2008 Australia - Broadcasting and Pay TV

Publication Overview

For those needing high level strategic information and objective analysis of Australia’s FTA TV, Digital TV, Pay TV and radio markets in Australia, this report provides essential reading and gives in-depth information on:

·         Revenue and subscriber statistics;

·         Analyses of market and industry trends and developments;

·         Regulatory and government policy developments;

·         Overviews of key market segments including: Personal Video Recorders, digital radio, Interactive TV, Set Top Boxes, podcasting and datacasting;

·         Overviews of major players in the market including: Foxtel, Austar and the FTA networks. 

 

Researcher: Phil Harpur

Current Publication date: March 2008 (9th Edition)

Next Publication date: March 2009

 

Executive Summary

BuddeComm’s 2008 Australia Broadcasting and Pay TV Annual Publication profiles key market sectors in Australia’s free-to-air TV, digital TV, pay TV and radio markets. It provides revenue and subscriber statistics as well comprehensive market overviews in areas such as personal video recorders, digital radio, Interactive TV, set-top boxes, podcasting and datacasting.

 

The report reveals that although the dominance of FTA television as a mass communication medium has been unsurpassed for many decades, the industry is now facing challenges from a number of fronts as incumbent broadcasters cling to their lucrative oligopolies. Digital FTA TV has been held up in a vicious cycle since it was launched in 2001. Available digital content, beyond simply offering better picture qualities, has been nowhere near sufficient to help drive digital TV.

 

The recent changes to media ownership and broadcasting regulations in Australia are likely to lead to further consolidation of radio operators and increased cross-media ownership. The proposed shake up of the market by Lachlan Murdoch could start off a range of new developments. Competition from within and outside the industry, which is already strong, is predicted to increase.

 

After decades of delays, digital radio will finally be introduced in Australia from January 2009. It however seems that the radio innovations for the foreseeable future will come from the Internet and other new media developments rather than from the radio broadcasting industry.

 

Key highlights:

Free-to-air TV

·         Marketing and media buyers are increasingly turning to alternative media, such as through Internet and mobile channels in order to reach consumers. The Internet will become increasingly entertainment-based as broadband penetration is predicted to continue to rise steadily over next few years.

·         Consumers will be demanding a richer and extensive online experience through services such as video-based entertainment.

·         The FTA networks are expected to see intense competition for viewers and advertising in 2008 and beyond, which will impact on their cost margins as they will be forced to put more money into programming and marketing. For more information, see chapter 2.1, page 9.

·         TV stations will be forced to market themselves more aggressively due to threats from the new media sector. Broadcasting’s ad revenues are already gradually being squeezed due to falling audiences and rising costs.

 

Digital TV

·         By 2008, the move towards flat panel TVs had further accelerated with CRT TVs only constituting a very small proportion of TV sales as the price of the smaller screen LCD TVs and standard definition plasmas had dropped further. This trend will continue to accelerate through to 2009 as CRT televisions should by that time be totally phased out by retailers. For more information, see chapter 3.1, page 31.

·         Household penetration of digital TVs (including set-top boxes, PVRs and integrated digital TV sets), is predicted to rise from 28% in 2007 to 37% in 2008 and 51% by 2008.

·         Pay TV DVRs currently dominate the DVR market, with proprietary FTA based recorders (mainly TiVo recorders) taking only a small slice of the market. Of the pay TV market, the Foxtel iQ recorder holds the vast majority.

·         BuddeComm predicts that the launch of Seven’s TiVo recorder will lift the numbers of current FTA PVRs, but not to level significant enough to break out of its niche product status, or to be of any sort of threat to the pay TV PVR model. For more information, see chapter 3.8.9.2, page 50.

 

Pay TV

·         Early indicators show that digitalisation of the service alone has not made a huge difference to pay TV. People continue to look for good content, and in principle, the more channels the better, plus reasonable prices.

·         By 2007 pay TV penetration had only reached 24%, and growth is expected to continue to increase modestly to around 29% by 2009. However this still falls well short of most other developed nations.

·         While it is still not impossible for pay TV penetration to reach the 40% penetration mark, this can only reached if pay TV companies offer more attractive price packages, or include competitively priced broadband.

·         An overall pay TV revenue growth of 14% was recorded in 2007 and we expect growth to remain reasonably strong in 2008, with a slight drop to around 12%. For more information, see chapter 4.6.2, page 92.

·         From 2007 the cost structure of the industry began to become more sustainable and the industry reaches profitable territory. This trend is continuing into 2008.

