2014 Australia - Broadcasting - Pay TV, IPTV, Mobile 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:

  • Estimated ARPU statistics and Pay TV revenue forecasts to year-end 2014.
  • Subscription TV household penetration forecasts through to 2015 and 2020.
  • Analyses of market and industry trends and developments;
  • Regulatory and government policy developments;
  • Overviews of key market segments including:
    • IPTV;
    • Catch-up TV;
    • FTA and STV broadcasters;
    • Mobile TV;
    • Digital Radio.
  • Overviews of major players in the market including - Public, Commercial and Community FTA TV broadcasters, FOXTEL, ABC, SBS, Southern Cross Media Group, Ten, Nine Entertainment, Seven West Media, WIN TV, NBN TV, and the IPTV players including, Quickflix, Netflix, FetchTV, BBC iplayer, ABC iView, Telstra, FOXTEL, Getflix.

Researcher:- Paul Budde, Stephen McNamara
Current publication date:- May 2014 (15th Edition)

 

Executive Summary

Tablets and other smart devices clear winners in a fragmenting entertainment market

The broadcasting markets – FTA TV, STV, IPTV, Digital TV and Mobile TV have seen a number of changes over the last couple of years. Changes have included digitalisation of the Free-to-Air transmission frequencies, digital radio rollouts and continuing trials, increased availability of subscription TV, hotting up of the IPTV market and more TV viewing on mobile devices. As a result of this tightly contested market we have seen some lowering of access charges for some of the subscription-based services. Often the audiences are altering their viewing patterns using available technology some legal and some questionable, with apps as well as online access to suit lifestyles and their viewing preferences rather than what the industry prescribes them to do.

Also in 2014 the online advertising sector is gaining a further percentage of revenue and it overtook the revenues of the FTA industry. Many of the traditional TV companies are already struggling and will now need to move faster if they are to remain viable towards 2020 when the NBN rollout should see most Australians with fast broadband that allows full-streaming digital access. The broadcasters are now hoping that subscription video on demand (SVoD) content can bring back revenue to them as they try to convert their catch-up viewers to this paying model from the current free replay services that they also provide.

With subscription TV household penetration still languishing below 30%, we are seeing more content available over-the-top (OTT) through the IPTV service providers. Telstra, the largest, has more than 600,000 customers to its bundled Pay TV service. Other providers in the growing paid for IPTV market include FetchTV, Quickflix, EzyTV, FOXTEL’s Presto, while some overseas companies including Netflix are eagerly watching the market. In this publication BuddeComm provides updates and reports on this sector, but BuddeComm remains pessimistic about the current commercial IPTV business models.

BuddeComm sees the traditional IPTV model as making something of a comeback, as new services are launched over higher-speed broadband networks and the introduction of competitively priced triple-play models. However, we believe that digital rights constraints are making it impossible for the service to take a larger share of the entertainment content market. It is therefore free catch-up TV series rather than movies and sport that are driving the current developments. Movie content available – under the basic IPTV subscription - is mostly B- or C-rated; A rated material and new releases are only available at extra charges.

There is a correlation between the availability of high-speed broadband and IPTV usage and BuddeComm estimates that further increases in high-speed broadband penetration will drive new IPTV developments. The rapid growth of smartphones and tablets is also giving this market a boost, as well as new business models like pay-per-view. By far the largest growth in IPTV video entertainment comes from user-generated content services such as YouTube, Facebook and a whole new range of services of short, and even super-short, videos. Catch-up TV would be the second largest category and the ABC’s iView is the clear winner here.

We report on the increase in advertising spending on the mobile sector that has followed increased smartphone penetration among users, with smartphones and tablets becoming the primary device for many consumers. The increase in online advertising comes as Australian businesses expand their presence online and aim to see local sales win over from sales made offshore.

The addition of revenue streams from alternative ways of watching subscription TV such as IPTV is being watched from within the industry. The FTA broadcasters as well as the marketers and advertisers who also need a return on their investments are watching all the available content options. There are still many years for the standard TV market to have its monopoly-based content system available until the NBN becomes ubiquitous across Australia, when alternative digital streams become commonplace and ubiquitous, it is now the time to get higher penetration rates.

