UK broadcasters must adapt as TV watching moves online-regulator

LONDON, July 2 (Reuters) - Britons are increasingly watching television online creating new challenges for the country's public service broadcasters (PSBs) which should look to adapt their models accordingly, said the country's telecoms regulator in a review.

Ofcom said on Thursday only 69 percent of viewing by British adults was now through live TV due to the growth in online and on demand TV on mobile devices. Among 16 to 24-year-olds, only 50 percent of viewing was done through live TV.

The BBC and ITV (LSE: ITV.L - news) and other PSBs, which in return for the right to broadcast have costly obligations such as news provision, must keep up with the shift to online viewing to ensure they retain a high visibility and can compete with rival services from Netflix (Xetra: 552484 - news) and Amazon, said the review.

"They (the PSBs) must continue to find new ways of connecting with audiences, and the PSB system needs to evolve to ensure it remains effective in the digital age," said Ofcom chief executive Sharon White.

Ofcom said that the government also needed to consider the effectiveness of the PSB framework in the internet age.

The changing media landscape has already prompted a consultation on whether PSBs could be allowed to charge cable and satellite pay-TV companies like Virgin Media and satellite broadcaster Sky (Other OTC: BSYBF - news) for carrying their channels.

In its first review of PSB since 2008, Ofcom also said it was performing well with high satisfaction levels and over half of all TV viewing was to the main PSB channels.

The BBC, the cornerstone of PSB which reaches 96 percent of the population on a weekly basis, will be soon be the subject of a further review process as its remit and independence are underpinned by a Royal Charter that runs out at the end of 2016.

The 93-year-old organisation has a central presence in British cultural life, but the 145.50 pound ($226.78)annual licence fee paid by every household with a television, has long jarred with some viewers and politicians, and a parliamentary committee said this year it should be scrapped.

On Tuesday, the BBC Trust, the broadcaster's governing body, backed the decision to convert BBC Three, which is aimed at younger viewers, into an online only channel because it had a falling audience. ($1 = 0.6416 pounds) (Reporting by Sarah Young; editing by Michael Holden)