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2007 Australia - Broadcasting and Pay TV

Publication Date April 2007
Publisher BuddeComm
Product Type Report
Pages 168
ISBN Number not applicable
Product Code BUD00043
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Summary

BuddeComm's 2007 Broadcasting and Pay TV Annual Publication, profiles key market sectors in Australia's Free-to-Air (FTA) TV, Digital TV, Pay TV and radio markets. It provides revenue and subscriber statistics as well comprehensive market overviews in areas such as Personal Video Recorders (PVRs), digital radio, Interactive TV, Set-top Boxes and datacasting.

The report reveals that FTA television industry is now facing challenges from a number of fronts as incumbent broadcasters cling to their lucrative oligopolies. Marketing and media buyers are increasingly turning to alternative media, such as through Internet and mobile channels in order to reach consumers. Digital FTA TV has been held up in a vicious cycle since its launch. Available digital content, beyond simply offering better picture qualities, has been nowhere near sufficient to help drive digital TV. The main driver of growth has been 'user experience' delivered by DVDs and plasma screens.

By early 2007 with the vast majority of subscribers on digital services, pay TV penetration had only reached just over 25% and we expect penetration to reach only 26% in 2007. An overall pay TV revenue growth of 15% was recorded in 2006 and we expect growth to remain reasonably strong in 2007, while not increasing. A launch date for digital radio of 2009 is scheduled for Australia.

Free-to-Air TV

  • The Internet will become increasingly entertainment-based as broadband penetration is predicted to continue to rise steadily over next few years. Consumers will be demanding a richer and extensive online experience through services such as video based entertainment.
  • During the six years from 2001 to 2006, viewing of FTA television fell by over 11%, while overall TV viewing increased, mainly driven by the rise of pay TV. The FTA networks are expected to see intense competition for viewers and advertising in 2007 and beyond, which will impact on their cost margins as they will be forced to put more money into programming and marketing.
  • TV stations must market themselves more aggressively due to threats from the new media sector. Broadcasting ad revenues are already gradually being squeezed due to falling audiences and rising costs.
  • Australian audiences have increasing choice and control over when, where and how they consume media. These choices have been facilitated by the rise of technologies such as digital media players (iPods and MP3 players), digital personal video recorders, and video and audio downloads.
  • From 2002 to 2006, subscription television increased its average audience by approximately 30%. This increase has been at the expense of FTA networks.

Digital TV

  • By the beginning of 2007, penetration of digital TVs (digital receivers or digital integrated TVs) stood at only 25% of Australian households, which still classifies digital TV as a niche medium.
  • The main driver of growth has been 'user experience' delivered by DVDs and plasma screens. This has been a bigger driver for digital TV devices than digital TV itself.
  • Rate of adoption increased significantly in 2006 as the price of widescreen TVs (plasma and LCD) dropped to below $2000 at the lower end of the market.
  • By early 2007, the move towards flat panel TVs had further accelerated with CRT TVs only constituting a small proportion of TV sales as the price of the smaller screen LCD TVs and standard definition plasmas had dropped further. This trend will continue to accelerate through to 2008 as CRT televisions are totally phased out by retailers.
  • The estimated number of free to view digital television receivers sold to retailers and installers in the Australian market during the period 1 October to 31 December 2006 reached 302,000 units, raising the cumulative total sales figure since digital television transmissions began to over 2.3 million.

Pay TV

  • With the introduction of digital pay TV, the industry only saw modest growth through 2004 and 2005. Growth in 2006 in fact even slowed a bit further.
  • By early 2007 with the vast majority of subscribers on digital services, penetration had only reached just over 25% and we expect penetration to reach only 26% in 2007.
  • While it is still not impossible for pay TV reach the 35-40% penetration mark, this level can only be reached these targets if more attractive price packages are offered, or a broadband offering within an affordable priced package is offered. So far both Foxtel and Telstra have not been able to come up with such attractive packages.
  • For the year to December 2006, pay TV subscribers in Australia increased by just over 9%, only a modest increase on the previous year. A similar growth pattern is expected to continue further into 2007 and 2008.
  • An overall pay TV revenue growth of 15% was recorded in 2006 and we expect growth to remain reasonably strong in 2007, while not increasing.
  • Pay TV subscribers by operator - 2004 - 2007

