Opinion

This is not the death of free-to-air TV

The future of free-to-air TV isn't six-feet-under, it's right where it's always been - on top. As long as broadcasters commit to offering quality content on-demand to capture the competitive Gen Zs, says David Taylor, in this guest post.

Over-the-top services such as Netflix, Stan and Apple TV have cemented their place in the future of Australian entertainment; however, contrary to popular belief this growth has not caused the demise of free-to-air TV channels. Channels will survive, and thrive, if we nurture them.IMG_0625 copy

Australians don’t take control of the TV remote until they are 24 years old and this has a significant effect on the volume of second screen viewing by the 16 to 24 age group.

Australians become financially independent and leave home at an average age of 23, according to the survey conducted by Australia’s largest life insurer TAL.

This is supported by the 2015 stats from the ABS (Australian Bureau of Statistics), who inform us that 53% of Australians aged between 18 to 24 are still living with their parents, whereas 83% of those aged 25 to 34 have left home. 

Interestingly, according to the most recent Australian Multi-Screen Report, broadcast TV viewing on in home TV sets increases by over 10% from the 16 to 24 age range for those aged 25 to 39, and continues to climb through each consecutive age group.

 

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Not surprisingly there is a drop from 86.2% of kids viewing on in home TV sets, to 74.4% of teens, to only 69.1% of 16 to 24 year olds. This decline in watching content on the main in home TV set should come as no surprise, if we concede that at age 16 it is no longer cool to either watch what your parents have put on for you, or watch with them.

Youth craving independence is not a new phenomenon, and the Australian Government’s Department of Human Services acknowledge this by offering “to provide information, payments and services if you are between 15 and 24 years of age and becoming independent”.

There are many indicators, and sociological studies documenting the struggle of the 16 to 24 year old market in attaining independence, but that’s not for here, it merely bears testament to the notion that this age group will not settle down to watch TV with their parents, but will choose any available alternative.

This desire to be in another room, watching something else explains why we have the lowest percentage of viewing on in home TV sets in this age range, prior to leaving the parental home.

The point of intersection between leaving the parental home and demonstrating a marked increase in viewing broadcast TV on an in home TV set is…24 years old.

Four teenager watching tv on the sofa.

So, as they take control of the TV remote-control in their own home their monthly viewing figures jump from 37:22 to 56:19 hours per month. An extra 18:97 hours (33.7%) of viewing broadcast TV on in home TV sets by those who have gained their independence.

Also, while people, particularly those aged 24 and under, increasingly use connected devices to watch TV and other video, broadcast TV viewed on TV sets still accounts for the largest proportion of viewing time on any single device.

Baby Boomers are watching up to 153:48 hours per month of broadcast TV on in-home TV sets – there are 5.17 million of them making up 22% of Australia’s population; 4.78 million Gen Xs are watching up to 122:38 hours per month, and another 22% of the nation, 5.22 million Gen Ys are watching up to 84:12 hours per month.

There are still 15.7 million in total watching huge monthly hours worth of broadcast TV on in-home TV sets.

Our life expectancy is around 82 years old, 58 years beyond age 24. That’s an awful lot of broadcast TV viewing on in-home TV sets still to be done by such a large audience, over the next couple of decades at least.

So why the immediate fear for the life expectancy of their channels from the networks, and why would agencies move advertising away from TV, unless the networks themselves had a crisis of faith in their ability to deliver attractive, popular content to the masses via their own channels.

À la carte vs set menu

There was a rush by our local free-to-air and subscription TV networks to provide an a la carte content selection to customers via their counteroffensive to the arrival of Netflix. I know they felt it was needed; Nielsen data at the time stated: “Online viewing is particularly pronounced amongst the younger demographic of 16 – 24 year olds. Two thirds of 16 – 24 year olds watch TV content online”.

So the networks knew exactly who they were trying to target. (By the way, according to RBA data, other than those aged 65+ this age group have the lowest disposable income and expenditure) What I don’t understand is why they effectively turned their backs on supporting their own channels, particularly through marketing efforts.

