2011 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 (iTV).

Overviews of major players in the market including:

  • Public, Commercial and Community FTA TV broadcasters;
  • Foxtel;
  • Austar;
  • Austereo;
  • Fairfax Radio;
  • Australian Radio Network.

Researcher:- Stephen McNamara
Current publication date:- March 2011 (12th Edition)
Next publication date:- March 2012

Executive Summary

Digital services, online services are all expanding in the current climate

Under the banner of Freeview, the free-to-air television operators have delivered new digital channels in 2010/11 in both SD and HD. Viewer numbers are increasing and will continue to increase as the analogue transmission is switched off across Australia. Digital transmission first commenced back in 2001 and in 2011 celebrates ten years of operations with more Australians now enjoying the extra features and channels that are available. Their success is putting pressure on the pay TV industry.

The analogue switch-off that commenced in 2010 is progressing throughout Australia with the final signals to be turned off by end-2013. The formation of Freeview along with the expansion of the networks’ online and cross platform offerings are providing enriched viewing experience and also provide an opportunity for the subscription TV operators to gain leverage from customers wanting even more viewing and interaction.

By early 2011 total digital TV penetration had reached 75% across Australia and the remainder will have to switch over by 2013. A number of regions have now switched from analogue to digital, and of these regions most hit 100% household penetration leading up to the changeover with some users being assisted by the Household Assistance Scheme.

Meanwhile the pay TV companies, not wanting to be left behind, are putting in a concerted effort to maintain and grow subscribers, revenues and profits. The average revenue per user of both Austar and Foxtel has increased as they are driven by higher tier package uptake. Foxtel and Austar have served up to 30 new channels in a bid to attract FTA viewers to their subscriber bases.

Pay TV ARPU has continued to increase over the last couple of years with BuddeComm estimating further increases in 2011. Even further growth may be experienced in 2011 as Optus is set to resell the Foxtel HD services to its own customers after several years of not promoting the service and may even get more customers buying the PAY TV services through its satellite services. Telstra has indicated an interest in increasing its 50% share in Foxtel and with the potential money flowing in from the deal with NBN Co this is something to watch out for. However, Rupert Murdoch and Kerry Stokes have also previously indicated their interest in Foxtel.

There are more than 100 English-language television services or channels currently available to subscribers from the three major local subscription television operators. The operators also provide a selection of time-shifting, HD and digital channels. By 2011 the local pay TV providers – Foxtel, Optus TV and Austar have between them more than 2 million household subscribers to pay TV broadcasting services in Australia. By early 2011 pay TV penetration had reached about 32-34% across the Australian landscape. This is still well below penetration rates for similar services in other parts of the world.

With several TV manufactures including Samsung, Sony and LG launching models that have Internet connectivity and inbuilt EPGs, IPTV services may take off when broadband download limits and speeds increase as the National Broadband Network rolls out fibre across the continent. Other offerings launched in 2010 include Telstra with its T-Box and FetchTV offering IPTV through ISPs including Adam Internet, iiNet and internode aiming squarely at drawing viewers away from the pay-TV companies of Austar, Foxtel and Optus. While the future of IPTV looks bright, in particular over high-speed broadband networks such as the NBN, the current IPTV offerings are severely hampered by the incompatible standards of the set-top boxes used by the above mentioned operators.

In the digital economy growth has been exponential with online advertisements in Australia growing by 21% year-on-year in 2010, double the previous growth in 2009. Also unabated by the current nervous economic environment, online ad sales increased from $1.9billion in 2009 to just under $2.3billion in 2010. The prospect for even higher growth is set to continue into 2011/12.

Online selling increased during 2010 with some of the bigger players reporting profit increases of more than 40%. However, for online selling company eBay, sales only increased by just 5% but online payments increased by more than 20%, with PayPal being the market leader here.

The increased use of video advertising grew immensely as the increase in broadband availability has seen advertisers continue to experiment with new formats. Into 2011, we will see an increased use of targeted advertising delivered over the Internet as millions of users watch millions of online videos monthly.

