Australia’s TV networks need to create a unified BVOD service now

For all the chest thumping around the usage of broadcast video on demand (BVOD), Australia's free-to-air TV networks are engaged in a battle against a much larger, much more popular, much more capitalised and much more evolved monster. PwC's Ben Shepherd explains why, at the moment, they're fighting a losing battle.

There is no denying Australian TV networks have made some positive strides over the past two to three years around their on-demand products.

The commercial catch up services from Seven, Nine, 10 and SBS have improved in terms of usability and depth over this time, and the speed at which highly viewed programming has made its way to on-demand platforms has increased to the level that users arguably had expected for some time.

However for all the chest thumping around the usage of BVOD – it is engaged in a battle against a much larger, much more popular, much more capitalised and much more evolved monster.


“Netflix is a verb. 7Plus is a noun” 

There is no question all participants in the ad funded video ecosystem have understated the impact Netflix has created.

It drags viewers away from ad funded channels and allows people to consume high volumes of content with absolutely no advertising interruption.

It is not just a young persons phenomenon. Yes, it is driving already scarce under-35 eyeballs away from TV (and other media), but it’s a mainstream activity in the majority of houses, across the majority of demographics.

Netflix has become the go-to for key genre battlegrounds – namely drama, kids programming, comedy and documentaries. Leaving the FTA networks competing primarily in live sport (expensive) and reality (risky).

TV is becoming entirely dependant on the power of the programming – not the network. Arguably the brand power of a network is low  – a “strong” network brand can’t prop up a poor show, but a powerhouse show can prop up (temporarily) a poor network.

My view is four individual BVOD channels cannot compete with Netflix in the long term. They are playing a game they will lose – across depth of content and portfolio, across sophistication of data, across economies of scale and across brand.

“Netflix and chill”, “sat and watched Netflix all weekend”, “can’t wait to crack open a wine sit in front of Netflix” have become legitimate things you hear. Netflix is a verb. 7Plus is a noun.

Netflix is where you go to be entertained. The BVOD services are where you go (currently) to watch a specific show. Look at VPM data – BVOD viewing is driven on the whole by a handful of key programs (MAFS, MKR, Brooklyn 99, Home and Away, The Good Doctor, Killing Eve, Handmaid’s Tail, Bachelor in Paradise, Bluey, Peppa Pig, The Bold and The Beautiful).

To compete truly against Netflix for attention (and let’s face it – the BVOD competitors, and the wider FTA industry’s main competitor IS Netflix) these services need to be deeper and transfer from a conduit to watch your favourite show to a platform for entertainment.

My opinion is the only way that this can be feasibly done is for the four commercial FTA BVODs to become one service – an all-you-can-eat, free, place to find a large volume of entertainment across all genres.

No need to have four apps on your phone.

No need for four logins.

No need for different user experiences.

Everything on the one platform – available across devices.

Click to enlarge

Based on Nielsen Answers data for non-connected TV usage of these catch-up platforms, combined they have an unduplicated reach of approximately 5m. The overlap between services is anywhere between 15-47%, with 9Now the largest in terms of users at 2.88m. (Remember these numbers are based on what Nielsen Answers can measure – panel only, ex. connected TV).

By pooling in this hypothetical – these services would broaden their overall reach to 5m people – for most a 50% increase. Collectively the catalogue available for the user would boost from 200 titles to likely over 1,000, if not more. This would immediately make this rolled-up platform the second largest OTT provider in the country.

By becoming one entity, the networks could save on resourcing and development, marketing and go to market. They could still sell their programming individually – or they could create a shared marketplace where revenue is distributed based on inventory placement.

I appreciate this thinking may seem radical, but the data and current usage would suggest that competing against Netflix is likely to be a battle that will be lost – and it is highly unlikely any individual BVOD can be anything but a niche player when compared to the enormity and ubiquity of current video platforms YouTube and Netflix, and platforms that should be considered video such as Facebook, Instagram and Snapchat.

Users have shown they want depth of content, breadth of catalogue and accessibility based on their wants, not the networks’. They have demonstrated they are willing to pay for this en masse across all demographics and most income bands. Free TV must adapt and needs to look at how it reimagines itself as a modern entertainment platform built to thrive in the future, not protect past legacies.

Ben Shepherd is a director at PwC. This post first appeared on LinkedIn, and has been reposted here with permission. 


Get the latest media and marketing industry news (and views) direct to your inbox.

Sign up to the free Mumbrella newsletter now.



Sign up to our free daily update to get the latest in media and marketing.