Watching mobile video from tablets, catch-up on PCs and other mobile devices requires more and more data bandwidth. Streamed programs on 3G or 4G are fast becoming data hogs on the mobile networks. As small data caps are normally the only available option due to pricing and availability, usage is somewhat limited in 2014/15 as a typical TV show uses around 500MB in a two hour session. But this does not deter many viewers with WiFi connectivity as the number one catch-up service, iView has more than 50% of its viewers using it on a mobile device.

Although its advertising base is growing, the radio market continues to lose share to other new media sectors. While radio is still available over AM and FM frequencies and almost three-quarters of all radio is commercially operated, other technology including digital radio, podcasting and converged multi-media technologies are offering new revenue opportunities, threats and challenges. In this annual publication we provide an overview many of the major commercial radio broadcasters including the ARN, Southern Cross Media, Nova, MRN, Fairfax Media, Super Radio and Grant Broadcasters. These radio networks have established metropolitan and regional footprints through aggregation and together account for around 75% of the market with millions of listeners tuning in every day.

Market highlights:

  • Uptake of IPTV subscribers increasing, with increased competition expected.
  • Online advertising revenue now exceeds that of the FTA industry.
  • Mobile advertising sees its market increasing as the market matures.
  • Radio listening audience increasing in both analogue and digital formats.Revenue from subscribers to Pay TV slows in 2014, yet subscriber numbers increasing.
  • In 2014 smart TV unit sales are increasing with further availability, but still below 40% market share.

Companies covered in this report:

FOXTEL, ABC, SBS, Southern Cross Media Group, Ten, Nine Entertainment, Seven West Media, WIN TV, NBN TV, and the IPTV players including, Quickflix, Netflix, FetchTV, BBC iplayer, ABC iView, Telstra, FOXTEL, Getflix.

Data in this report is the latest available at the time of preparation and may not include the current year. 

