Pay TV withstands downturn posting double-digital ad gain in 2012

by Marketing ON 11 March 2013

Subscription television (STV) continues to withstand the erosion of advertising dollars better than its free-to-air counterpart, according to figures released by the Australian Subscription Television and Radio Association (ASTRA).

Ad revenues for the pay TV sector increased by 12% year on year in 2012 to hit $439 million, according to figures compiled by Ernst & Young.

By comparison, ad sales among free-to-air TV networks stagnanted or declined, particularly towards the end of the year. In December financial booking data from media agencies compiled by Standard Media Index (SMI) show overall TV revenues down by 2.9%.

ASTRA CEO Petra Buchanan puts pay TV’s strong performance down to quality of content and innovation catering to multiscreening behaviour. “Strong quality content, like the London Olympics offered over eight channels and a commitment to provide popular US programs within hours of airing has drawn the attention of viewers and advertisers,” Buchanan says.

“Combined with new innovations that reflect consumer content consumption habits such as Foxtel Go, for the iPad, iPhone and iPod Touch, STV is at the forefront of entertainment.”

The second half of the year performed less strongly than the first, with net advertising revenues for the period 1 July to 31 December 2012 up by 7% to reach $228 million.

Free-to-air networks started 2013 with soft results. The total TV market posted a 4% increase in bookings, but was buoyed by a 9.2% increase for subscription TV, according to SMI.

Subscription TV now reaches over 7 million Australians weekly.

TV viewing: multi-platform devices aid, niche content dictates

by Petra Buchanan ON 7 March 2013

There has been a lot of discussion about audiences becoming increasingly adept at using multiple platform devices to consume TV content. In a market where 78% of households have internet access, 56% have smartphones, 22% own tablets and 18% have internet-connected TVs, the engagement with iPads, tablets and next-gen phones isn’t surprising.

What is interesting is that contrary to early premonitions, recent reports are confirming what subscription TV has been forecasting from a while: multiple screens will enhance audience engagement with TV and viewing on multi-screens will not divest audiences from viewing on the main TV screen. When it comes to entertainment, we must remember that technology is a means to an end and not the result in itself. As evidenced by consumer behaviour, people are seeking out content that engages and entertains. Advances in mobile technology and new entertainment ecosystems in our homes are working in favour of the TV industry, as it provides people access to content when and how they want it. And why wouldn’t consumers want more with HD programming, multi-screen and multi-platform interactive content, time-shifted viewing, PVRs and Smart TV technology? The premise of consumer engagement has and always will be quality and relevant content that entertains.

According to a recent ASTRA survey (conducted by AUSPOLL), people viewing TV programs on iPads and tablets, has increased to 33%, from 15% last year, while TV viewership at home dominates the main screen (93%, OzTAM). One of the main reasons for this increase is that multichannel television is built on variety and a depth of niche programming, offering choice for targeted audiences and providing content they love.

As audiences actively engage with TV content via social media and multiple devices, their choices will become increasingly niche. Social media is shaping the kind of content we view and platforms such as Pinterest, blogs and Facebook are harnessing these differences and niche audiences by creating local communities. Why should TV be any different? Content will become increasingly fragmented to reflect consumer tastes and interests. This is in turn creating a snow ball effect on marketing, creative and talent communities.

It may be sport, movies, documentaries, children’s or cultural programming, but what is universal is the viewer’s passion. It is in response to this passion that subscription TV offers the best TV content available, from around the world and here at home. The subscription TV industry invested $667 million last financial year in the production of original Australian content such as Tim Winton’s Cloudstreet, Grand Designs Australia, Camp Orange, Kings Cross ER, Killing Time and Australia’s Great Flood – an increase of 13% – confirming that Australians’ appetite for good quality TV hasn’t waned.

But, good content that resonates with audiences can only come from knowing what consumers want and following their attitudes and behaviours. As ASTRA 2013 Conference speaker Colleen Fahey Rush, executive vice president and chief research officer at Viacom Media Networks, recently said: “The future will bring even more appetite to personalise and expand the relationship fans have with their favourite shows. And we’ll keep listening to them to build those relationships. That’s where it all starts – by knowing our audiences inside and out – kids, guys, millennials, adultsters, boomers, moms. Our consumer insights drive everything we do – the programs we make, the tone we take and the experiences we create.”

Petra Buchanan and ASTRA will be holding the ASTRA 2013 Conference next week, taking place on 14 March at the Sydney Convention & Exhibition Centre and, under the theme of ‘Enhanced Entertainment’, will draw together international speakers and local experts to cover a thought provoking range of topics.

