Staying at home might mean watching more TV, but the future of free to air remains uncertain

People may be watching more and more TV as they self-isolate, especially news and current affairs, but there's still the matter of multiple productions being suspended, a lack of live sport, and the postponed Olympics. And this means the future of free to air TV is still up in the air, argue The Media Store's Paul Wilkinson and Abby Burnett.

With phrases such as ‘social distancing’ and ‘self-isolation’ early contenders for word of the year, we are also hearing a lot about ‘unprecedented’ and ‘uncertainty’ as global markets speculate about what will happen next. Will the market bounce? Will we see this current period as a short-term inconvenience? Or is the worst still to come? I’m no doctor, so, much like all of you, I can’t say.

From a trading perspective, we are hearing phrases we didn’t anticipate a few weeks ago; a “ratings increase” is a grim pleasure for broadcasters and media buyers as advertisers review marketing budgets and media owners’ share prices tumble.

We’ve seen consumption growth across radio, print and digital, and TV has experienced the most notable upturn in viewers after a five-year decline. Both the linear and BVOD services are showing significant week-on-week gains.

In particular, news and current affairs audiences are soaring in response to COVID-19; the genre has gained an average viewership of 27% versus the start of March.

60 Minutes reported its highest ratings in five years last Sunday (29 March,) while both Today and Nine News have drawn a viewership not seen since March 2017. Seven News and Sunrise are up 15% and 10% year-on-year respectively.

The key takeout is that, while we may have seen a decline in viewer numbers over the last five years, the trust in the medium to provide up to date and (importantly) accurate information has not faltered.

And it’s obviously not just the news – programs such as Ten’s Dancing With The Stars showed an increase of almost 9% since launch and Australian Survivor climbed almost 24% since launch night. Forced to stay at home, viewers are seeking ‘comfort’ programming – a break from the bleak, if you will.

In the short term, this uplift may provide some comfort in TV land. However, there are still a number of production schedules on hold, the lack of live sport has poked holes in network programming formats, and, of course, there’s the Olympic-sized gap in content we are potentially facing beyond just July 2020.

To help alleviate this, there are talks of the government relaxing rules around the levels of Australian content local broadcasters are required to produce and put to air. This will be a welcome relief for the networks perhaps, but international content may not help them to hold onto this recent uplift, especially when up against subscription streaming services such as Netflix, Stan and Amazon Prime.

Without fresh local content, it will be hard for networks to maintain audience interest. Plus, the longer this lockdown lasts, the more the FTA networks will be pitted against such SVOD services.

It may be fortuitous, therefore, that broadcast video on demand (BVOD) services in Australia are established and gaining ground. In fact, 7Plus has had its biggest streaming and BVOD numbers to date, up 60% year-on-year. However, it also means a timely delivery of VOZ becomes even more important.

It would be easy for opportunistic marketers to argue that now is the time to take advantage of this recent spike in audience numbers and the soft trading market thanks to a sea of cancellations. But the bleak reality is that 23% of Australians surveyed by Global Web Index (GWI) in a recent study stated they will delay any major purchases until the outbreak has at least decreased or is over in their country.

Needless to say, advertisers will already know this. But there needs to be a balance. Brands simply turning their marketing off would be somewhat myopic but, similarly, it would be foolish for advertisers to jump in head first, blindfold on.

Once we start to recover from the initial shock of this crisis, we will be able to survey the damage done. But make no mistake, elements of this new normal will carry forward and the TV landscape will change because of it.

COVID-19 will help fast-track the inevitable in that sense: linear TV moving completely online, allowing the audience flexibility of choice and advertisers flexibility of buying space.

But, just like everything else these days, no one really knows yet.

Paul Wilkinson is head of investment, and Abby Burnett a trading executive, at The Media Store


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