Free-to-air networks fight to stay relevant

Despite the fragmentation of audiences and blossoming of online services, commercial free-to-air broadcasters are likely to see a modest increase in advertising revenues.

Total ad spend is forecast to grow from $3.85 billion in 2013 to $4.13 billion in 2018, a compound annual growth rate (CAGR) of 1.4%, according to PwC’s Entertainment and Media Outlook 2014-2018.

“The advent of multiple channels, screens and devices is fragmenting the TV audience and splitting advertising budgets,“ the report says.

The pending abolition of the 75% reach rule and cross-media restrictions have encouraged consolidation talks between broadcasters, it notes.

Time-shifting now accounts for 7% of total time watching TV, while sport and reality TV continue to achieve the highest ratings.

Internet-protocol TV (IPTV), over-the-top operators and PVRs are enabling viewers to binge-view their favourite shows and skip through ads, the report notes.

The FTA networks claim they are at a disadvantage because IPTV providers do not need licences to operate in Australia and are exempt from local content legislation.

The Freeview Plus initiative, which aggregates their catch-up services and provides an enhanced electronic program guide, will allow broadcasters to deliver more content over additional channels.

“As long as the content provided changes with consumers’ moods and tastes, then the networks will continue to be relevant,” Magna Global MD Victor Corones told PwC.

That optimism is echoed by Network Ten chief brand officer Matt McGrath, who said, ““This is the golden age of TV with the best produced content that has ever been seen, and that’s what consumers want. “