Perhaps the answer is as simple as, the networks poured funding and content into their alternative over-the-top services [Presto, Stan] and had little or nothing left for the channels?

Perhaps series such as Better Call Saul would have served the Nine network and advertisers better played out on the free-to-air channel, rather than exclusively to a diminutive Stan audience?

It is still a puzzle to me that you would work hard to promote an offering that is similar to Netflix, but quite frankly not as good, rather than focus on building and promoting your point of difference.

The industry has for some time been discussing ‘the death of channels’, based on what?  Has anyone actually spoken to 16 to 24 year olds and asked what they expect in the future, or are we just reading data regarding current use of devices? Are we cross-referencing that data with social, cultural and political filters and understanding what we see?

Ask them, and they expect it all…not one thing or the other, but all of it and it needs to be as good as it gets. They expect a la carte and set menu, FTA, STV, OTT channels and on demand. Why would we think any different?!

The survival of channels is based on nothing more than acquiring enough excellent content to fuel them 24/7. Content was king, is king and always will be king.

Even in the dark days of having only terrestrial TV channels and nothing much else competing with them, viewers would gravitate to the most popular content, regardless of whichever channel it was on. So one would suspect the networks have always understood that their ratings were a reflection of their content. Good (popular) content, good ratings and good ad sales. Bad (not popular) content, bad ratings and bad ad sales.game-of-thrones

We only have to look at HBO’s Game of Thrones to understand the power and control that comes with awesome content – the season six finalé set a record in Australia as the most-watched program in subscription TV history.

In this day and age who would believe weekly appointment viewing could still exist? But if you’ve decided that’s how you will deliver to your audience, then I guess they have to live with it.

The suspense and anticipation that builds each week simply adds to the viewers overall experience, and if the content is as good as it promised to be they will keep coming back.

Imagine channels where all of the content, back to back, is as awesome as Game of Thrones? That’s what our 16 to 24 year olds are expecting.

This set menu offering satisfies a number of intrinsic home viewer needs. We arrive home from work exhausted, spending hours flicking between Apple TV, Netflix, Stan – and now Amazon Prime – plus multiple catch-up services. Trying to decide what to watch is simply not an option. So we turn on the TV while we grab some dinner and we find ourselves settling into a show that’s on – any show – because we had left the TV tuned into our favourite channel.thinkstockphotos-dad-tv-remote-control-baby-foxtel-subscription

This is when the niche and genre channels work well, and STV has an advantage by sheer volume of channel offering. In the mood for comedy, drama, arts, cooking, general lifestyle home improvement, British production only content, back to back films, news or sport? There’s a category focused channel waiting for you.

The only choice you have to make is what are you in the mood for, or what is your go-to channel. We all have a go-to channel, it’s usually the one that’s on when we switch the TV on. For some, it could be MUTV – that’s how niche we’re getting now: Manchester United TV!

Niche and genre channels as curators of high-quality content is part of the expectation.

As these channels are fueled with awesome content we’ll build equity into the channel and brand; in exactly the same way we do with any other brand, through provision of an awesome consumer experience, building trust. This channel brand distinction will become increasingly important as viewers navigate the numerous channels from different networks with the same niche offering, which will be available.

So, ultimately channels may not be general entertainment (although, I suspect GE channels will survive if the content is good enough), they may all be streaming, they may not be recognisable as the channels we see today, but they will exist as their own branded entity, as the trusted curator of quality content in a specific area of interest.

They may even end up company owned. So you can forget the need for the traditional 30” TV commercial if you’re watching The Harley-Davidson Channel…now there’s a channel we need!

The rush by the networks to focus on OTT offerings to counteract Netflix and the investment required weakened their channel offering. Perhaps they should simply have invested in top quality content for their channels, and they certainly did themselves a disservice by focusing their marketing efforts on promoting their sameness as Netflix, rather than their point of difference.

Channels will live on, the evidence is there our 16 to 24 year olds will watch them as they become 25 years old and pick up their own remote control in their own home.

So, networks, go build, promote and love your channels, they are your USP.

Dave Taylor is the managing director at Ink Project

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