The increasing popularity of Netflix and Amazon have stimulated a 76% revenue boost for the subscription video-on-demand platforms in the UK.
According to Ofcom’s Communications Market Report 2014 revenue for online subscriptions for audio-visual content swelled to £111.7m in 2013 from £63.5m in the preceding 12 months.
Netflix reached 1.5 million subscribers in 2013, many of whom use the service to watch exclusive content such as House of Cards. It also allows viewers to consume popular series such as Breaking Bad at their convenience rather than waiting for episodes like traditional television.
The service is also ramping up its original content strategy, signing a deal in May with Sony-owned Left Bank to produce of The Crown, a drama series about the Queen.
Meanwhile, Amazon is vying for exclusive content and recently picked up Halle Berry sci-fi drama Extant to increase competition with terrestrial broadcasters.
The growth in subscriptions has contributed to the overall growth in online television revenues which jumped 41% from £257.7m in 2012 to £363.6m in 2013. Online revenues accounted for £50m in 2008.
The majority of the £363.6m revenue came from free-to-view advertising revenue, which accumulated £183.9m in 2013. Catch-up services such as 4oD, ITV Player and Demand 5 are funded wholly or in part by this business model according to the communications watchdog.
Adding to the total figure was pay-per-view services, such as Sky’s Now TV, which generated £6.1m in 2013, growing from £3.5m in 2012. The download-to-own business model also experienced 40% growth, from £44.3m in 2012 to £61.8m in the following 12 months.