Radio

  • Although its advertising base is growing, the radio market is losing share to other media sectors such as TV.
  • The declining power of FM radio is expected to be a key trend during 2007 and beyond. FM stations will be in danger of becoming less relevant to the youth market, as teenagers will increasingly turn to alternate new media channels such as the Internet for their music.
  • Digital radio will allow multi-channelling by existing and possibly new radio companies as advertisers will find it increasingly expensive to achieve broad audience reach.
  • In early 2007 the Federal Government was in the process of drafting digital radio legislation, setting the date of 1 January 2009 for the launch of digital radio services in Sydney, Melbourne, Brisbane, Adelaide, Perth and Hobart.
  • By early 2007, CRA was continuing with its digital radio trial in Sydney, while Macquarie Bank's Broadcast Australia was running a similar trial in Melbourne.

Content

  • 1. Overview And Analysis - 2007
    • 1.1 Free-to-Air TV
      • 1.1.1 Market overview and trends
      • 1.1.2 TV as multimedia launching platform
      • 1.1.3 Market statistics
    • 1.2 Digital TV
      • 1.2.1 Market trends
      • 1.2.2 Market statistics
      • 1.2.3 Market analysis - patchy digital TV reception - yet another stumbling block
    • 1.3 Pay TV
      • 1.3.1 Subscriber statistics
      • 1.3.2 Revenue statistics
      • 1.3.3 Market analysis
      • 1.3.4 Regulatory
    • 1.4 Media reforms
      • 1.4.1 Government Plans and Policies
      • 1.4.2 Analysis of the media reforms
    • 1.5 Radio
      • 1.5.1 Market trends
      • 1.5.2 Digital radio
  • 2. Digital Tv
    • 2.1 Market overview and statistics
      • 2.1.1 Market trends
      • 2.1.2 Market statistics
      • 2.1.3 Market surveys
      • 2.1.4 Market analysis
      • 2.1.5 Regional overview of broadcasters
      • 2.1.6 Proposed new media reforms
      • 2.1.7 Consumer survey of digital media in Australian homes
      • 2.1.8 Technological environment
    • 2.2 Digital video recorders
      • 2.2.1 Introduction
      • 2.2.2 Free-to-Air DVRs
      • 2.2.3 Market analysis
      • 2.2.4 Pay TV DVRs
      • 2.2.5 TiVo
      • 2.2.6 Digital TV and DVDs
      • 2.2.7 Television advertising
      • 2.2.8 Forecasts
    • 2.3 Interactive TV overview and analysis
      • 2.3.1 Market overview
      • 2.3.2 Definitions
      • 2.3.3 The future of Video on Demand - analysis
      • 2.3.4 iTV analysis
      • 2.3.5 Interactive advertising
      • 2.3.6 Market analysis - interactive advertising
      • 2.3.7 Case studies
    • 2.4 Set-top box overview and analysis
      • 2.4.1 Personal Video Recorders (PVRs)
      • 2.4.2 Market update
      • 2.4.3 Regulatory developments
      • 2.4.4 Market overview by sector
      • 2.4.5 Set-top box statistics
      • 2.4.6 Historical analysis
    • 2.5 Datacasting overview and analysis
      • 2.5.1 Regulatory framework
    • 2.6 Summary of datacasting developments and trials
      • 2.6.1 Year 2005
      • 2.6.2 Year 2006
    • 2.7 Datacasting review - 2006
    • 2.8 Launch of the first datacasting channel
      • 2.8.1 NSW Government's participation
      • 2.8.2 Macquarie Digital
  • 3. Free-To-Air Tv
    • 3.1 Broadcasters
      • 3.1.1 Market overview
      • 3.1.2 National broadcasters
      • 3.1.3 Regional broadcasting
      • 3.1.4 Community television broadcasting services
      • 3.1.5 Indigenous broadcasters
    • 3.2 Market overview and statistics
      • 3.2.1 Introduction
      • 3.2.2 Market trends and analysis - 2006 and 2007
      • 3.2.3 Market statistics and revenue - 2006
      • 3.2.4 Financial overviews
  • 4. Pay Tv
    • 4.1 Industry revenues and analysis
      • 4.1.1 Revenue statistics
