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Free-to-air television in AustraliaAnalysis by Bob Peters Free-to-air television services
| Access | Penetration and usage Free-to-air television servicesFree-to-air television services in Australia are provided by two government-funded national networks (ABC and SBS), three commercial networks (Seven, Nine and Ten together with their regional affiliates) and a variety of small community groups which operate independently in separate markets rather than on a networked basis. At present, the community broadcasters only provide analog services. ABC and SBS each provide one analog, one standard-definition (SD) digital service and one high-definition (HD) digital service. The three commercial networks each provide one analog and one HD digital service; from 2009, they will each provide an SD digital service as well. Programming on the SD digital services of the two national broadcasters (branded as ABC2 and SBS World News) is largely different from their analog services, whereas their HD digital services are high-definition simulcasts of their analog services. In contrast, at this time, the HD digital services of the commercial networks typically consist of high-definition simulcasts of programs on their analog services or time-shifted programming from their analog services broadcast in high-definition format, supplemented by a relatively small amount of unique programming. AccessFor most Australians, free-to-air television still means access to the analog services provided by each of the five networks (ABC, SBS, Seven, Nine and Ten), which are available to at least 94 per cent of the population – although in some more remote parts of the country only one or two commercial analog services, together with the ABC’s analog service, are currently available. Viewers in metropolitan and some larger regional markets may also have access to a sixth not-for-profit analog service provided by a community broadcaster. These five or six services can be viewed on standard analog receivers. A digital television receiver, set-top converter box or subscription to a pay TV service is required to access free-to-air digital services. In April 2008, the Australian Communications and Media Authority released data showing that 41.7 per cent of Australian households without subscription TV were able to access free-to-air SD digital services, while that access rate increased to 54 per cent if households with subscription TV were included. (The number of households with SD digital service access that also had access to free-to-air HD digital services was not indicated.) Penetration and usageIn a typical week during 2007, the average Australian adult spent 21 hours and 46 minutes watching television, according to Roy Morgan Research. This was 47 per cent greater than the time spent listening to the radio, 146 per cent more than time spent on the Internet, 545 per cent more than time spent reading newspapers and 1,068 per cent more than time spent reading magazines. The most widely used of all local media, television’s penetration and usage figures are impressive. OzTAM estimates that:
Television’s widespread penetration and power to command large audiences for long periods of time, especially during the prime-time evening period, have enabled the commercial television broadcasters to continue to capture a substantial share of advertising revenues, enabling them to be both extremely influential and financially successful.
Audience fragmentationAlthough still the dominant medium, television’s prominence is impacted by the on-going proliferation of new media and communication platforms and devices, which provide consumers with alternative means of accessing information and entertainment. A report by the Australian Communications and Media Authority indicates the magnitude of the increase in these devices in Australian households with children since 1995 and the changes in usage. Many media and communications platforms and devices that were prevalent in many or most Australian households with children in 2007 either did not exist or had only minimal penetration in 1995, including digital free-to-air television (32 per cent penetration in 2007), subscription television (32 per cent), DVD players (97 per cent), DVD recorders (23 per cent), hard-drive video recorders (13 per cent), portable MP3 and MP4 players (76 per cent) and mobile phones (97 per cent). There is also a second category of platforms and devices whose household penetration increased significantly over that same 12-year period: personal computers (98 per cent penetration in 2007), domestic Internet connections (91 per cent), game consoles (77 per cent) and handheld video games (48 per cent). While none of these individually rival television in terms of penetration and usage, and some (such as DVD recorders and hard-drive video recorders) even facilitate increased television usage, collectively they do represent an impressive array of alternative means by which Australians can access entertainment and information. According to the ACMA research, the aggregate amount of time spent by children viewing free-to-air television, subscription television and video combined actually increased by 12 per cent between 1995 and 2007, indicating that the growth in new platforms and devices led to an overall increase in media usage. Viewing free-to-air television still accounted for the greatest usage of discretionary time by Australian children in 2007: 87 minutes per day or 30 per cent. However, this was 26 per cent less than in 1995, with children redirecting a considerable amount of time to watching subscription television and spending increased time viewing video (DVD and VHS). This shift in behaviour highlights the challenges that television is likely to face in the future as the availability of alternatives continues to expand.
OwnershipFree-to-air TV ownership is highly concentrated and regulated. In 2008, the 55 commercial television licences issued by the Australian Government are owned by just seven groups. The groups (by audience size and revenue) are:
There has been considerable upheaval since new ownership regulations were enacted in late 2006, with changes to the ownership of 27 licences occurring in the ensuing months. These laws, which came into effect in April 2007, liberalised cross-media ownership restrictions that had been in place since 1987. It is now possible, subject to certain conditions, to own two of the following in any given market: a commercial television licence and/or a commercial radio licence and/or a mass circulation daily newspaper. The legislative changes also mean that, for the first time, foreign entities are allowed to have controlling interests in Australian commercial television licences. As a result, the corporate entities that control the Nine and Ten networks now have majority foreign ownership while the Seven network has a foreign co-owner who holds a 47.3 per cent equity interest.