Table of Contents

  • 1. The Broadcasting Market in 2014
    • 1.1 The broadcasting industry towards 2015
      • 1.1.1 Disruptive content is heating up the competition
      • 1.1.2 International competition needs infrastructure
      • 1.1.3 Free-to-air TV still going strong
      • 1.1.4 SVoD content coming from the FTA broadcasters
      • 1.1.5 Fast-forward, re-wind, catch-up all aim to deliver content
      • 1.1.6 Customers moving to IPTV media delivery
      • 1.1.7 Digital TV moved to 100% penetration
      • 1.1.8 Restacking the digital channel spectrum
      • 1.1.9 Budget cuts to the ABC and SBS
      • 1.1.10 Digital radio
      • 1.1.11 Revenue trends in the media sector
  • 2. The Free-to-Air TV Industry
    • 2.1 Market Overview and Statistics
      • 2.1.1 Market update
      • 2.1.2 Trends and analysis
      • 2.1.3 Market statistics
      • 2.1.4 Drama spending and production
    • 2.2 Free-to-Air TV – Broadcasters
      • 2.2.1 Overview
      • 2.2.2 Commercial television broadcasting licences
      • 2.2.3 Permanent licence fee reductions
      • 2.2.4 Regional licence area plans
      • 2.2.5 Television aggregation
      • 2.2.6 National public broadcasters
      • 2.2.7 National commercial networks
      • 2.2.8 Major players in regional broadcasting
      • 2.2.9 Community television broadcasting services
      • 2.2.10 Indigenous broadcasters
    • 2.3 Digital TV – Market Overview and Statistics
      • 2.3.1 Digital TV broadcasters
      • 2.3.2 Market trends, developments and analysis
      • 2.3.3 Statistics
      • 2.3.4 Market surveys
  • 3. The Pay TV Market
    • 3.1 Statistics, Subscribers, Overview and Analysis
      • 3.1.1 Market statistics
      • 3.1.2 Industry and market analysis
      • 3.1.3 Major players – overview and major developments
      • 3.1.4 Forecasts – Pay TV penetration – 2012 - 2015; 2020
    • 3.2 Market Statistics and Industry Revenues
      • 3.2.1 Revenue statistics
      • 3.2.2 ARPU and churn Statistics
      • 3.2.3 Infrastructure statistics
    • 3.3 Foxtel
      • 3.3.1 Company information
      • 3.3.2 Company analysis
      • 3.3.3 Operational results
      • 3.3.4 Financial results
      • 3.3.5 Acquisitions, alliances and subsidiary companies
      • 3.3.6 Products and services
      • 3.3.7 Company history
  • 4. IPTV Market
    • 4.1 Market Overview
      • 4.1.1 Introduction
      • 4.1.2 Market Analysis
      • 4.1.3 Market surveys
      • 4.1.4 Optus and the copyright issue
      • 4.1.5 Regulations and standards
      • 4.1.6 IPTV versus IPTV+RF – an analysis
    • 4.2 Major Players
      • 4.2.1 Introduction
      • 4.2.2 AFLTV
      • 4.2.3 AARNet
      • 4.2.4 Australian Broadcasting Corporation (ABC)
      • 4.2.5 Apple TV
      • 4.2.6 BBC iPlayer
      • 4.2.7 FetchTV
      • 4.2.8 FOXTEL
      • 4.2.9 Free-to-Air TV stations
      • 4.2.10 Getflix
      • 4.2.11 Google TV
      • 4.2.12 Hoyts stream
      • 4.2.13 Hulu
      • 4.2.14 iiNet
      • 4.2.15 Netbay
      • 4.2.16 Ninemsn
      • 4.2.17 Optus TV
      • 4.2.18 Quickflix
      • 4.2.19 Special Broadcasting Service (SBS)
      • 4.2.20 Seven Network
      • 4.2.21 Tabcorp
      • 4.2.22 Telstra BigPond Media
      • 4.2.23 Ten Network
      • 4.2.24 TPG
      • 4.2.25 VOD Pty Ltd
      • 4.2.26 YouTube
      • 4.2.27 IPTV for remote mining sites
  • 5. Mobile TV
    • 5.1 What is mobile TV?
      • 5.1.1 On-demand mobile TV
      • 5.1.2 Broadcast mobile TV
    • 5.2 Market overview and analysis
      • 5.2.1 Smartphone market analysis
      • 5.2.2 Pursuing wrong business models
      • 5.2.3 Device and content-driven developments
      • 5.2.4 Key market – the youth segments
      • 5.2.5 Mobile Social TV
    • 5.3 Cloud-based mobile TV
      • 5.3.1 Background information
    • 5.4 Major players
      • 5.4.1 Overview
      • 5.4.2 VHA – Hutchison’s Planet 3 and Vodafone Central
      • 5.4.3 Telstra’s BigPond mobile TV
      • 5.4.4 Optus
    • 5.5 Regulation
      • 5.5.1 Spectrum for mobile broadcasting
    • 5.6 Technology platforms
      • 5.6.1 Multimedia Broadcast/Multicast Service (MBMS)
      • 5.6.2 Digital Video Broadcasting-Handheld (DVB-H)
  • 6. The Radio Market
