Australia - FTA broadcasting versus subscription TV versus IPTV and the battle for supremacy

Thursday, March 28, 2013



As the television broadcasting industry moves towards 100% digital signal saturation the industry is coming to the crossroads where the viewing audience and their choices will determine the course. By end-2013 the digital TV signals will have become the norm as analogue TV broadcasting ceases. The subscription TV (STV) has had both satellite and cabled networks in digital for some time. The final bastion of the analogue transmission spectrum may remain in use for many decades before we hear finally digital radio across all of Australia.

Currently at the television crossroads, we see big TV and its traditional FTA viewing mediums incurring greater debts and losses in market capitalisation as big TV is driven by market share reporting. Nevertheless the FTA industry is working hard not to be left behind and is to moving into the digital media arena. Catchup TV is gaining greater accessibility for viewers on the move, using WiFi and the mobile networks to retain viewers.

Interactive TV (iTV) is slowly getting a push by the FTA broadcasters as they use social media platforms to gain viewer interactivity, feedback and thereby the ability to target ads to these interactive users. However, concerns still remain about the emergence of a sustainable revenue model and the current lack of unified technical platforms, but using the web and apps may provide a solution using the Social TV platform.

The biggest pay TV operator, FOXTEL, has been at the crossroads for some years now and seems to have stalled as household penetration languishes. In 2012 we saw the merger of AUSTAR into FOXTEL and since that time its revenue has risen on a year-on-year basis. By 2013 pay TV household penetration continues to fall and BuddeComm sees is unlikely to reach 30% for a number of years if the current STV practices continue.

BuddeComm believes that aiming STV services that are affordable will eventually see the subscribers come. Up until now, the traditional IPTV products by ISPs have failed to attract large user bases – in 2013 there are now only some 65 million users globally, and some 300,000 of these are in Australia. But the uptake of services through IPTV services such as FetchTV is starting to see an increase in numbers.

We are seeing correlation between the availability of high-speed broadband and IPTV usage and it is envisaged that a FttH-based NBN will drive new IPTV developments. The current IPTV models will need to be changed with the increased penetration of smart TVs. The rapid growth of smartphones and tablets is also giving this market a boost, as well as new business models such as pay-per-view. New IPTV services are already being streamed over these devices, as well as over gaming devices.
Advertising expenditure in Australia in the radio, FTA and STV markets is continuing to increase overall as is the expenditure by the businesses and consumers in this marketplace. However advertising spend in the radio sector radio decreased overall in 2012 but is expected to remain steady into 2013. The STV spend of advertising has been increasing, as the ad market sees these viewers having a greater disposable income.

Digital radio operates in the five capitals around Australia and with trial extension granted in Canberra and Darwin until July 2013. Digital radio listeners continue to increase by around 30% on a year-on-year basis while time spent listening to DAB and streaming internet radio also increase. Digital radio equipment sales and greater choice of availability for the home is also seeing more vehicle manufacturers entering the market.


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