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Free-to-air TV struggling in Australia


The introduction of new digital media is fragmenting media viewing and access patterns, particularly among people aged 15 to 30 years. As a result, free-to-air TV in Australia is struggling to maintain audience numbers and its share of total advertising revenue. For these reasons, industry research firm IBISWorld has updated its report on the Free to Air Television Services in Australia industry.

IBISWorld analyst Nick Sallmann, says ‘as a result of this fragmentation, free-to-air TV is struggling to maintain audience numbers and its share of total advertising revenue.’ IBISWorld anticipates that revenue for the Free to Air Television Services industry in Australia will increase 1.5 per cent in 2011-12, to reach $5.0 billion. However, over the five years through 2011-12, revenue is expected to decline 4.4 per cent per annum. The commercial segment of the industry is sensitive to advertising revenue allocated to free-to-air TV services relative to other media such as radio, newspapers, magazines and new digital media. Revenue is also influenced by the penetration of pay-TV services into households, as this affects available audience size, an important consideration for advertisers.

Over the five years through 2016-17, industry revenue is forecast to grow. However, a decline is expected in the national audience watching free-to-air TV, despite further developments in new digital media for commercial TV. ‘Advertising will continue to be diverted away from the costly main media in favour of direct promotional activities,’ Sallmann adds. A more recent competitor to the industry, the internet, is likely to become the most dominant form of video provision in the future.

In total, there are nine networks shaping the Free to Air Television Services industry in Australia. The top three players are Seven, Nine and Ten. Each of the top players is affiliated with a local network, either Prime Media, WIN Corp. or Southern Cross. In addition to these six, there are two government funded stations: the ABC and SBS (SBS also has commercial revenue streams). Lastly, there is Imparja Television, a commercial station that broadcasts to remote central Australia. The market share concentration is currently in a very volatile state. The change into digital broadcasting saw the introduction of many new stations from all major networks. In doing so, the networks have risked devaluing advertising air time. This only scrapes the surface of changes being made in the effort to increase media channels and potential advertising revenue. The Internet is proving to be the new battleground of video content and is expected to change the entire structure of the industry.


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Free-to-air TV struggling in Australia





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