ASTRA Media Trends Report Q2 2012


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ASTRA Media Trends Report Q2 2012

  1. 1. June 2012 MEDIA TRENDS – Q2 2012 Over the past quarter there has been a significant change in the Australian subscription TV (STV) environment with the completed merger transaction between FOXTEL and AUSTAR. The new national FOXTEL service is gearing up to roll out organisational and product changes over the coming months. Even with continued economic uncertainty, positive subscriber growth, declining churn and increased ARPU was experienced by cable and satellite broadcasters in the United States (US) and United Kingdom (UK). New digital video recorders and features will create innovative viewer experiences and drive developments in audience engagement. The new TiVo box that will be part of the Virgin Media (UK) offering will allow users to view video from the multichannel subscription service on tablet devices and phones. In Australia, FOXTEL’s offering on Xbox360 is now available with Kinect’s gesture control and the launch of the FOXTEL catch up service, On Demand, also extends the subscriber experience. The upcoming London Olympic Games will see FOXTEL viewers offered 3,200 hours of coverage including 1,100 hours of live coverage during the games. