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  • Subject area(s): Marketing
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  • Published on: 14th September 2019
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The television sector of the media industry in Australia has seen many changes in recent years. It is important to distinguish between consumption trends in traditional free to air television and consumption trends in the much broader sense of televisual content. Overall, while consumption of free to air television is declining, consumers are watching more television just in different forms than were traditionally available. According to the 2017 Australian Media Consumer Survey, more television is now watched online rather than live with 50% of consumers owning IP-enabled televisions and 32% of consumers paying for subscription video on demand services such as Netflix and Stan (Alcorn & Buchanan 2017, p.4). With regards to live television, the main players are sport and news broadcasting. Sport and news are the two types of televisual content that are still the majority of the time consumed live on a television set. This consumption is likely to change, however, to live consumption via mobile devices. The movement towards this change can be seen through Telstra's introduction of data-free access to the streaming of AFL and NFL games (Alcorn & Buchanan 2017, p.12).

The future of live programming and pay TV, specifically through the platform of traditional television sets, has, however, been presented with challenges as mobile streaming services begin to offer live programming (Alcorn & Buchanan 2017, p.14). The ability to access live programming, especially sport and news services, through online platforms means consumers can watch live content more conveniently as they are not limited by their location. While this is undeniably a positive for consumers, it poses challenges to free-to-air and pay TV broadcasters that are reliant on their general monopoly over live broadcast to remain relevant. Reality television has, however, played an important role in sustaining the relevance of live television. There has been an increase of reality television consumption from 17% in 2015 to 21% in 2017 (Alcorn & Buchanan 2017, p.12). Shows such as My Kitchen Rules and Married at First Sight are programmed together to create an event out of the broadcast. This creates a binge-watch-like experience and promotes interaction with the content on social media. This is especially relevant on platforms such as Twitter where ‘live tweeting' has become such a popular phenomenon. The real-time aspect of the broadcast ties in with the real-time character of the interaction, which serves to further maintain the relevance of the live broadcast.

Jock Given references the work of Dominic White and Paul McIntyre (2015) when he suggests that, the increasing amount of subscriptions to subscription video on demand services does not mean the death of television. It instead will mean an explosion of televisual content consumption by people not already subscribed. It will, however, prove a limitation to live broadcasters' earnings as expensive, risky content will need to be created to maintain their relevance (Given 2016, p.116). In 2015 the departing Managing Director of the ABC, Mark Scott, called for a debate over the idea of a digital content fund which would require digital content companies, most notably subscription video on demand services, to contribute a percentage of their revenue to creating new local content (Given 2016, p.116). This is especially important as the Australian television industry is dominated massively by international, especially American, companies, and thus Australian consumption of television is also dominated by international content. A digital content fund would serve to prop up the increasingly underfunded production of Australian local content. This could be a positive influence in the building of Australia's television industry in terms of both public, free-to-air television, pay TV and local subscription video on demand services such as Stan and Presto.

As has been mentioned, the flood of the market with international players and content, especially those from the United States of America has proved a challenge to the Australian television industry in terms of content production and building an above all ‘Australian' sector. streaming services, especially Netflix, have had a very large role in this. Similarly, ownership of Australian media companies by international corporations has seen a homogenisation of Australian broadcast television with. It also, however, presents the possibility of a revitalisation of the Australian television sector. This revitalisation would be stemmed from an enormous boost in funding for the Australian media industry. This possibility and the opportunities it can present is exemplified in CBS' recent purchase and takeover of Channel Ten and its linked catch-up service TenPlay. The main impacts this change in ownership will have will be to do with broadcast rights and access to exclusive content. CBS currently owns Channels Ten, Eleven and One. CBS content is also already broadcast on all of the major Australian commercial television stations and it has exclusive content deals with Foxtel and Stan (C-Scott 2017). Because of this, CBS' takeover of Channel Ten could serve to disrupt the other network's access to content as CBS will now have a stake in deciding which shows are aired on which networks. CBS will have enormous power in influencing the shape of Australian broadcasting and the identity and brand of the major Australian television networks.

As Marc C-Scott suggests, in his article ‘The impact of CBS' takeover of Ten is much larger than just one network', CBS' new ownership of Channel Ten, coupled with declining revenue from advertising for television networks, it is in CBS' best interests to keep all its most popular shows for its own programming (C-Scott 2017).  In addition to this, CBS' launch of its new streaming service, CBS All-Access, will further put pressure on Australian streaming service Stan as it does not have enough funds at its disposal to compete through the creation of original content. CBS All-Access will also provide competition for Foxtel who until the launch had almost a monopoly over the streaming of live sports coverage (C-Scott 2017). The successes of CBS' takeover for Channel Ten have been seen already with three of the top seven reality shows and game shows, and eight of the top ten, including the top four, US drama series for its target audience of 24 to 54-year-olds (Network Ten PTY. LTD. 2017). Furthermore, the emphasis on local programming of reality television shows such as Master Chef and I'm a Celebrity Get Me Out of Here, although costly, saw a huge increase in Channel Ten's audience share over the first half of 2017 (C-Scott 2017). As such, while the increasing international influence over the Australian television sector presents challenges for established Australian players who are not in as powerful a position, it also provides the opportunity and more realistic means to increase Australia's local media output.

Although consumption trends do suggest a move away from traditional television viewing, the numbers fail to take into account the nuances of consumer's relationship to television broadcasting. Australia has consumed free TV for over 60 years. Free-to-air television is a major aspect of the Australian media industry. As such there can be questions raised as to the extent that subscription video on demand services can make that aspect of broadcasting redundant. Pay TV services have only been able to achieve a 30% penetration in Australia and their growth has stagnated over the last few years. This is despite Tom Mockridge, the original CEO of Foxtel, predicting that by 2009 Foxtel specifically would reach three-quarters of households. In comparison, penetration of cable TV in the United States is at 90% (White & McIntyre 2015; C-Scott 2015). As such, the movement to subscription video on demand services by American consumers was a more natural progression than in Australia where the majority of the public is not accustomed to paying for their television consumption.

In a talk at the 2015 Re:Publica Media Convention in Berlin, Netflix co-founder and CEO Reed Hastings made the claim that television would be dead by 2030. He predicted that all viewing of televisual content would occur through the internet, with television sets becoming more like large iPads. He also suggested that the viewing of live sports will move towards an internet-based system organised by league and that the introduction of 4k ultra-high definition video will move this transition along more quickly (‘Talk with Netflix CEO Reed Hastings | republica' 2015). These claims have been rejected by current CEO of Foxtel, Richard Freudenstein. He claims that subscription video on demand services and internet television will never end traditional linear broadcast television. Mock ridge revealed in an interview with the Australian Financial Review (White & McIntyre 2015) that he believes the role of broadcast TV is still very important and is, in fact, becoming “more and more valuable”, especially in America, as it “appeals to a wider audience.” Freudenstein also suggests broadcast television can provide more opportunities for the creation of original content stating that Foxtel is investing much further in Australian content, has won more Logies than any other television network, and shows “more first-run programs in a week across [their] platforms than Netflix does in a year.” As such, even though there have been impressive early uptake figures for subscription video on demand services, this does not seem likely to threaten the future viability of broadcast television.

In the face of challenges coming from subscription video on demand and other services, the prospects for broadcast television in Australia are promising. When looking at the United States and Great Britain, the statistics are not nearly as brutal as one might have expected. It has been estimated that devices hooked up to television sets, as well as ‘over-the-top' services, such as Netflix, amount to only 10% of United States viewing time, with subscription video on demand consumption making up the majority of that figure. In the United Kingdom, since 2012, subscription to Netflix has only reached 14.1%. As suggested earlier, the research completed by BARB, a British TV industry measurement body, reveals that the majority of Netflix subscribers are from cable TV households, people who are already involved in pay TV (White & McIntyre 2015).

While consumption trends definitely suggest a continuing rise in the prevalence of internet-based television. This does not sub sequentially mean a decline in the importance of broadcast media. There is still a relevant place in Australia's television industry for traditional linear broadcast television, whether that be with live sport, news or free-to-air programming. Internet tv has been often placed as a ‘television-killer' according to the chair of Thinkbox, the United Kingdom's TV industry marketing body, Tess Alps. She suggests that purveyors of the TV doom message are mostly wanting to become TV. The involvement of companies like Netflix in the television industry is undeniable, they are enmeshed in the landscape of content creation and sale. That these companies that are suggesting the end of television thus seems incongruous with the way they operate within the industry. As such, although the landscape is changing, subscription video on demand services, are likely, at least in the near future, to remain an add-on for those consumers looking to expand their television viewing rather than replace it.

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