Digital radio operates in the five capitals around Australia with the trials in Canberra and Darwin still continuing in 2011. Although its advertising base is growing, the radio market is losing share to other media sectors. While radio is still available over AM and FM frequencies, and almost three-quarters of all radio is commercially operated, new technology including Digital Radio, podcasting and converged multi-media technologies are offering new revenue opportunities and challenges.

All eyes will be on the media reform policies that will be discussed during 2011 and do have the potential to shake up the industry. The recent changes to media ownership and broadcasting regulations in Australia are starting to lead to market consolidation. In 2011 we are seeing takeovers starting to eventuate as the Austereo stations are preparing to be taken over by Southern Cross Media. The major commercial radio broadcasters that are covered in the publication include – Austereo, the Australian Radio Network, Fairfax Media, Southern Cross Media, DMG Radio Australia and Macquarie Radio Network.

Market highlights:

  • In 2009-2011, the ABC, Seven, Nine and Ten have all launched free-to-view digital channels on the Freeview platform with the latest being the launch of digital channel eleven in January 2011 by the Ten network.
  • Over the next five years, digital technologies are set to spread across all segments of the entertainment industry and media as the digital migrations continue to expand.
  • In 2010/11 Free TV in Australia continued to launch more channels which are attempting to target niche market groups. The free-to-air networks are expected to see intense competition for viewers and advertising continue through 2011 and beyond, which will impact on their cost margins as they are forced to put even more money into programs, cross promotion and marketing.
  • Estimated ARPU statistics and Pay TV revenue forecasts to year end 2011.
  • PVRs achieved double digit growth in 2010.
  • The Government is providing $375 million over 12 years to fund the new digital television satellite service.
  • By early 2011 over 75% of households had converted to digital TV.
  • By late 2013 all analogue transmissions are to cease.
  • Expenditure on online advertisements in Australia grew 21% year-on-year.
  • Australia’s online search advertising market achieved a 13% increase during 2009/10, with both revenues per ad and the amount of search ads served continuing to rise.

Key performance indicators of the broadcasting, pay TV and online markets – 2010

Category

2010

Pay TV subscribers (million)

2.5

Online advertising revenue (million)

$2.3

Digital radio listeners (million)

0.6

iView vodcasts downloaded (million)

12.4

Homes with one TV set only

42%

(Source: BuddeComm, based on various industry figures and estimates)

