Free to air TV: is it stuffed?

I used to think the threat to free to air television was exaggerated. Now, I've changed my mind.

For many years, people have been telling me that TV stations ought to join the ranks of newspapers, phone directories and department stores as sectors in irreparable decline. For years, I disagreed.

Sure, there are plenty of alternatives for free to air TV and competition for content means prices are bid up but no medium can attract the audience of the free to air television networks. If you’re an advertiser who wants instant product promotion among millions of people, TV is still the only way to go.

The numbers appear to support that view. In 2003, TV accounted for 30% of the ad market. Ten years on, it’s still 29.9%. By contrast, newspapers market share has halved; directories have fallen 60% and magazines by 45%. With new channels and sports being a key attraction, TV appears to be holding its own.  

Yet the launch of streaming services – think Netflix, Stan and Presto – is perhaps the most alarming threat ever faced by the networks. Those streaming services have enjoyed overwhelming success; iiNet says 15% of all its traffic is due to Netflix alone and other ISP's are struggling to cope with network demand.

It’s unlikely that viewers are supplementing their free to air viewing with paid streaming. Almost certainly, streaming will cannabalise viewing time from traditional networks.

Those networks must also deal with a looming demographic catastrophe. Speak to anyone under the age of 25 and its clear young people have already abandoned television. The stickiness of older viewers may be one reason that TV’s demise is yet to be reflected in the numbers. Over time, it will.

Sport is the one piece of content that can still generate huge audiences for traditional networks. Surely, that will change as sports leagues come to understand exactly how much power they wield. Following the lead of Major League Baseball, it’s only a matter of time before sports start hosting their own networks or, at the very least, demand much more money from traditional networks. Either way, without the free kick from live sports, I’ve changed my mind: TV stations are stuffed.

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