 

Pay TV subscribers by operator – 2004 - 2007; 2009

Year

Austar

Foxtel retail

Optus2

Foxtel wholesale (Optus & TransACT)

Foxtel total

Others3

Total1

2004

490,000

930,000

0

186,000

1,116,000

12,500

1,618,500

2005

534,000

1,025,000

0

157,000

1,182,000

15,000

1,731,000

2006

601,100

1,130,000

0

140,000

1,270,000

19,000

1,890,100

2007

679,000

1,292,000

0

151,000

1,443,000

20,000

2,142,000

2009(e)

782,000

1,492,000

0

160,000

1,652,000

24,000

2,458,000

(Source: BuddeComm, Telecommunications Strategies Report)

Notes:

1year ends June.

2since 2003 Optus figures are included in Foxtel.

3Others includes Neighbourhood Cable.

 

Radio

·         Although its advertising base is growing, the radio market is losing share to other media sectors such as TV. The declining power of FM radio is expected to be a key trend during 2008 and beyond.

·         The launch of digital radio, which will start in capital cities from January 2009, is expected to cost the radio sector about $400 million. For more information, see chapter 5.2.2.2, page 115.

·         Rather than looking at it as essential infrastructure technology, which would allow radio broadcasters to run their networks more efficiently and effectively, the industry has concentrated on finding exclusive services that they could offer over this network.

 