    • 6.1 Overview and Statistics
      • 6.1.1 Market overview
      • 6.1.2 Major players
      • 6.1.3 Digital media developments
      • 6.1.4 Brief history of radio broadcasting
    • 6.2 Developments in Digital Radio
      • 6.2.1 Market overview
      • 6.2.2 Features and benefits of digital radio
      • 6.2.3 Market analysis
  • 7. Advertising, Statistics and Revenue Overview
    • 7.1 The online advertising market
      • 7.1.1 Online classified market is maturing
      • 7.1.2 Online expenditure – 2013
      • 7.1.3 Roy Morgan survey
      • 7.1.4 PriceWaterhouse predictions
      • 7.1.5 Advertising and revenue generation
    • 7.2 Mobile internet advertising
      • 7.2.1 Background
      • 7.2.2 Mobile advertising to mature
      • 7.2.3 Mobile devices increase growth in online video advertising
      • 7.2.4 Generation Y is driving the online media push
      • 7.2.5 Online advertising revenue statistics
    • 7.3 Other Market surveys
      • 7.3.1 Underinvestment in mobile advertising
      • 7.3.2 Insights into the world of Internet Marketeers
      • 7.3.3 Online advertising market grew 16% in 2013
      • 7.3.4 Australia leader in digital marketing
      • 7.3.5 Printed ads still gaining user attention
      • 7.3.6 Social media sites linked to advertising and buying patterns
      • 7.3.7 Business advertising to get traffic
      • 7.3.8 Business presence on social media
      • 7.3.9 Children, internet and social networks
      • 7.3.10 PricewaterhouseCoopers (PwC) Entertainment & Media Outlook report to 2016
      • 7.3.11 Search advertising revenues
      • 7.3.12 Different (digital) working arrangements
    • 7.4 Website usage statistics
      • 7.4.1 Top 10 Australian websites – 2010 - 2013
      • Table 1 – Australian advertising spend in broadcasting sectors – 2010; 2014; 2016
      • Table 2 – Television set penetration by number and type of sets – 2010 - 2013
      • Table 3 – Advertising revenue share for commercial networks – 2009 - 2013
      • Table 4 – Percentage shares of capital city TV advertising market – 1998 - 2013
      • Table 5 – Advertising revenue for FTA commercial networks – 2009 - 2013
      • Table 6 – Australian advertising spend in Pay TV and FTA sectors – 2010; 2014; 2016
      • Table 7 – Australian advertising spend by industry – 2010; 2014; 2016
      • Table 8 – Australian advertising production by network – 2007 - 2012
      • Table 9 – Australian content between 0600-2400 – 2008 - 2012
      • Table 10 – Number of television and radio licences on issue – 2010 - 2013
      • Table 11 – SBS key financial performance results – 2009 - 2013
      • Table 12 – Nine Entertainment key financial performance results – 2013 - 2014
      • Table 13 – Seven West key financial performance results overview –2012 - 2013
      • Table 14 – Seven West key financial performance results overview – H1 2012 - H1 2014
      • Table 15 – Ten key financial performance results overview – H1 2013 - H1 2014
      • Table 16 – PRIME key financial performance parameters overview – 2009 - 2013
      • Table 17 – PRIME key financial performance parameters overview – H1 2013 - H1 2014
      • Table 18 – Southern Cross Austereo key financial performance indicators – 2010 - 2014
      • Table 19 – Household conversion to digital TV – 2009 - 2014
      • Table 20 – Percentage of digital TV households by region – 2009 - 2013
      • Table 21 – Pay TV subscribers by major operator – 2008 - 2014
      • Table 22 – Pay TV subscribers by major operator (historic) – 2000 - 2007
      • Table 23 – Pay TV subscribers – annual change by major operator – 2008 - 2014
      • Table 24 – Pay TV subscribers – annual change by major operator (historic) – 1997 - 2007
      • Table 25 – Pay TV household penetration rates – 1997 - 2014
      • Table 26 – Forecast pay TV household penetration – lower market growth scenario – 2013 - 2015; 2020
      • Table 27 – Forecast pay TV household penetration – higher market growth scenario – 2013 - 2015; 2020
      • Table 28 – Pay TV revenue by major operator – 1997 - 2014
      • Table 29 – Percentage change of pay TV revenue by major operator – 1998 - 2014
