

**Methodology notes can be found on page 16.

THE UK MEDIA TRACKER POINTS TO A SUSTAINED REBOUND IN BUSINESS CONDITIONS ACROSS 2014 AS A WHOLE. MARKIT/KPMG

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UK media sector business cycle UK service sector business cycle

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© 2015 KPMG LLP, a UK limited liability partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.

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Media sector landscape: Positive final quarter of 2014, but growth still below Q1 peak

Q4 DATA SIGNAL SLIGHT GROWTH UPTURN

Looking at the survey findings on a quarterly basis, we find that short-term growth trends picked up in Q4, but the overall speed of recovery may have peaked in the first quarter of 2014.

At 54.0 in Q4, up from 53.2 in Q3, the headline UK media sector tracker – which is a composite index designed to track overall media sector business conditions – registered comfortably above the 50.0 ‘no-change’ level and remained stronger than its long-run average (51.6). However, the latest figure was still below the post-financial crisis peak of 54.2 in Q1 2014.

Q4 figures suggest that the UK media sector experienced an upturn in both business activity and adspend revenues at the end of 2014.

The latest survey indicated a rise in business activity at 27.5% of UK media companies, which exceeded the proportion that noted a fall (20.8%).

Meanwhile, the trend indicator for media marketing budgets also remained positive during the final quarter of 2014, with just over one-in-five reporting an upward revision and around 12% signalling a decline.

MEDIA SECTOR UNDERPERFORMS IN Q4

As expected, the UK media sector tracker generally follows a similar cycle to the wider economy, albeit

with differing peaks and troughs. However, growth momentum

across the media sector has fallen behind that of the wider service economy over the past two years, despite the

gap narrowing in Q4 2014.

UK service providers saw output levels rebound relatively strongly

through Q4, although the pace of expansion eased since Q3, while the media sector tracker remained on a slower growth plane than the wider service economy.

UK Media Sector Tracker

UK media sector business cycle UK service sector business cycle

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Methodology notes

Job market trends

Media sector landscape

Media consum

ption Executive sum

mary

Sector insight

© 2015 KPMG LLP, a UK limited liability partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.

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THE LATEST SURVEY INDICATED A RISE IN BUSINESS ACTIVITY AT 27.5% OF UK MEDIA COMPANIES. MARKIT/KPMG

UK Media Sector: Business Activity Q4 2014 (seasonally adjusted)**

51.7% Same

27.5% Higher

20.8% Lower

UK Media Sector: Marketing Budgets Q4 2014 (seasonally adjusted)**

66.5% Same

21.3% Higher

12.1% Lower

Source: Markit/KPMG, IPA

*Index numbers vary between 0 and 100, with levels of 50 signalling no-change. Readings above 50 signal an increase, whilst postings below 50 indicate a decrease. The greater the divergence from 50, the greater the rate of change signalled by the reading.

**Methodology notes can be found on page 16.

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JOB MARKET TRENDSJob market trends: Media sector job security worsens and pay trends remain muted

In this section we compare media sector labour market trends against UK benchmarks, drawing on

Markit’s Household Finance Index (HFI) survey, as well as official data, to give a timely indication of

media sector job market conditions.

THE MAIN FINDINGS FOR Q4 2014 ARE:

The latest survey indicates that people working in the media/culture/entertainment sector were downbeat overall about their job security in the final quarter of 2014, and the degree of negative sentiment was the most marked for one year.

More than one-in-four (27%) media/culture/ entertainment professionals perceived their job security to have deteriorated in Q4, compared with around 11% that signalled an improvement. As has been the case since mid-2014, this measure of labour market sentiment across the media sector remained more subdued than the UK economy average.

Meanwhile, media sector respondents reported an overall squeeze on their income from employment at the end of 2014. Around 19% of respondents noted a drop in income from employment, while only 14% signalled a rise. At 47.7, the resulting index reading was below the UK-wide benchmark at the end of 2014 (49.3). Looking ahead, close to 36% of media sector employees expect an improvement in their household finances over the next 12 months, while 31% forecast a fall.

That said, media professionals are more upbeat regarding the outlook for their overall household finances than the UK-wide benchmark (32% of households expect an improvement over the year ahead, while 30% anticipate a decline).

OFFICIAL DATA FOR MEDIA SECTOR SALARIES

Data from the 2014 ONS Annual Survey of Hours and Earnings showed that salaries in the media sector remained considerably above the UK average. Media professionals’ median annual earnings were £30,553, compared with £22,044 for employees across all sectors. On an hourly basis, median earnings for media workers were £16.82, versus a UK benchmark of £11.61.

Advertising accounts managers & creative directors were the best-paid category, with median earnings of £36,168 per annum. This compared with journalists, newspaper & periodical editors at £30,707 and public relations professionals at £27,373.

