PwC: UK value online media understated by 17 billion

14 July 2015

With more and more content available for free, the value consumers put on this content is not matched by the price they pay to access it, resulting in consumer surplus of online content. In the UK, this surplus is £17 billion, almost triple from the 2007 level, analysis by PwC shows.

Professional services firm PwC recently released an analysis into the ‘consumer surplus’ of online content in the UK. The firm explains that the increasing availability of online content available for a small charge or even for free results in an underestimation of the value of this content, as the amount paid is often less than the value consumers put on the content.

To be able to value this UK surplus, PwC used a 2013 study from The Boston Consulting Group (BCG), which estimates an annual surplus of £700 for online media access per connected UK consumer, and combined this with ONS data on the proportion of the UK adult population engaged in internet activities between 2007 and 2014. The PwC research focuses on online reading – reading or downloading online news, newspapers, magazines and books – and online entertainment – playing or downloading games, images, films or music. 

UK consumer surplus from online media

Between 2007 and 2014, the proportion of UK adults engaged in online reading grew from 20% to 55% and online entertainment from 24% to 44%. Combining these increases with the growth in the adult UK population, PwC estimates a total consumer surplus from these online activities of £17 billion in 2014, up from £6.7 billion in 2007.

According to John Hawksworth, Chief Economist of PwC, this increase reflects the difficulties companies experience in charging for content and the need to find other ways to raise revenue. “The challenge for businesses will be to find imaginative ways to capture more of the value from their services without unduly curbing consumer access to online content.”


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Grant Thornton advises on deal for high-growth cloud hosting firm

08 April 2019

Grant Thornton’s North West Corporate Finance team has completed its first TMT deal of 2019. The professional services firm advised the shareholders of Hosted Desktop UK on their investment from specialist SME lender Beechbrook Capital.

Technological disruption and changing consumer behaviour have continued to affect top Technology, Media & Telecommunications (TMT) players in recent years. The industry has seen revenues border on stagnation over the past decade, at 0.4% annual growth since 2008. While the industry is keen to develop new digital services and models to meet market challenges, they face a range of barriers – meaning the recruiting of talent specialising in innovative software and technology has become a key goal for the industry.

Amid this, Hosted Desktop UK (HDUK) provides cloud computing services to small and medium sized businesses across the UK. The firm’s cloud solutions provide businesses with IT reliability, flexibility, value for money and business continuity. As the firm bids to grow in the UK, with demand for its disruptive technologies high, HDUK has secured a key investment from specialist SME lender Beechbrook Capital.

Grant Thornton advises on deal for high-growth cloud hosting firm

The transaction was Beechbrook Capital’s maiden deal from its latest UK SME credit fund, which supports small and medium-sized businesses in the UK with EBITDA of £1 million and above. Manchester law firms Pannone Corporate (sell-side advice, led by Mark Winthorpe) and DWF LLP (buy-side advice, led by Jonathan Robinson) also advised on the deal, while Grant Thornton’s North West Corporate Finance team advised HDUK’s shareholders.

The deal represents the Grant Thornton branch’s first TMT deal of 2019, with a team comprised of Partner and Head of Corporate Finance Peter Terry, Manager Daniel Brecker and Assistant Manager Cariad Mudford advising HDUK shareholders on the investment. It is the third key deal in the TMT sector that the GT North team has advised on in the last 18 months, following the £16.5 million sale of Salford-based Sonassi to Iomart in December 2017 and NorthEdge Capital’s investment in Yorkshire company iPortalis in August 2018.

Grant Thornton’s Peter Terry said of the news, “As our domestic and working lives become ever-more technology dependent, it’s no surprise that there continues to be strong investor interest in any asset in the cloud computing, data infrastructure and connectivity space… We were pleased to work with Beechbrook Capital on the first deal in its new fund. It shows that despite the well-documented uncertainties in the economy there are still good funding options for dynamic SMEs and their management teams.”