BBC iPlayer growth continued to slow through 2015 as Q4 saw average monthly requests eke out a 0.5% gain over Q4 2014. What did change dramatically in 2015 was the age profile of the people using iPlayer. The 16-34 year olds now dominate. Could this spell trouble for funding the BBC, since licensing is based on TV access not online?
In the three months November to January 2016 iPlayer saw year-over-year growth in requests turn negative. In November, there were 252 million TV requests, down 1.95% over the same month in 2014, December was down 2.23%, and January down 8.42%. The fourth quarter in 2015 was the slowest growth the company has seen, up just 0.5% over Q4 2014, to 253 million requests a month.
Another trend that seems to be reversing itself is the move to mobile. Tablet share of online requests in January was 28.6%, down from 35.2% one year earlier. Smartphone usage also lost share, down from 27.4% in Jan 2015 to 23.5% in January 2016. Given that viewing requests were essentially flat year-over-year it’s apparent that much of that viewing is transferring back to the television.
Connected TV requests increased more than 3 times, to 10.7% of all online requests in the last year. One platform that is not driving this growth is the game console. The number of monthly requests from Playstation, Xbox and Wii fell from 4.6% in January 2015, to 3.6% in January 2016. The UK, like the US, has seen a raft of streaming media player releases, including a cheap box from Now TV. These are likely driving the growth in connected TV viewing.
Most startling of all is the dramatic shift in the age groups that are using iPlayer. In 2014 and much of 2015, iPlayer requests were even split at 38% for both the 16-34 and 35-54 year olds, with the over 55s responsible for about a quarter. By the beginning of 2016, the 16-24 year olds had increased their share to 45%, at the expense of the 55+ year olds, which had fallen to 18%.
This could be a problem for the BBC. There is a debate raging in the UK about how to make sure iPlayer-only users pay their fair share. The BBC is funded by a requirement that households buy a television license. However, if a household doesn’t have a television, and accesses BBC content through the iPlayer on some other connected device, they do not need to pay the license fee (£145.50 or $208 a year.)[Update: A reader reminded me that when accessing live channels through iPlayer, a user is legally required to pay the license fee. That said, only 8% of TV requests are for live channels through iPlayer.]
The BBC data suggests that the young have begun to zero-in on iPlayer as way to watch television. Given their proclivity to use their smartphones and PCs to view video, it could be that they have realized they can save the license fee by watching in this way.
Does this mean the BBC is missing out on a lot of revenue through this license loophole? And are large numbers of young people taking advantage of it? Probably not. In the UK there are just over 27M people watching television at peak viewing times. At peak iPlayer usage times (which occurs roughly at the same time as peak TV viewing) there are 624,000 people watching. In other words, the iPlayer peak audience is just 2% of the TV peak audience.
There are also around 7.5M UK citizens in the age range 16-24. If 45% of peak iPlayer users are in that age range, that is 280,000 viewers, or less than 4%.
Last year, the BBC earned £3.73B ($5.3B) in license revenue, and the corporation itself estimates the losses to the license loophole at just £150M.
Watch for the viewer profile of iPlayer to continue to shift toward the young. In February, the BBC switched the youth oriented free-to-air broadcast station BBC Three to online only delivery through iPlayer.
You can always find the latest BBC iPlayer data in the trackers section of the nScreenMedia website.
Why it matters
The iPlayer user profile shifted dramatically toward the 16-24 year olds in the latter half of 2015.
Since the young prefer to watch on connected devices, not the television, might they be taking advantage of the license loophole to avoid paying for the BBC content they are viewing?
No. At most under 4% of the young might be doing this.