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All employees

© 2015 KPMG LLP, a UK limited liability partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.

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Media/Culture/Entertainment employees

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Methodology notes

Job market trends

Media sector landscape

Media consum

ption Executive sum

mary

Sector insight

© 2015 KPMG LLP, a UK limited liability partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.

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Distribution of hourly earnings (£)

UK average Media professionals

Hourly earnings (£)

Public relations professionals Journalists, newspaper and periodical editors

Advertising accounts managers and creative directors

Source: Markit/KPMG, ONS.

*Index numbers vary between 0 and 100, with levels of 50 signalling no-change from the previous month. Readings above 50 signal an increase since the previous month, whilst postings below 50 indicate a decrease. The greater the divergence from 50, the greater the rate of change signalled by the reading.

**Methodology notes can be found on page 16.

AROUND 36% OF MEDIA SECTOR EMPLOYEES EXPECT AN IMPROVEMENT IN THEIR HOUSEHOLD FINANCES OVER THE NEXT 12 MONTHS, BUT 31% ANTICIPATE A FALL.MARKIT/KPMG

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METHODOLOGYNOTES

UK MEDIA SECTOR PURCHASING MANAGERS’ INDEX® (PMI®) SURVEY DATA

UK media sector PMI data has been derived from a sub-category of companies within Markit’s regular surveys of UK service providers and manufacturers. The media sector is defined in this report as advertising & marketing, programming and broadcasting activities, motion picture, video and other media production activities, publishing activities. All figures are seasonally adjusted and smoothed using a three-month moving average, to better highlight underlying trends in the data.

UK MEDIA SECTOR; MARKETING BUDGETS DATA

The Bellwether survey is researched and published by Markit Economics on behalf of the Institute of Practitioners in Advertising. Data are drawn from a panel of around 300 UK marketing professionals and provides a key indicator of the health of the economy. The survey panel has been carefully selected to represent all key business sectors, drawn primarily from the nation’s top 1000 companies. The indicator derived in the Media Barometer is based on the following questions within the IPA Bellwether survey (this index is a moving weighted average of main media and internet budget revisions):

i) In the last three months, has your main media advertising budget for the current financial year been revised up or down, or is it unchanged? (Largest adspend weight in the UK media tracker).

ii) In the last three months, has your internet marketing budget and your internet search/search engine optimisation (SEO) budget for the current financial year been revised up or down, or is it unchanged? (Smallest adspend weight in UK media tracker).

ABOUT THE INSTITUTE OF PRACTITIONERS IN ADVERTISING

The IPA is the industry body and professional institute for leading UK advertising, media planning and buying, and marketing communication agencies. It provides a full range of services to its members: from advice (legal, sector and management), awards and events, best practice, information, research studies and training as part of an extensive CPD programme. It is also the agency industry spokesman.

UK MEDIA SECTOR LABOUR MARKET SENTIMENT SECTION; TECHNICAL DETAILS

Ipsos MORI interviewed 1500 adults aged 18-64 across Great Britain from its online panel of respondents. Interviews were conducted online during the third quarter of 2014. A representative sample of adults was interviewed with quota controls set by gender, age and region and the resultant survey data weighted to the known GB profile of this audience by gender, age, region and household income. Ipsos MORI was responsible for the fieldwork and data collection only and not responsible for the analysis, reporting or interpretation of the survey results.

© 2015 KPMG LLP, a UK limited liability partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.

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Methodology notes

Job market trends

Media sector landscape

Media consum

ption Executive sum

mary

Sector insight

© 2015 KPMG LLP, a UK limited liability partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.

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David Elms Partner, KPMG Tel:+44 (0) 207 311 8568 [email protected]

contact David on Linkedin

The intellectual property rights to the UK Media Tracker Sector Purchasing Managers’ Index® (PMI®) data provided herein are owned by or licensed to Markit Economics Limited. Any unauthorised use, including but not limited to copying, distributing, transmitting or otherwise of any data appearing is not permitted without Markit’s prior consent. Markit shall not have any liability, duty or obligation for or relating to the content or information (“data”) contained herein, any errors, inaccuracies, omissions or delays in the data, or for any actions taken in reliance thereon. In no event shall Markit be liable for any special, incidental, or consequential damages, arising out of the use of the data. Purchasing Managers’ Index® and PMI® are either registered trade marks of Markit Economics Limited or licensed to Markit Economics Limited. Markit is a registered trade mark of Markit Group Limited.

The information contained herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavour to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation.

© 2015 KPMG LLP, a UK limited liability partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.

The KPMG name, logo and “cutting through complexity” are registered trademarks or trademarks of KPMG International.

OLIVER for KPMG | OM030302A | January 2015kpmg.com/uk/mediatrackeruk