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zeebox first social TV app to cover Foxtel channels

by Marketing ON 7 March 2013

Social TV app zeebox has teamed with Foxtel to bring the pay TV provider’s content into its interface.

The ‘companion app’ will integrate Foxtel content into its current platform making second screen experiences available from today for many of Foxtel’s channels.

Foxtel will also launch an enhanced version of its Foxtel TV Guide which brings zeebox powered features into the app later this year.

Foxtel’s general manager of emerging platforms, Kym Niblock says multi screening has quickly become the new normal for today’s media savvy, connected viewers. “Our agreement with zeebox recognises this and brings together our successful TV Guide App with the social and content features customers expect when interacting with their favourite brands and channels.

“We’re excited… and look forward to bringing many more devices and features online in 2013.”

zeebox hopes to become the the standard for universal social TV apps, Australian CEO of the company, Craig Blair says. “We are delighted that Foxtel is embracing our open industry model and look forward to announcing more Channel partnership agreements in the coming months.”

zeebox was adopted quickly after launching in Australia in November 2012, capturing 100,000 downloads in the first two weeks. The app enables consumers to get more information on their favourite shows, connect with friends and celebrities and buy the products seen on TV.

Foxtel has two apps – its TV Guide App and the Foxtel Go App, which lets customers watch live Foxtel channels and catch up TV on compatible iPad and iPhone as part of their subscription.

zeebox will become the first second screen app in Australia to include key Foxtel channels in its line-up, with more channels to be added throughout the coming monts. The app will let users remote control and remote record their favourite shows using the zeebox app on Foxtel iQ set-top boxes.

Advertisers will also be able to engage second screen audiences on Foxtel channels. Through ‘Spot Synch’, advertisers can engage viewers with second screen experiences synchronised real time with their TV ads.

Foxtel launches live and catch-up TV app

by Marketing ON 7 November 2012

Foxtel has launched its new iPad app making 21 of its channels available for subscribers to watch on the go.

‘Foxtel Go’ is now available for download from Apple’s App Store, signalling the pay-TV network’s first major effort to adapt to multi-screen viewing behaviour. Users will be able to watch shows live, catch up on programs they’ve missed, check the program guide and set recordings remotely from an iPad.

The channels added to the service so far include The LifeStyle Channel, A&E, Sky News, National Geographic, Discovery, Disney, Cartoon Network, Channel [V], and Cbeebies.

Foxtel CEO Richard Freudenstein says, “The TV landscape has changed, viewers are not just watching TV in the living room they’re watching TV on the way to work, at the beach or in another room of the house.

“Foxtel Go is the biggest thing we’ve launched since digital and iQ. It lets customers take their entertainment with them on the go, and as the app is included with a customer’s subscription, it’s a fantastic value proposition.”

Foxtel turns tables on pirates with ‘express access’ US TV deal with HBO

by Marketing ON 25 October 2012

Foxtel has signed a deal with US TV giant HBO to bring popular series like True Blood to Australian screens within hours of them airing in the US, according to a report in The Australian.

The landmark deal will lock free-to-air networks out of HBO’s catalogue of acclaimed programming and reduce the impetus for piracy by making the content available before it is available to download illegally. Currently Australian audiences wait up to a year before US shows are aired on local television, fuelling widespread piracy of popular programming.

“It’s a long-term deal and we get all first-run HBO programming on Foxtel,” chief executive of the pay-TV network, Richard Freudenstein, told The Australian.

“You won’t see programs like Boardwalk Empire end up on SBS in a couple of years. It removes their ability to sell in a second window to free-to-air television. That won’t happen any more. You won’t see those programs on free-to-air.

“When we talk about express from the US we mean it very, very seriously. We’re going to be putting things to screen often within hours or 24 hours after their first screening in the US. We think that’s a service our customers deserve and we also think that it will continue to attack piracy, which is a big issue in this country.”

The deal will make HBO’s programming, including recent hits Game of Thrones, Girls, True Blood, and Veep, available in high definition, a further benefit over pirated versions.

The pay-TV operator will also launch ‘Foxtel Go’ next month, an iPad app offering subscribers 21 channels free of charge, making a raft of content including HBO’s available on demand via mobile device. “We’ve got all the rights we want for catch-up TV, tablet and IPTV [internet via television] free on demand to customers,” Freudenstein commented.

HBO content will premiere on Foxtel’s premium drama channel Showcase, which will be marketed as the ‘home of HBO’. Subscribers will also be able to watch a library of classic shows such as The Sopranos and Six Feet Under.

Foxtel aims to increase its penetration in Australian households from about 34% to 50% by 2017.

Boardwalk Empire image copyright HBO

ACCC gives OK to Foxtel-Austar merger, businesses to combine

by Marketing ON 10 April 2012

Foxtel is free to proceed with its takeover of pay television rival Austar after the Australian Competition and Consumer Commission (ACCC) announced today it will not oppose the proposed acquisition. But on a few conditions.

The ACCC was primarily concerned with the developing IPTV field, and how competition in that field would be affected by the combining of the two main pay TV providers in the national market into one entity under the Foxtel brand name.

The ACCC accepted Foxtel’s undertakings relating to the acquisition of exclusive content, as well as the mobile rights to these. This means Foxtel will not be able to obtain exclusive rights to any of the channels it currently provides, or any channels it may provide in the eight years covered by the undertaking.

Of additional concern to the ACCC was Telstra’s 50% ownership of Foxtel and the access the telco would gain to regional voice, broadband and IPTV customers.

“The proposed acquisition would bring together the two main subscription TV industry players in Australia each with a substantial customer base and significant access to key content. This would in turn give Telstra, Foxtel’s largest shareholder, greater market power in regional fixed broadband and telephony markets,” ACCC chairman Rod Sims says.

“By reducing content exclusivity, the undertakings will lower barriers to entry and promote new and effective competition in metropolitan and regional telecommunications and subscription television markets.”

“Taking into account the undertaking which has been offered by Foxtel, the ACCC is satisfied that the proposed acquisition is unlikely to substantially lessen competition.” Mr Sims said.

A statement from Foxtel chief executive, Richard Freudenstein, says, “This is a great outcome for consumers because we will now be able to create a company of scale that will deliver innovative new digital products and services, and parity for regional and city customers.”

The undertakings proposed by Foxtel and accepted by the ACCC include:

Non-exclusivity over a broad range of channels,
Non-exclusivity over video-on-demand movie rights,
Non-exclusivity over movies supplied by major studios and key independents, and
Signal access to facilitate IPTV delivery by third parties.

Google sets sights on pay TV

by Marketing ON 24 February 2012

Not content with its success in online video, Google has applied for a video franchise license to launch a TV service in the US, according to a report from the Wall Street Journal.

The search giant applied last week to provide a pay TV-like service to residents of Kansas City, featuring access to live TV, on-demand content and online access to TV channels.

The service, which could be live in as soon as a month, is being described as a trial of plans the company has to unlock a new, subscriber-based revenue stream.

A ‘media executive currently involved in negotiations to license channels to the service’ told the Journal that Google plans to look beyond the Kansas City market and into other areas where high-speed fibre-optic internet services operate.

In March last year, Google announced plans to introduce its own high-speed internet service in Kansas City that promises to be up to 100 times faster than the average internet connection – an astounding 1 GB per second. The service would allow Google to bundle pay TV and ISP services to people in the area, enabling them to control the pipeline.

The new internet service sparked a wave of interest last year and campaigns from dozens of cities in an attempt to persuade Google to bring its high-speed network to their area.

Google also revealed intentions to introduce a pay TV service in November last year, according to the Journal, which reported the web king spoke to Disney, Time Warner and Discovery Communications about providing content for its fibre-optic based video service.

Image credit: dailylifeofmojo.

Subscription TV advertising revenue up 3.75%

by Marketing ON 16 February 2012

Subscription TV ad revenue grew by almost 4% in the second half of last year, driven by interactive programming according to the Australian Subscription Television and Radio Association (ASTRA).

Compiled by Ernst & Young, the report found net advertising revenue of $213 million for the period 1 July to 31 December 2011, with ad revenue for the full calendar year from January to December 2011 at $393 million.

In comparison, free TV raked in $3.6 billion in ad spend during 2011, according to figures from the Interactive Advertising Bureau.

ASTRA’s CEO Petra Buchanan says subscription TV enables advertisers to target relevant audiences and deliver engaging communication via interactive tools.

“Greater premium quality content and a strong commitment to innovation enable STV to continue to satisfy consumer demand and evolve with viewing habits,” Buchanan says.

“Despite current economic conditions and continued caution in the market, the STV industry continues to attract increased advertising expenditure, up 3.75% from 2010 to 2011.”

Subscription TV reaches over seven million people on a weekly basis, with 200 genre specific channels ranging from documentary to lifestyle to sport.

FOXTEL subscription revenue increased 5.1% revenues for the six months to 31 December 2011 “reflecting solid improvements in the take-up of FOXTEL products by FOXTEL customers including FOXTEL’s iQ, multiroom and high definition digital offerings”, according an announcement.