Table of Contents

  • 1. Overview and Analysis
    • 1.1 Free-to-Air TV
      • 1.1.1 Market overview and trends
      • 1.1.2 Market statistics
      • 1.1.3 FTA broadcasters
    • 1.2 Digital TV
      • 1.2.1 Market trends
      • 1.2.2 Market statistics
      • 1.2.3 Digital Video Recorders
      • 1.2.4 Interactive TV
      • 1.2.5 Set-top Boxes (STBs)
      • 1.2.6 Datacasting
    • 1.3 Pay TV
      • 1.3.1 Subscriber statistics and analysis
      • 1.3.2 Revenue statistics
    • 1.4 Radio
      • 1.4.1 Market trends
      • 1.4.2 Market statistics
      • 1.4.3 Digital radio
  • 2. Free-to-Air TV
    • 2.1 Market trends and analysis
    • 2.2 Market statistics and revenue
      • 2.2.1 Introduction
      • 2.2.2 Market statistics
      • 2.2.3 Four-year predictions to 2011 – PwC
    • 2.3 Film spending and production
    • 2.4 Financial overviews
      • 2.4.1 Revenues
    • 2.5 FTA broadcasters market overview
    • 2.6 National broadcasters
      • 2.6.1 Public broadcasters
      • 2.6.2 Commercial networks
    • 2.7 Regional broadcasting
      • 2.7.1 Commercial television broadcasting licences
      • 2.7.2 Regional licence area plans
      • 2.7.3 Television aggregation
      • 2.7.4 Major players
    • 2.8 Community television broadcasting services
    • 2.9 Indigenous broadcasters
      • 2.9.1 Imparja Television
      • 2.9.2 National Indigenous Television Service (NITV)
      • 2.9.3 Warlpiri Media Association, Yuendumu, Western Desert
      • 2.9.4 Ernabella, north western South Australia
      • 2.9.5 Radio 4aaa Murri Country, Brisbane
  • 3. Digital TV
    • 3.1 Market trends and developments
      • 3.1.1 Digital television – slow but steady growth
      • 3.1.2 Seven and Ten launch new digital FTA high definition channels
    • 3.2 Market statistics and forecasts
      • 3.2.1 Statistics – 2007 and 2008
    • 3.3 Market surveys
      • 3.3.1 Canon Digital Lifestyle Index survey – 2007
      • 3.3.2 The connected home
      • 3.3.3 ACMA Digital Media in Australian Homes – 2006
      • 3.3.4 Digital media in Australian homes – 2006 survey
    • 3.4 Market analysis
      • 3.4.1 Patchy digital TV reception – yet another stumbling block
    • 3.5 Regional overview of broadcasters
    • 3.6 Media reforms
      • 3.6.1 Update
      • 3.6.2 Background
      • 3.6.3 Australian Government launches digital action plan
    • 3.7 Technological environment
      • 3.7.1 Digital TV standards
      • 3.7.2 Single Frequency Network options for digital TV
    • 3.8 Digital video recorders
      • 3.8.1 Introduction
      • 3.8.2 Technical description
      • 3.8.3 Functional overview
      • 3.8.4 Global developments
      • 3.8.5 Electronic Program Guides (EPGs)
      • 3.8.6 Home media centres
      • 3.8.7 Subscriber statistics and forecasts
      • 3.8.8 Market analysis
      • 3.8.9 Free-to-Air DVRs
      • 3.8.10 DVR analysis
      • 3.8.11 Pay TV DVRs
      • 3.8.12 Television advertising
      • 3.8.13 Developments in the USA
    • 3.9 Interactive TV
      • 3.9.1 Market overview
      • 3.9.2 Definitions
      • 3.9.3 The future of VoD – analysis
      • 3.9.4 iTV analysis
      • 3.9.5 Interactive advertising developments
      • 3.9.6 Market analysis – interactive advertising
      • 3.9.7 Global market analysis
      • 3.9.8 Case studies
    • 3.10 STB overview and analysis
      • 3.10.1 Market overview by sector
      • 3.10.2 Market and regulatory developments
      • 3.10.3 Set-top box platform technologies
      • 3.10.4 Set-top box analysis
    • 3.11 Electronic Program Guides
      • 3.11.1 Introduction
      • 3.11.2 Brief overview of DVRs
      • 3.11.3 Brief overview of Home Media Centres
      • 3.11.4 The EPG market
      • 3.11.5 Key players
      • 3.11.6 EPG analyses
      • 3.11.7 Forecasts
    • 3.12 Datacasting overview and analysis
      • 3.12.1 Regulatory framework
      • 3.12.2 Government digital media reforms
      • 3.12.3 Other market developments
      • 3.12.4 Summary of datacasting developments and trials
  • 4. Pay TV
    • 4.1 Market overview
    • 4.2 Market statistics
      • 4.2.1 Subscriber statistics
      • 4.2.2 Telstra bundled pay TV services – 2007
      • 4.2.3 Consumer penetration statistics
      • 4.2.4 Pay TV viewing statistics
    • 4.3 Penetration analysis
    • 4.4 Pay TV penetration forecasts to 2011
      • 4.4.1 Scenario 1 – lower pay TV subscriber growth
      • 4.4.2 Scenario 2 – higher pay TV subscriber growth
    • 4.5 Major players – overview and major developments
      • 4.5.1 Market overview
      • 4.5.2 Foxtel
      • 4.5.3 Optus
      • 4.5.4 Austar
      • 4.5.5 SelecTV
    • 4.6 Revenue statistics
      • 4.6.1 Revenues
      • 4.6.2 Revenue analysis
      • 4.6.3 PVR analysis
      • 4.6.4 Pay TV now on a solid profitable basis
    • 4.7 ARPU statistics
    • 4.8 Churn statistics
    • 4.9 Interactive advertising
    • 4.10 Infrastructure statistics
      • 4.10.1 Availability
      • 4.10.2 Infrastructure costings
  • 5. Radio
    • 5.1 Overview and statistics
      • 5.1.1 Market overview
      • 5.1.2 Market surveys
      • 5.1.3 Financial statistics
      • 5.1.4 Major players
      • 5.1.5 Digital media developments
    • 5.2 Digital radio
      • 5.2.1 Market overview
      • 5.2.2 Market analysis
      • 5.2.3 Market surveys
      • 5.2.4 Development path of digital radio
      • 5.2.5 Features and benefits of digital radio
      • 5.2.6 New and alternate delivery channels
      • 5.2.7 Technologies
  • 6. Glossary of Abbreviations
  • Table 1 – Television set penetration by number of sets – 2007
