In this opinion piece, IBIS World’s Nick Tarrant says with broadcasters paying top dollar for the rights to sports, it will change how we watch it and how we pay for it, too…
On 5 August, the 2016 Summer Olympics kicked off in Rio de Janeiro, Brazil, with Channel Seven reportedly paying around $150 million for the Australian broadcasting rights. Big-ticket sporting events like the Rio Olympics are becoming increasingly important to Australian television broadcasters, as changing viewership patterns and declining advertising revenue force them to rethink their broadcasting strategies.
Unlike other TV staples, such as sitcoms and dramas, sporting events are typically watched live. This provides scope for networks to shore up advertising sales, with Channel Seven expected to generate more than $100 million from its Rio Olympics coverage.
Australian free-to-air television broadcasters have struggled over the past five years, with industry revenue expected to have fallen at an annualised 2.5 per cent over the five years through 2015-16, to total $4.9 billion.
The fragmentation of the media landscape has progressively lowered network ratings, as viewers consume media on a growing array of devices, such as phones, tablets and laptops. This trend has reduced television viewership numbers, with Rio’s opening ceremony watched by just 1.6 million viewers in Australia, the lowest free-to-air Olympics opening ceremony audience since the OzTAM ratings system began.
The expansion of digital mediums has created an oversupply of advertising space, pushing down per-unit television advertising revenue. Digital firms like Google allow advertising firms to directly target consumers based on quantifiable characteristics such as their search history.
Television broadcasters have also faced growing competition from IPTV providers, such as Netflix, and from illegal downloads, which circumnavigate the need for broadcasters altogether. Although the pay television industry has managed to grow at an estimated 1.2 per cent over the past five years, as its subscription revenue has offset declining advertising revenue, the low growth rate reflects the industry’s exposure to many of the same issues facing free-to-air broadcasters.
In response, many free-to-air and pay television networks have focused on obtaining sports broadcasting deals. High profile sporting events like the AFL Grand Final or the Olympics can provide a major boost to network ratings, and the emphasis on watching these events live allows networks to charge a premium for advertising slots.
Live sports can also provide a halo effect for television networks, as the higher viewership during sports events allows the network to cross-promote other upcoming shows, helping them gain a larger audience across other time-slots.
Sporting events are also more difficult to broadcast online than other television programs, due to the emphasis on watching them live. Although Channel Seven has offered both free and subscription-based streaming coverage of the Rio Olympics, its issues have plagued its online services for the first few days of the games, with many users taking to social media to complain about slow download speeds and errors.
Limitations in Australian internet speeds and quality mean that demand can quickly overwhelm online platforms like Channel Seven’s. This means that many viewers end up watching live sports on traditional television networks, boosting ratings.
However, as Australian internet infrastructure improves with the rollout of the NBN over the next four years, the streaming of sports coverage is expected to become more important to network revenue. Subscription-based streaming, such as Channel Seven’s Rio Olympics coverage, is likely to become the norm as both free-to-air and pay television networks attempt to use the appeal of live sports to shore up revenue streams.
Spikes Asia has announced the appointment of Jenny Lau as events director. Based in Singapore, Lau will take overall responsibility for Spikes Asia. Lau (pictured) has worked within the Asia-Pacific advertising industry for more than 20 years and brings a deep understanding of the trends and issues affecting the regional advertising and marketing industry. Lau […]
Global ecommerce and marketplace specialist Pattern has ranked a group of 50 brands selling on Amazon.com.au based on a set of best practice criteria it has developed. Pet brand Zenify topped the ranking in Pattern’s Amazon Australia Benchmarking Report, scoring 82 per cent of the possible marks against a set of criteria designed to measure […]
Fifth Dimension Consulting has announced the expansion of its executive leadership team in response to the organisation’s significant growth over the last 18 months. Lyndall Spooner has moved from the position of managing director to the role of chief executive officer (CEO). As CEO, she will lead Fifth Dimensions’ innovation arm, as well as the […]
GoDaddy Inc. has today announced the Australian launch of GoDaddy Studio, a new content creation tool designed for small and medium businesses to create beautiful visual content for their business for all platforms. Compatible on both iOS and Android mobile apps and desktop, GoDaddy Studio includes thousands of customisable templates and easy-to-use tools, providing small […]
Seismic has announced an expanded New Zealand (NZ) presence to support the transformation of sales and marketing teams, and enable the nation’s employers to focus on upskilling their workforces to overcome a digital skills shortage. The company has also signed NZ-based specialist consultancies, Fresh Perspective Sales (FPS) and Jumping Fox Interactive, as its first two […]
Alex Huntley, Booktopia’s head of customer experience, recently appeared at software company Freshworks’ recent digital CX summit RE:SOLVE. During the summit, Huntley shared his thoughts on future-proofing customer service architecture.Huntley sat down with B&T to discuss Booktopia’s partnership with Freshworks and how it has helped their platform develop. B&T: Why did Booktopia first decide to partner […]
The Edison Agency has made four new appointments in its Sydney office to service the continued growth across key account The Arnott’s Group and the recent appointment to Nestlé Oceania’s strategic packaging design roster. Over the past 12 months, the culmination of strategic and creative work across the Uncle Toby’s brand and continued growth of […]
SCA has announced a new smart speaker experience for the Hit Network, with Tom and Olly’s Guide to Lockdown. A voice-activated way to get inspiration and information on fun activities that can be done at home, the guide is curated to appeal to a wide audience. Smart speaker users will find a range of ideas […]