The pay TV provider’s direct subscriber base now totals 1.58 million households.

Australian rules is Australias choice

by Marketing ON 15 November 2010

The Australian Football League’s (AFL) huge broadcast rights deals have been proven worthy, with the league streaking ahead of competitors as Australia’s choice of sporting code to watch on television.

In a study released by Roy Morgan Research, Football, in almost all its forms was found to be the big winner.

AFL remains the code with the highest total number of viewers with 36.6% of Australians (estimated at 6.6 million) who will watch games “always” or “occasionally.”

The NRL State of Origin, a short showcase series between Queensland and New South Wales representative players, was the second most watched sporting series, with an impressive showing of loyal viewers, with around 3.6 million Australians ‘almost always’ tuning in.

The Super 14 and A-League have also found a solid audience on pay TV with 8.2% (estimated at 1.5 million) watching Super 14 and 7.8% (estimated at 1.4 million) watching A-League, although their audience is less loyal with a higher ratio of ‘occasional’ viewers at 5.0% and 5.1% respectively.

“Sport has always been a key program area for both FTA and pay TV, with the major football codes delivering the large audiences and marketing synergies that advertisers want,” Roy Morgan Research’s media director Michael Duncan said.

“With the telecast rights for AFL and NRL both up for negotiation soon, all television operators will undoubtedly compete vigorously for these valuable rights.

Duncan tells Marketing magazine the sample size was made up of close to 19 000 respondents aged 14 and over, and data came from face-to-face interviews and surveying.

Freeview reaches 5 million with TVC

by Marketing ON 13 April 2010

Freeview has launched a new TVC in its ‘More for me’ campaign, advising viewers that they shouldn’t have to pay for TV.

The campaign, launched during a prime time evening ‘roadblock’ in metropolitan TV markets, reached a combined audience of 5,430,534 viewers across the Sydney, Melbourne, Brisbane, Adelaide and Perth metropolitan markets and regional areas, according to figures from OzTAM.

Freeview’s latest TV push in metro markets builds on the ‘More for Me’ campaign theme, which concluded in February, by focusing on the no fees or monthly subscriptions that comes across 16 free-to-view digital channels.

“The latest phase of our TV campaign is a call to viewers to let them know that Freeview gives them more first-run, quality TV than ever before, across every program genre from sport to comedy and entertainment, from drama to news,” Freeview CEO Robin Parkes said.

Freeview heralds win over pay TV

by Marketing ON 14 January 2010

Freeview has announced that free-to-air television viewing in Australia surged in the latter part of 2009 as a result of new digital channels launched on its platform.

It took a swipe at the pay TV sector, indicated that it posted a fall in viewing levels in the final months of last year.

In weeks 36 to 52 of 2009, OzTAM figures revealed that free-to-air TV viewing increased by 2.2% compared with the same period in 2008.

Over the same weeks last year, pay TV viewing declined by 4.4%, compared with 2008.

Freeview said that the figures are proof that Australian viewers more enthusiastic about free-to-air TV, largely due to the launch of digital channels by all the free-to-air networks.

“The launch of all these new digital channels, under the Freeview brand name, has produced very real growth in terms of overall viewing of free-to-air TV, while we’ve seen pay TV viewing figures decline at the same time,” said Freeview CEO Robin Parkes.

“These figures are also great news for advertisers on free-to-air TV as they reap the benefits of higher viewing figures. Freeview is all about more for free for the Australian viewer, and this year we’ll be putting even more weight behind that promise.”

Ad rates for TV on the way up

by Marketing ON 16 October 2009

Advertisers have been warned to expect increased media inflation in 2010 from free-to-air TV networks as they aim to recoup the heavily discounted deals they struck in early 2009.

According to a report that appeared in Businessday.com.au, Foxtel and Austar’s advertising sales unit, MCN, attempted to ambush its free-to-air rivals with an early start to making deals before the 2010 annual TV rate negotiations this week.

This week will see much of the $2.7 billion in metropolitan TV advertising allocated to TV stations for the next year.

“Media inflation is going to be a very significant issue for most advertisers next year. Demand is starting to pick up and naturally the free-to-air networks drive their prices up. The key driver, though, is the networks lowered their [advertising rate] baseline massively and advertisers got some tremendous deals – negative 10% in many cases,” said MCN chief executive Anthony Fitzgerald.

Pay TV has been under pressure in recent months because of concerns about how its audiences and revenues will hold up as new digital channels are launched by free-to-air broadcasters in time for the 2010 deal-making season.