Table of Contents

  • 1. Free-to-Air TV
    • 1.1 Market overview and statistics
      • 1.1.1 Market update
      • 1.1.2 Trends and analysis
      • 1.1.3 Market statistics and revenue
      • 1.1.4 Drama spending and production
    • 1.2 Broadcasters
      • 1.2.1 Market overview
      • 1.2.2 National broadcasters
      • 1.2.3 Regional broadcasting
      • 1.2.4 Community television broadcasting services
      • 1.2.5 Indigenous broadcasters
  • 2. Pay TV
    • 2.1 Overview and analysis
      • 2.1.1 Market statistics
      • 2.1.2 Industry and market analysis
      • 2.1.3 Major players – overview and major developments
      • 2.1.4 Forecasts – Pay TV penetration – 2010 - 2015
    • 2.2 Industry revenues and analysis
      • 2.2.1 Market analysis
      • 2.2.2 Revenue statistics
      • 2.2.3 Statistics
      • 2.2.4 Infrastructure statistics
  • 3. Digital TV
    • 3.1 Market overview and statistics
      • 3.1.1 Market trends, developments and analysis
      • 3.1.2 Statistics
      • 3.1.3 Market surveys
    • 3.2 Digital video recorders
      • 3.2.1 Introduction
      • 3.2.2 Subscriber statistics
      • 3.2.3 Market analysis
      • 3.2.4 Key players and products
      • 3.2.5 DVRs and advertising
    • 3.3 Interactive TV, IPTV and EPGs
      • 3.3.1 Interactive TV (iTV)
      • 3.3.2 IPTV and video-on-demand (VoD)
      • 3.3.3 Electronic Program Guides (EPGs)
  • 4. Digital Media
    • 4.1 Industry overview
      • 4.1.1 The traditional media industry
      • 4.1.2 New business models for digital media
      • 4.1.3 Digital media regulation
      • 4.1.4 Free-to-Air TV broadcasters
      • 4.1.5 Newspaper Publishers - Analysis
      • 4.1.6 News Corp and subsidiaries
      • 4.1.7 Fairfax Digital
    • 4.2 Advertising, Statistics, Revenues and Forecasts
      • 4.2.1 Digital economy – Internet income
      • 4.2.2 The online advertising market
      • 4.2.3 Mobile Internet advertising
      • 4.2.4 Generation Y is driving the online media push
      • 4.2.5 Revenue statistics
      • 4.2.6 Online classified advertising
      • 4.2.7 Online video advertising market
      • 4.2.8 Website usage statistics
      • 4.2.9 Market surveys
  • 5. Radio
    • 5.1 Overview and statistics
      • 5.1.1 Market overview
      • 5.1.2 Major players
      • 5.1.3 Digital media developments
      • 5.1.4 Brief history of radio broadcasting
    • 5.2 Digital radio
      • 5.2.1 Market overview
      • 5.2.2 Market analysis
  • 6. Glossary of Abbreviations
  • Table 1 – Television set penetration by number of sets – 2008; 2010
  • Table 2 – FTA audience viewing by network and annual change – 2009 - 2010
  • Table 3 – Pay TV viewing versus FTA channel viewing – 2009 - 2010
  • Table 4 – Advertising revenue share for commercial networks – 2009 - 2010
  • Table 5 – Percentage shares of capital city TV ad market – 1998 - 2010
  • Table 6 – Advertising spending by media sector – June 2009
  • Table 7 – Australian advertising spend in Pay TV and FTA sectors – 2010; 2014
  • Table 8 – Australian advertising spend by industry – 2010; 2014
  • Table 9 – Australian advertising production – 2007 - 2009
  • Table 10 – Australian content between 0600-2400 – 2007 - 2009
  • Table 11 – Number of television and radio licences on issue – 2009 - 2010
  • Table 12 – Pay TV subscribers – annual change by major operator – 1997 - 2011
  • Table 13 – Market share of top five pay TV viewing categories – 2010
  • Table 14 – Market share of pay TV viewing in pay TV households – 2006 - 2011
  • Table 15 – Pay TV viewing versus Free-to-Air (FTA) channel viewing – 2008 - 2010
  • Table 16 – Percentage change of pay TV revenue by major operator – 1998 - 2011
  • Table 17 – Net losses pay TV industry – 1996 - 2010
  • Table 18 – Pay TV industry annual churn rates – 1996 - 2011
  • Table 19 – Pay TV rollout statistics (homes passed) – 1996 - 1998; 2002 - 2008
  • Table 20 – Household conversion to digital TV – 2009 - 2010
  • Table 21 – Percentage of digital TV households by region – 2009 - 2010
  • Table 22 – Total plasma, LCD digital TV sales and annual change – 2003 - 2010
  • Table 23 – Media centre penetration forecasts – Australia – 2005; 2007; 2010; 2015
  • Table 24 – Estimated DVR subscribers – total market – pay TV and FTA TV – 2006 - 2010
  • Table 25 – Market shares of key online advertising markets – 2008 - 2011
  • Table 26 – Nielsen Online top Australian websites by unique audience – 2009 - 2010
  • Table 27 – Top ten Australian websites by unique audience – 2009 - 2011
  • Table 28 – Social networking in the workplace – 2009 - 2010
  • Table 29 – Australian entertainment and media market – revenue by industry – 2007 - 2012
  • Table 30 – Australian entertainment and media market – annual growth by industry – 2008 - 2012
  • Table 31 – Australian consumer/end-user spending – 2007 - 2012
  • Table 32 – Australian consumer/end-user spending – annual growth by industry – 2008 - 2012
  • Table 33 – Australian advertising spending – 2007 - 2012
  • Table 34 – Australian advertising spending – annual growth by industry – 2008 - 2012
  • Table 35 – Australian entertainment and media market – revenue by industry – 2006 - 2008; 2011
  • Table 36 – Australian entertainment and media market – annual growth by industry – 2007 - 2008; 2011
  • Table 37 – Australian entertainment and media market – consumer/end user spending by industry – 2006 - 2008; 2011
  • Table 38 – Australian entertainment and media market – consumer/end user annual growth by industry – 2007 - 2008; 2011
  • Table 39 – Australian entertainment and media market – advertising spending by industry – 2006 -2008; 2011
  • Table 40 – Australian entertainment and media market – advertising annual growth by industry – 2007 - 2008; 2011
  • Table 41 – Share of consumer spending by industry sector – 2006; 2011
  • Table 42 – Share of advertising revenue by industry sector – 2006; 2011
  • Table 43 – Number of commercial and government radio stations
  • Table 44 – Number of commercial radio services by city
  • Table 45 – Estimated size of digital radio audience – 2009 - 2010
  • Chart 1 – Pay TV subscribers by major operator – 2000 - 2011
  • Chart 2 – Pay TV household penetration rate – 1997 - 2012
  • Chart 3 – Forecast pay TV household penetration – lower market growth scenario – 2010 - 2015
  • Chart 4 – Forecast pay TV household penetration – higher market growth scenario – 2010 - 2015
  • Chart 5 – Pay TV revenue by major operator – 2000 - 2011
  • Chart 6 – Pay TV advertising revenue – 2000 - 2013
  • Chart 7 – ARPU levels per operator – AUSTAR, Foxtel – 1999 - 2002; 2003 - 2011
  • Chart 8 – Plasma and LCD digital TV unit sales – 2003 - 2010
  • Chart 9 – Estimated DVR subscribers by major provider – 2006 - 2010
  • Chart 10 – Market share of DVD subscribers by major operator – 2010
  • Chart 11 – Business Internet income – 2007 - 2011
  • Chart 12 – Mobile online advertising revenue – 2008 - 2011
  • Chart 13 – Online advertising expenditure and forecasts – 1997 - 2015
  • Chart 14 – Online advertising expenditure in the email and video sector – 2009 - 2011
  • Chart 15 – Visitors to top news websites for election coverage – 2010
  • Chart 16 – Use of price comparison sites – 2010
  • Chart 17 – Use of social networking sites by demographic – 2008 - 2010
  • Chart 18 – Social networking trends among children – 2008 - 2010
  • Chart 19 – Paid search advertising revenue – 2005 - 2006; 2010
  • Chart 20 – Radio advertising revenue by metropolitan city – 2007 - 2011
  • Chart 21 – Estimated metropolitan radio listeners – 2007 - 2011
  • Exhibit 1 – Commercial television licences
  • Exhibit 2 – Nine Network coverage
  • Exhibit 3 – Digital community television licences – 2010 - 2011
  • Exhibit 4 – Background information on community television licences
  • Exhibit 5 – New media activities from pay TV operators
  • Exhibit 6 – Pay TV rollouts by state
  • Exhibit 7 – TiVo background information
  • Exhibit 8 – Free TV EPG background information
  • Exhibit 9 – Seven Network’s digital media strategies – 2006 - 2009
  • Exhibit 10 – Estimated number of radios in the home
  • Exhibit 11 – Austereo national networks
  • Exhibit 12 - DMG’s full list of radio stations:
  • Exhibit 13 – Timeline of music on the Internet – 1984 - 2010

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Licence Information

Annual Publication Profile

Technologies

Broadcasting
Regulations & Government Policies
Strategies & Analyses (Industry & Markets)

Number of pages 136

Status Archived

Last updated 1 Mar 2011
Update History

Analyst: Paul Budde

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