As the number of traditional viewers fall, what does the future of broadcast television look like? By Michael Bodey.
The death of broadcast television
In this story
The figures presented to television producers in November were alarming. In 2016, the average age of an ABC TV viewer was 66.
Little wonder one of Michelle Guthrie’s few tangible objectives since joining the public broadcaster as managing director one year ago has been to “offer distinctive and relevant content not just to under 12s and to the over 45s, but to all Australians”.
The quest to capture and retain the elusive millennial (15- to 35-year-old) and generation Y (mid-20s to late 30s) audiences is exercising minds in all media and advertising businesses.
For commercial broadcasters, the reason is obvious. Advertisers, who, after all, pay for television, see the 25- to 49-year-old demographic as the commercial sweet spot of high-spending consumers. For a public broadcaster, the reasons are less obvious, other than the ABC having a duty, as Guthrie has said, to provide content for everyone.
Convention says broadcast television is atrophying primarily because younger viewers are switching off. Despite boundless and higher-quality content, viewing numbers are falling and the kids are to blame.
The thinking follows that these generations are growing up without broadcast television, distracted by social media, streaming and gaming, and consequently will be lost to television forever. So all news, drama, entertainment, music, everything has to be digital, ideally edited into chunks no longer than three minutes.
Privately, Guthrie has told television makers that broadcast television is dead, a notion that put producers back on their heels. Publicly, she presaged the ABC needing to “partner with third parties so our journalism and TV are available everywhere. The idea that the customer has to come and find you has been turned on its head”.
Certainly within the ABC, employees say, if you’re not on board the digital train, you have little future there. An ABC executive defends Guthrie, though, noting the managing director’s modus operandi is to be “provocative” by asking “really hard questions” of staff to up-end conventional thinking. “Her job is to make people alive to the challenges,” the executive said.
In its modern history, the ABC has tended to fly headfirst into innovation before possibly facing technological frights. It hasn’t always worked – remember the ABC Island on 3D virtual world Second Life? – although its digital strategy was emboldened by the outrageous success of its radio podcasting, which prolonged the lives of many Radio National programs, if not the channel itself.
Nevertheless, ABC staffers suggest the operational side of the broadcaster has been inert on digital advances recently, due to fears about the cost of digital transmission as federal budgets waned. While television transmission costs are exorbitant, they are fixed in contracts; conversely, the cost to broadcast digitally grows per user. But those costs to provide iView have plummeted, contrary to expectations, so the ABC has expanded its online offerings, such as this week’s announcement it will increase the resolution on iView to high definition, in line with commercial broadcasters.
Now will ABC TV be the victim of the corporation’s rush to digital? Or more importantly, is television as dead as many would have it?
It depends which way you cut the numbers. Internally, for instance, the ABC contends its viewer’s average age is 61, based on reach, not 66. But even after fiddling the numbers, signs of life in TV are not good.
Twenty years ago, seasons of Blue Heelers, Mr Bean, Friends or ER averaged more than two million metro viewers. Last year, My Kitchen Rules led the way with a 1.6 million metro average ahead of The Voice’s 1.2 million. But there were only five channels in 1997, not today’s 23 free-to-air channels, plus Foxtel and over-the-top streaming services.
Benchmarks for a hit TV show have fallen. At the same Screen Forever conference last year where Network Ten crowed the average age of its viewers was 46, compared to Nine and Seven’s 52 each, Nine’s head of content, Adrian Swift, noted its programs “have an expectation of an audience somewhere between 800,000 and 1,000,000 people”. The “hit” threshold was formerly more than one million and networks no longer look so keenly at “overnight” ratings.
Audience fragmentation has hurt the top-line TV ratings even if major TV events, such as the AFL grand final and NRL State of Origin, continue to break viewing records.
Overall, TV viewing has dropped though, says Doug Peiffer, chief executive of OzTAM, Australia’s metro television audience measurement provider. “It’s definitely come back. Five years ago we used to view three hours plus of TV a day; now it’s about two hours 50. But it’s far from dead. How many people television reaches across a week (20.19 million) is roughly the same but the frequency of viewing for some ages is down.”