      • Table 30 – Subscription TV advertising revenue and annual change – 2000 - 2014
      • Table 31 – Net losses pay TV industry (historic) – 1996 - 2010
      • Exhibit 15 – Pay TV finally became profitable – historic overview
      • Table 32 – ARPU levels per operator AUSTAR versus FOXTEL (historic) – 2003 - 2011
      • Table 33 – STV monthly ARPU – 2012 - 2014
      • Table 34 – Pay TV industry annual churn rates – 1996 - 2014
      • Table 35 – Pay TV rollout statistics (homes passed) (historic) – 1996 - 1998; 2002 - 2008
      • Table 36 – Total FOXTEL and wholesale subscribers – 2012 - 2014
      • Table 37 – FOXTEL and wholesale subscribers by annual change – 2012 - 2014
      • Table 38 – Subscriber annual churn rate – 2012 - 2014
      • Table 39 – Historic – FOXTEL and wholesale subscribers – 2002 - 2011
      • Table 40 – Historic – FOXTEL and wholesale subscribers by annual change – 2003 - 2011
      • Table 41 – Historic – subscriber annual churn rate – 2002 - 2011
      • Table 42 – Historic – FOXTEL subscribers by type – 2008 - 2011
      • Table 43 – Historic – FOXTEL subscribers by type – 2012
      • Table 44 – FOXTEL key financial performance snapshot – H1 2012 - H1 2014
      • Table 45 – FOXTEL key financial performance indicators snapshot – 2012 - 2013
      • Table 46 – Historical – FOXTEL key financial performance indicators – 2008 - 2012
      • Table 47 – Historical – FOXTEL yearly and monthly ARPU – 2003 - 2012
      • Table 48 – AUSTAR key operating and financial figures – 2009 - 2012
      • Table 49 – FOXTEL on-demand pricing – 2011 - 2014
      • Table 50 – Worldwide IPTV subscribers – 2010; 2012; 2014
      • Table 51 – Fetch TV subscribers 2012 - 2014
      • Table 52 – Hulu revenue – 2009- 2013
      • Table 53 - Telstra T-Box subscribers 2011-2014
      • Table 54 – Radio advertising revenue trends by metropolitan city – 2010 - 2014
      • Table 55 – Estimated metropolitan radio listeners and usage – 2009 - 2014
      • Table 56 – Number of commercial and government radio stations – 2014
      • Table 57 – Number of commercial radio services by city – 2014
      • Table 58 – ARN – key financial performance indicators – 2012 - 2013
      • Table 59 – Macquarie Radio Network key financial performance indicators – 2010 - 2014
      • Table 60 – Southern Cross Austereo key financial performance indicators – 2010 - 2014
      • Table 61 – Estimated size of digital radio listening audience – 2009 - 2014
      • Table 62 – Estimated sales of digital radios – 2009 - 2014
      • Table 63 – Funding of digital radio community radio – 2009 - 2016
      • Table 64 – General display industry categories market share - 2013
      • Table 65 – Estimated mobile device advertising in Australia – 2008 - 2015
      • Table 66 – Market shares of key online advertising markets – 2008 - 2012
      • Table 67 – Online advertising expenditure and forecasts – 2000 - 2015
      • Table 68 – Use of social networking sites by age group – 2008 - 2013
      • Table 69 – Use of social networking sites by demographic – 2008 - 2013
      • Table 70 – Australian entertainment and media market – revenue by industry – 2007 - 2012
      • Table 71 – Australian entertainment and media market – annual growth by industry – 2008 - 2012
      • Table 72 – Australian entertainment and media market –by industry share – 2007 - 2011
      • Table 73 – Australian entertainment and media market –by industry share – 2012 - 2016
      • Table 74 – Estimated online paid search advertising revenue – 2005 - 2006; 2010 - 2013
      • Table 75 – Top ten websites by unique Australian audiences – 2010 - 2013
      • Chart 1 – Overview of market shares in capital city TV advertising market – 2003 - 2013
      • Chart 2 – Overview of Australian advertising production by network – 2007 - 2012
      • Chart 3 – Overview of Australian content measurement between 0600-2400 – 2007 - 2012
      • Chart 4 – Overview of Prime share trending – 2012 - 2014
      • Chart 5 – Overview of Southern Cross Austereo key financial performance indicators – 2009 - 2014
      • Chart 6 – Overview of overall Australian household conversion to digital TV – 2009 - 2014
      • Chart 7 – Overview of pay TV subscribers by major operator – 2004 - 2014
      • Chart 8 – Overview of pay TV household penetration rate – 2008 - 2014
      • Chart 9 – Overview of forecast of pay TV household penetration – lower market growth scenario – 2010 - 2015; 2020
      • Chart 10 – Overview of forecast of pay TV household penetration – higher market growth scenario – 2010 - 2015; 2020
      • Chart 11 – Overview of pay TV revenue by major operator – 2004 - 2013
      • Chart 12 – Overview of subscription TV advertising revenue – 2004 - 2014
      • Chart 13 – Overview of STV ad revenue total revenue versus subscription revenue – 2004 - 2014
      • Chart 14 – Overview of ARPU levels – AUSTAR versus FOXTEL (historic) – 2003 - 2012
      • Chart 15 – Historical overview of FOXTEL iQ DVR subscribers and annual change – 2006 - 2012
      • Chart 16 – Historical overview of FOXTEL HD subscribers and annual change – 2008 - 2013
      • Chart 17 – Overview of FOXTEL financial performance indicators – H1 2012 - H1 2014
      • Chart 18 – Overview of FOXTEL financial performance indicators – 2012 - 2013
      • Chart 19 – Historical overview of FOXTEL revenue and annual change – 2003 - 2012
      • Chart 20 – Overview of radio advertising revenue trends by metropolitan city – 2007 - 2014
      • Chart 21 – Overview of estimated metropolitan radio listeners – 2007 - 2014
      • Chart 22 – Overview of Southern Cross Austereo key financial performance indicators – 2009 - 2014
      • Chart 23 – Overview of digital radio sales versus listeners – 2009 - 2014
      • Chart 24 – Overview of online advertising expenditure and forecasts – 2003 – 2015
      • Chart 25 – Overview of social networking use by age group – 2010 - 2013
      • Chart 26 – Overview of paid search advertising revenue – 2005 - 2006; 2010 - 2013
      • Exhibit 1 – Key performance indicators of the broadcasting, STV and IPTV markets – mid-2014
      • Exhibit 2 – Listing of major commercial television licences by Network ID
      • Exhibit 3 – Nine Network coverage
      • Exhibit 4 – Background information on PRIME and its former radio division
      • Exhibit 5 – Background information on PRIME New Zealand
      • Exhibit 6 – Brief background history on the Southern Cross Broadcasting company
      • Exhibit 7 – Digital community television licences – 2010 - 2013
      • Exhibit 8 – Background information on community television licences
      • Exhibit 9 – Overview of the analogue switch off to digital by regional and metropolitan area
      • Exhibit 10 – Many self-help retransmission sites cease
      • Exhibit 11 – Televisions, computers and their hazardous inventory of e-waste
      • Exhibit 12 – Overview of new media activities from pay TV operators – 2013
      • Exhibit 13 – The changing hands of FOXTEL ownership
      • Exhibit 14 – A brief overview of AUSTAR United Communications (AUSTAR) (historic)
      • Exhibit 16 – Pay TV rollouts by state
      • Exhibit 17 – FOXTEL at a glance – 2014
      • Exhibit 18 – AUSTAR brief company history – 1994 - 2012
      • Exhibit 19 – Case studies similar to the Optus copyright issue case
      • Exhibit 20 – Seven Network’s digital media strategies – 2006 - 2012
      • Exhibit 21 – Overview of the now defunct cloud- based mobile TV services
      • Exhibit 22 – Background information on the defunct Optus TV Now service
      • Exhibit 23 – Examples of Mobile TV technologies
      • Exhibit 24 – Broadcast Australia DVB-H trials – 2005 - 2009
      • Exhibit 25 – Estimated number of radios and listening habits
      • Exhibit 26 – Super Radio Network – listing of radio stations – 2014
      • Exhibit 27 – Nova at a glance – 2014
      • Exhibit 28 – NOVA’s full list of radio stations – 2014
      • Exhibit 29 – Grant Broadcasters listing of radio stations – 2014
      • Exhibit 30 – Austereo national networks
      • Exhibit 31 – Brief timeline of music on the internet – 1984 - 2014

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Number of pages 188

Status Archived

Last updated 28 May 2014
Update History

Analyst: Paul Budde

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