      • 4.1.2 ARPU statistics
      • 4.1.3 Churn statistics
      • 4.1.4 Piracy statistics
      • 4.1.5 Pay TV advertising
    • 4.2 Subscribers overview and analysis
      • 4.2.1 Market overview
      • 4.2.2 Subscriber statistics
      • 4.2.3 Consumer penetration statistics
      • 4.2.4 Penetration analysis
      • 4.2.5 Pay TV penetration forecasts to 2010
      • 4.2.6 Industry trend towards broadband infrastructure
      • 4.2.7 The trend towards Digital Media
    • 4.3 Infrastructure - statistics and analysis
      • 4.3.1 The next phase from HFC to fibre
      • 4.3.2 Infrastructure statistics
      • 4.3.3 Major players - overview and major developments
      • 4.3.4 Infrastructure analysis
  • 5. Digital Media Reforms
    • 5.1 Analyses of media reforms
      • 5.1.1 Media reform the aftermath
      • 5.1.2 Disappointing media reforms
      • 5.1.3 Media reforms - who could get what?
      • 5.1.4 Analysis of the government media policies - 1996 - 2006
      • 5.1.5 Technology might solve cross-media laws
      • 5.1.6 More dynamic media market needed
      • 5.1.7 Customer demand driving changes
      • 5.1.8 Structural changes are needed
    • 5.2 Government plans and policies
      • 5.2.1 New Policy Directions
      • 5.2.2 Prelude to new digital media policies
      • 5.2.3 Proposed media reforms
      • 5.2.4 Finalisation of new media reforms
      • 5.2.5 IPTV regulations?
      • 5.2.6 Policies and Regulations - 1996 - 2006 - Historic
  • 6. Radio
    • 6.1 Overview and statistics
      • 6.1.1 Market overview
      • 6.1.2 PwC's four-year predictions to 2010 on the media and entertainment sectors - August 2006
      • 6.1.3 Demand statistics
      • 6.1.4 Financial statistics
      • 6.1.5 Major players
      • 6.1.6 Digital media developments
      • 6.1.7 Visual radio
      • 6.1.8 Community radio
    • 6.2 Digital radio
      • 6.2.1 Market overview
      • 6.2.2 Market surveys
      • 6.2.3 Development path of digital radio
      • 6.2.4 Features and benefits of digital radio
      • 6.2.5 New and alternate delivery channels
      • 6.2.6 Technologies
  • 7. Glossary Of Abbreviations
  • List Of Exhibits
    • Exhibit 1 - Digital TV broadcasters by region - 2006
    • Exhibit 2 - Digital media reform - current rules and key proposed changes
    • Exhibit 3 - ACMA register of datacasting licensees - 2006
    • Exhibit 4 - Commercial television licences - 2006
    • Exhibit 5 - Nine Network coverage
    • Exhibit 6 - Regional licence area plan update
    • Exhibit 7 - Community television licences - 2005
    • Exhibit 8 - Public television stations funding - 2003 - 2004
    • Exhibit 9 - New media activities from pay TV operators - 2006
    • Exhibit 10 - Pay TV roll-outs by state
    • Exhibit 11 - The key issues still remain the same
    • Exhibit 12 - Media diversity
    • Exhibit 13 - Dutch digital media policies
    • Exhibit 14 - Digital media reform - current rules and key proposed changes
    • Exhibit 15 - Estimated number of radios in the home
    • Exhibit 16 - Austereo national networks - 2006
    • Exhibit 17 - SBC key radio stations
    • Exhibit 18 - Timeline of music on the Internet
  • List Of Tables
    • Table 1 - Pay TV subscribers by operator - 2004 - 2007
    • Table 2 - Commercial TV networks share of advertising revenue - 2001 - 2006
    • Table 3 - Commercial TV networks audience share of revenue - 2005 - 2006*
    • Table 4 - Major broadcaster's primetime audience share - 2006
    • Table 5 - Digital TVs and integrated digital TV sets sold - 2003 - 2006*
    • Table 6 - Average monthly sales volume of digital TV receivers - 2005 - 2006*
    • Table 7 - Pay TV subscribers by operator - 2002 - 2007
    • Table 8 - Pay TV subscribers annual change by operator - 2002 - 2007