The most recent 2016 Australian Multi-Screen Report by research agencies Regional TAM, OzTAM and Nielsen confirms the Australian population watches 90.16 hours of video a month and it is primarily on a household’s main TV (81 hours of which are live TV on a TV set) rather than a computer (7.32 hours), smartphone (3.49 hours) or tablet (2.41 hours).
These hours of viewing on a television are bumped by the average monthly viewing for 50- to 64-year-olds (131.53 hours) and 65+ (158.43 hours), while the 25-34 age group watches only 57 hours on television and 19 on computers.
So, younger viewers watch less TV than older viewers but it has always been so, Peiffer adds. Younger viewers are more fractured viewers, eschewing live TV for time-shifting and viewing on digital devices.
Not in great numbers, though. The television industry’s extension of audience measurement to include video player measurement, or live and on-demand online streams of programs, shows online viewing is a fraction of the TV audience. Even at its best, last Tuesday, Seven’s national seven-day audience of 2.094 million for My Kitchen Rules added only 66,000 online views.
Similarly, audiences for exclusive ABC iView content are small, making the cost-per-viewer invariably higher than for programming aired on ABC TV.
Broadcasters hoped online viewing might significantly increase audiences. It hasn’t. Overall, television viewing is down – the ABC’s reach is down 5 per cent year-on-year – and the question is only at what point does it bottom out.
“It’s easy to say something’s dying; it’s more difficult to work out what people are doing and wanting,” said one TV producer working with all networks.
The ABC’s departing director of television, Richard Finlayson, agrees viewing is down and the ABC appreciates where it needs to fill holes, particularly in Australian content and fewer repeats, but broadcast TV remains potent.
“Our view in TV is that our broadcast platform is our greatest chance of success in a digital world, so you have to nurture and treasure the audience you’ve got and use digital TV to fertilise and grow those digital habits in the future,” he said. “It’s riding two horses and it’s quite tricky.”
The new horses in town, Silicon Valley’s new streaming content behemoths, Netflix and Amazon Prime, have clouded broadcast television’s future because they contend their future is unrelentingly rosy. Furthermore, the slow decline in broad audiences for commercial broadcasters has coincided with a weak advertising market, although this week Seven and Ten both confirmed revenue increases, with Seven chief executive Tim Worner noting the current ad market was the best it’s been since 2014.
The subscription video-on-demand services Netflix, Amazon and Stan have had successful product launches, recalibrated audience expectations on when television should be available, and are protected by relatively predictable revenue streams.
Yet no one, not even their own program makers, knows how many viewers any show on Netflix attracts. Industry speculation suggests Stan’s major local programming, the thriller Wolf Creek and comedy No Activity, had audiences in the tens of thousands, unsustainable numbers for any broadcaster but okay for subscription services. This week, Britain’s Royal Television Society surmised, given available data, that Netflix’s major new series, The Crown, was viewed by 1.2 million Brits, fewer than the best-watched episode of Game of Thrones on pay TV (two million) and well off the 10 million-plus for episodes of BBC hit, The Great British Bake Off.
Broadcast TV is not dead. Screen Australia’s head of business and audience describes it as “weirdly resilient but looking very different to what it used to”.
TV has passed its peak advertising revenues and that has been hard to swallow. Yet research suggests viewers aren’t experiencing any behavioural changes; high-quality, long-form video content is still as appealing as ever.
Finlayson says ABC TV wants to make its main channel broader, with content “of interest to people of all ages”.
“That’s challenging,” he says, “but you can do that with the right content.”
Indeed, the ABC successfully lowered the average age of listeners to its youth radio station, Triple J, from an average of 39 five years ago. It did this with a mix of programming initiatives and the introduction of the Double J digital alternative.
“We think there’s a greater interest in finding family-based viewing moments,” Finlayson said. “They’re rarer but they’re more treasured.”
And they have a greater chance of connecting when broadcast on television. Ninety per cent of the population still turn on their main TV every week. “Why would you give up that foothold and reach of TV?” asks a producer.
A former ABC executive agrees. “You can maintain that broadcast strength for a very long time and I don’t know why you would get hysterical about the end of TV,” they said. “Digital and broadcast are not binary things.”
This article was first published in the print edition of The Saturday Paper on February 18, 2017 as "Screen tests".
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