  • Table 2 – Advertising spending by media sector and annual change – 2006 - 2007
  • Table 3 – Advertising revenue share for commercial networks – January to June 2007
  • Table 4 – Australian entertainment & media market – ad spending by industry – 2006 - 2008; 2011
  • Table 5 – Australian entertainment & media market – advertising annual growth by industry – 2007 - 2008; 2011
  • Table 6 – Share of advertising revenue by industry sector – 2006; 2011
  • Table 7 – Australian commercial TV revenue and expenditure – 1992 - 2006
  • Table 8 – Advertising revenue for commercial networks – January to June 2007
  • Table 9 – Commercial television programming spending – 2005 - 2006
  • Table 10 – Number of television and radio licences on issue – 2004 - 2005
  • Table 11 – Number of television licences on issue (historical) – 1999; 2001 - 2004
  • Table 12 – ABC operating revenue, cost of services & annual change – 2006 - 2007
  • Table 13 – ABC revenue and annual change (historical) – 1998 - 2004
  • Table 14 – Nine Network revenue and annual change – 2003 - 2006
  • Table 15 – Digital TVs and integrated digital TV sets sold – 2003 - 2007*
  • Table 16 – Average monthly sales volume of digital TV receivers – 2005 - 2007*
  • Table 17 – Household penetration of digital TVs* – 2005 - 2009
  • Table 18 – Number of digital TV* households – 2001 - 2009
  • Table 19 – Percentage of DTTB capable TV display devices – 2005 - 2006
  • Table 20 – Penetration/incidence of digital media – 2005 - 2006
  • Table 21 – Penetration of DTTB by household demographic characteristics – October 2006
  • Table 22 – Digital media ownership/usage – DTTB adopters and non-adopters – October 2006
  • Table 23 – Digital media ownership/usage – digital TV and non digital TV – October 2006
  • Table 24 – DTTB adoption-intention segmentation – October 2006
  • Table 25 – Percentage of household use by application or platform – 2006
  • Table 26 – Frequency of device used for downloaded content – 2006
  • Table 27 – Main drivers for DTTB adoption – 2006
  • Table 28 – Is digital FTA TV available to households in your area?
  • Table 29 – Awareness of analogue switch-off – 2005 - 2006
  • Table 30 – DVR subscribers – total market – pay TV and FTA TV – 2006 - 2009
  • Table 31 – Percentage of digital pay TV subscribers – 2004 - 2007
  • Table 32 – Subscriber churn rate by customer category – 2006
  • Table 33 – EPG forecasts Australia – 2005; 2007; 2010; 2015
  • Table 34 – Forecast telecommunications services revenue by product – 2005; 2010; 2015
  • Table 35 – Pay TV subscribers by operator – 1995 - 2009
  • Table 36 – Pay TV subscribers annual change by operator – 1997 - 2009
  • Table 37 – Telstra pay TV bundling subscribers and annual change – 2006 - 2007
  • Table 38 – Pay TV household penetration – 1997 - 2009
  • Table 39 – Pay TV viewing versus FTA channel viewing – April 2007
  • Table 40 – Market share of pay TV viewing in pay TV households – 2006 - 2007
  • Table 41 – Forecast pay TV household penetration, lower market growth scenario – 2005 - 2011
  • Table 42 – Forecast pay TV household penetration, higher market growth scenario – 2005 - 2011
  • Table 43 – Pay TV revenue per operator – 1997 - 2009
  • Table 44 – Percentage change of pay TV revenue per operator – 1998 - 2009
  • Table 45 – Telstra pay TV bundling revenue and annual change – 2006 - 2007
  • Table 46 – Pay TV advertising revenue – 2000 - 2008
  • Table 47 – Net losses pay TV industry – 1996 - 2009
  • Table 48 – ARPU levels per operator Austar, Foxtel and Optus - 1999/2002; 2003 - 2008
  • Table 49 – Pay TV industry annual churn rates – 1996 - 2009
  • Table 50 – Subscriber churn rate – 2002 - 2007
  • Table 51 – Foxtel subscriber annual churn rate by customer category – 2006
  • Table 52 – Pay TV roll-out statistics (homes passed) – 1996 - 1998; 2002 - 2007
  • Table 53 – Radio ad revenue by city – nine months to 31 March 2007
  • Table 54 – Average time spent listening by radio users per week by device – November 2007
  • Table 55 – Number of commercial and government radio stations – 2007
  • Table 56 – Commercial radio penetration and time spent listening – Oct - Nov 2007
  • Table 57 – Time spent listening by capital city (excl Canberra, Hobart, Darwin) – Oct - Nov 2007
  • Table 58 – Audience penetration by time of day – Oct - Nov 2007
  • Table 59 – Radio listening by radio location – 2001 - 2007
  • Table 60 – Australian commercial radio financial results and annual profit change – 1992 - 2006
  • Table 61 – Number of commercial radio services by city
  • Table 62 – ABC radio regional reach and share – 2005 - 2006
  • Exhibit 1 – Commercial television licences – 2006
  • Exhibit 2 – Nine Network coverage
  • Exhibit 3 – Regional licence area plan update
  • Exhibit 4 – Community television licences – 2005
  • Exhibit 5 – Public television stations funding – 2003 - 2004
  • Exhibit 6 – Digital TV broadcasters by region – 2006
  • Exhibit 7 – Digital media reform – current rules and key proposed changes
  • Exhibit 8 – ACMA register of datacasting licensees – 2006
  • Exhibit 9 – New media activities from pay TV operators
  • Exhibit 10 – Pay TV roll-outs by state
  • Exhibit 11 – Estimated number of radios in the home
  • Exhibit 12 – Austereo national networks – 2006
  • Exhibit 13 – SBC/Fairfax media – key radio stations
  • Exhibit 14 – Timeline of music on the Internet

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Number of pages 145

Status Archived

Last updated 19 Mar 2008
Update History

Analyst: Stephen McNamara

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