Albany, NY -- (ReleaseWire) -- 06/02/2014 -- Tablets and other smart devices clear winners in a fragmenting entertainment market
The broadcasting markets – FTA TV, STV, IPTV, Digital TV and Mobile TV have seen a number of changes over the last couple of years. Changes have included digitalisation of the Free-to-Air transmission frequencies, digital radio rollouts and continuing trials, increased availability of subscription TV, hotting up of the IPTV market and more TV viewing on mobile devices. As a result of this tightly contested market we have seen some lowering of access charges for some of the subscription-based services. Often the audiences are altering their viewing patterns using available technology some legal and some questionable, with apps as well as online access to suit lifestyles and their viewing preferences rather than what the industry prescribes them to do.
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Also in 2014 the online advertising sector is gaining a further percentage of revenue and it overtook the revenues of the FTA industry. Many of the traditional TV companies are already struggling and will now need to move faster if they are to remain viable towards 2020 when the NBN rollout should see most Australians with fast broadband that allows full-streaming digital access. The broadcasters are now hoping that subscription video on demand (SVoD) content can bring back revenue to them as they try to convert their catch-up viewers to this paying model from the current free replay services that they also provide.
With subscription TV household penetration still languishing below 30%, we are seeing more content available over-the-top (OTT) through the IPTV service providers. Telstra, the largest, has more than 600,000 customers to its bundled Pay TV service. Other providers in the growing paid for IPTV market include FetchTV, Quickflix, EzyTV, FOXTEL’s Presto, while some overseas companies including Netflix are eagerly watching the market. In this publication BuddeComm provides updates and reports on this sector, but BuddeComm remains pessimistic about the current commercial IPTV business models.
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BuddeComm sees the traditional IPTV model as making something of a comeback, as new services are launched over higher-speed broadband networks and the introduction of competitively priced triple-play models. However, we believe that digital rights constraints are making it impossible for the service to take a larger share of the entertainment content market. It is therefore free catch-up TV series rather than movies and sport that are driving the current developments. Movie content available – under the basic IPTV subscription - is mostly B- or C-rated; A rated material and new releases are only available at extra charges.
There is a correlation between the availability of high-speed broadband and IPTV usage and BuddeComm estimates that further increases in high-speed broadband penetration will drive new IPTV developments. The rapid growth of smartphones and tablets is also giving this market a boost, as well as new business models like pay-per-view. By far the largest growth in IPTV video entertainment comes from user-generated content services such as YouTube, Facebook and a whole new range of services of short, and even super-short, videos. Catch-up TV would be the second largest category and the ABC’s iView is the clear winner here.
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We report on the increase in advertising spending on the mobile sector that has followed increased smartphone penetration among users, with smartphones and tablets becoming the primary device for many consumers. The increase in online advertising comes as Australian businesses expand their presence online and aim to see local sales win over from sales made offshore.
The addition of revenue streams from alternative ways of watching subscription TV such as IPTV is being watched from within the industry. The FTA broadcasters as well as the marketers and advertisers who also need a return on their investments are watching all the available content options. There are still many years for the standard TV market to have its monopoly-based content system available until the NBN becomes ubiquitous across Australia, when alternative digital streams become commonplace and ubiquitous, it is now the time to get higher penetration rates.
Watching mobile video from tablets, catch-up on PCs and other mobile devices requires more and more data bandwidth. Streamed programs on 3G or 4G are fast becoming data hogs on the mobile networks. As small data caps are normally the only available option due to pricing and availability, usage is somewhat limited in 2014/15 as a typical TV show uses around 500MB in a two hour session. But this does not deter many viewers with WiFi connectivity as the number one catch-up service, iView has more than 50% of its viewers using it on a mobile device.
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