    • Table 9 - Pay TV household penetration - 1997 - 2007
    • Table 10 - Pay TV revenue per operator - 1997 - 2008
    • Table 11 - Percentage change of pay TV revenue per operator - 2002 - 2008
    • Table 12 - Digital TVs and integrated digital TV sets sold - 2003 - 2006*
    • Table 13 - Average monthly sales volume of digital TV receivers - 2005 - 2006*
    • Table 14 - Average monthly sales volume of integrated digital TVs - 2006*
    • Table 15 - Digital TV adoption by number of devices - 2005 - 2006
    • Table 16 - Number of CRT TVs sold - first and third quarter 2006
    • Table 17 - Household penetration of digital TVs* - 2005 - 2006
    • Table 18 - Number of digital TV* households - 2001 - 2007
    • Table 19 - Digital TV statistics - household penetration - August 2006
    • Table 20 - Digital pay TV statistics - July 2006
    • Table 21 - Widescreen TV sales - 2004 - 2006
    • Table 22 - Growth rate of widescreen TVs - 2005
    • Table 23 - TV sets in Australian households by type of set - September 2005
    • Table 24 - Percentage of households with FTA or pay TV - 2005
    • Table 25 - Household penetration of digital media - 2005
    • Table 26 - Percentage of household use by application or platform - 2006
    • Table 27 - Frequency of device used for downloaded content - 2006
    • Table 28 - Main drivers for DTTB* adoption - 2006
    • Table 29 - Is digital FTA TV available to households in your area?
    • Table 30 - Awareness of analogue switch-off - 2005 - 2006
    • Table 31 - Type of television set in use - 2005
    • Table 32 - Top nine most satisfying features of digital FTA TV - 2005
    • Table 33 - Segmentation of households according to interest in adopting digital FTA TV - 2005
    • Table 34 - Penetration of pay TV services by access device - 2005
    • Table 35 - Foxtel iQ DVR subscribers - 2006 - 2007
    • Table 36 - Percentage of digital pay TV subscribers - 2004 - 2006
    • Table 37 - Subscriber churn rate by customer category - 2006
    • Table 38 - Digital TV adoption by number of devices - 2005 - 2006
    • Table 39 - Digital TVs and integrated digital TV sets sold - 2003 - 2006*
    • Table 40 - Penetration of pay TV services by access device - 2005
    • Table 41 - Penetration of DVD players by type of device - 2005
    • Table 42 - EPG developments based on current DVRs
    • Table 43 - EGP developments based on DVR pricing
    • Table 44 - FTA set-top box users - 2001 - 2010
    • Table 45 - Foxtel iQ DVR subscribers - 2006 - 2007
    • Table 46 - Number of television and radio licences on issue - 2004 - 2005
    • Table 47 - Number of television licences on issue (historical) - 1999; 2001 - 2004
    • Table 48 - ABC operating revenue and cost of services and annual change - 2005 - 2006
    • Table 49 - ABC revenue and annual change (historical) - 1998 - 2004
    • Table 50 - Nine Network revenue and annual change - 2003 - 2006
    • Table 51 - Seven Network revenue and annual change - 1999 - 2006
    • Table 52 - Network TEN revenue and annual change - 1995 - 2006
    • Table 53 - Television set penetration by number of sets - 2006
    • Table 54 - Advertising revenue for commercial television networks - July to December 2006
    • Table 55 - Commercial TV networks share of advertising revenue - 2001 - 2006
    • Table 56 - Commercial TV networks audience share of revenue - 2005 - 2006*
    • Table 57 - Major broadcaster's primetime audience share - 2006
    • Table 58 - Primetime audience shares - Summer-to-date - weeks 49-50, 2006 v weeks 49-50, 2005
    • Table 59 - Primetime audience percentage shares - Summer-to-date - weeks 49-50, 2006 v weeks 49-50, 2005
    • Table 60 - Ad revenue forecasts by media sector - 2006