History and backgroundTelevision began broadcasting in Australia in 1956. From the outset, the television industry in Australia operated as a dual system modelled on the previously established radio broadcasting system, comprising privately owned commercial stations which carried advertising, and a Federal Government-owned and funded non-commercial national service free of advertising. Initially, two commercial television licences per city were awarded in the metropolitan markets of Sydney and Melbourne in 1955 and in Brisbane and Adelaide in 1957, while a single commercial licence was granted in Perth in 1958. Each of those initial nine commercial services was in operation by 1960, as was the non-commercial service operated by what is now known as the Australian Broadcasting Corporation (ABC). During 1964 and 1965, licences were granted and operations began for a third commercial television service in Sydney, Melbourne, Brisbane and Adelaide and for a second commercial service in Perth. Since then, the only new commercial metropolitan television licence to be issued in a metropolitan market was in Perth, for a third commercial service, which was licensed in 1988. Until digital switchover, which is now expected to occur by the end of 2013, there is a moratorium in place on the issuing of more than three commercial analog licences in any market. In regional areas, broadcasting of one commercial service and one ABC service started in 1961. From early 1989 the number of commercial services available in larger regional markets was progressively increased from one to three, as the government’s television market aggregation policy was gradually implemented across most parts of the four eastern states. Since the late 1990s, licences for second commercial television services were issued in most smaller regional and remote markets. From the start of 2001, commercial television broadcasters in certain regional markets with two commercial services were allowed to apply, either separately or together, to provide a third commercial digital-only service in their respective markets. The first of these new digital services was issued in November 2002 for the state of Tasmania. Similar digital-only licences have subsequently been issued for the markets of Mildura and Darwin. Each of these separately licensed services transmit in a standard-definition (SD) digital format and carry programming from the main analog services of one or more of the three commercial networks. Non-commercial multicultural television broadcasting by the Special Broadcasting Service Corporation (SBS) commenced in Sydney and Melbourne in 1980 and five years later in the other three metropolitan markets. Since then, SBS has been progressively rolled out into regional and rural areas so that it is now accessible by most Australian households. The network has been allowed to carry up to five minutes per hour of advertising or sponsorship since early 1992. Community television began in early 1993 when non-commercial broadcasting licences were awarded to two community-based groups to operate a public television service in Sydney and Melbourne on a renewable trial basis. Similar licences were subsequently issued in other markets. In 2004, the Australian Broadcasting Authority (ABA) began issuing permanent community television licences. Digital television broadcasting commenced in Australia in January 2001, initially in the metropolitan markets and then progressively in regional markets. The original intention was for the five free-to-air networks to simulcast a digital transmission of their existing analog services for a period of at least eight years, after which time they were to hand back the spectrum that had been used for their analog services. However, that policy was subsequently amended, initially to allow the ABC and SBS, and later also the three commercial networks, to also broadcast either unique digital-only or time-shifted analog programming on their respective digital services. SBS’s digital service (SBS World News Channel) started broadcasting in June 2002, while the current SD digital service of the ABC, which was re-branded as ABC2 in February 2008, started broadcasting in March 2005. The high-definition (HD) digital services of the commercial networks began broadcasting in September 2007 (7HD), December 2007 (Ten-HD) and March 2008 (Nine HD). From January 2009, the three commercial networks and their regional affiliates will be allowed to transmit a second digital service in SD format, as is already done by the ABC and SBS. In December 2007, the Federal Government announced its intention to have completed the shutdown of existing analog television services by the end of 2013.
Markets and network affiliationsAs national broadcasters, the ABC and SBS are authorised to provide their respective services throughout the country to as many Australians as possible. In contrast, the commercial and community broadcasters are limited by licence: to only provide their respective services to certain designated television markets; to only provide one analog service in any given market; and to only own as many television licences which in total will give them a potential national population reach of less than 75 per cent. They must, therefore, rely on affiliates to carry their services in other markets in order to achieve a national reach. At present there are 23 designated commercial television markets. No market is allowed to have more than three analog commercial services and many smaller regional markets have only one or two such analog commercial services. The 23 markets comprise:
Each of these 55 licensed commercial services source all, or almost all, of their programming from one or more of the three commercial networks (Seven, Nine and Ten). Network arrangements for the shared production, acquisition and distribution of programming among various commercial metropolitan stations in different markets were formed at an early stage in television’s development in Australia. In fact, although the ownership of each of the metropolitan television licences has changed at least once over the years, the network affiliations of most metropolitan stations has remained the same since the mid-1960s. The network affiliations of the current owners are:
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