    • Table 61 - Average number of FTA viewers in capital cities - 2001; 2005
    • Table 62 - Share of advertising revenue - 1990; 1995; 2000; 2005
    • Table 63 - Australian commercial TV revenue and expenditure - 1992 - 2005
    • Table 64 - TV broadcasting revenue and expenditure growth - 1996 - 2005
    • Table 65 - Commercial TV revenues by broadcaster - 1998 - 2005
    • Table 66 - Commercial TV broadcasters' revenues as share of total - 1998 - 2005
    • Table 67 - Broadcasting and commercial licence fees collected by ACMA - 1997 - 2005
    • Table 68 - Commercial television programming spending - 2003 - 2005
    • Table 69 - Pay TV revenue per operator - 1997 - 2008
    • Table 70 - Percentage change of pay TV revenue per operator - 1998 - 2008
    • Table 71 - Telstra pay TV bundling revenue and annual change - six months to December 2006
    • Table 72 - Net losses pay TV industry - 1996 - 2007
    • Table 73 - ARPU levels per operator Austar, Foxtel and Optus - 1999/2002; 2003 - 2007
    • Table 74 - Pay TV industry annual churn rates - 1996 - 2007
    • Table 75 - Foxtel subscriber annual churn rate - 2002 - 2006
    • Table 76 - Foxtel subscriber annual churn rate by customer category - 2006
    • Table 77 - Austar monthly and annual subscriber churn - 2002; 2005 - 2006
    • Table 78 - pay TV advertising spending estimates and annual change - 2005 - 2007
    • Table 79 - Pay TV subscribers by operator - 1995 - 2007
    • Table 80 - Pay TV subscribers annual change by operator - 1997 - 2007
    • Table 81 - Telstra pay TV bundling subscribers and annual change - six months to December 2006
    • Table 82 - Digital pay TV subscribers percentage per Foxtel/Austar - 2004 - 2006
    • Table 83 - Pay TV household penetration - 1997 - 2007
    • Table 84 - Pay TV viewing versus FTA channel viewing - six months to June 2006
    • Table 85 - Pay TV HH penetration and number of subscription TV HHs - 2000 - 2005
    • Table 86 - Pay TV audience growth by age group - 2004 - 2005
    • Table 87 - Pay TV HH penetration in Australia versus overseas countries - 2005
    • Table 88 - Pay TV viewing as a percent of total TV viewing - 1998 - 2006
    • Table 89 - Penetration of pay TV services by access device - 2005
    • Table 90 - Market share by provider and annual change - metropolitan homes in Australia - 2004 - 2005
    • Table 91 - Market share by provider in pay TV homes - 2004 - 2005
    • Table 92 - Forecast pay TV household penetration, low market growth scenario - 2005 - 2010
    • Table 93 - Forecast pay TV household penetration, high market growth scenario - 2005 -2010
    • Table 94 - Pay TV roll-out statistics (homes passed) - 1996 - 1998; 2002 - 2006
    • Table 95 - Share of all radio listening (historical figures) - 2003
    • Table 96 - Number of commercial and government radio stations - 2006
    • Table 97 - Radio subscription and advertising revenue, forecasts and annual change - 2000 - 2009
    • Table 98 - Advertising spending by media sector - 2005
    • Table 99 - Commercial radio penetration and time spent listening - Sept - Nov 2006
    • Table 100 - Time spent listening by capital city (excluding Canberra, Hobart, Darwin) - 2006
    • Table 101 - Audience penetration by time of day - 2006
    • Table 102 - Radio listening by radio location - 2001 - 2006
    • Table 103 - Commercial radio - top ten industry sectors and annual change - 2004 - 2005
    • Table 104 - Metropolitan radio advertising revenue - 2005
    • Table 105 - Australian commercial radio financial results and annual profit change - 1992 - 2005
    • Table 106 - Number of commercial radio services by city - 2006
    • Table 107 - ABC radio regional reach and share - 2005/06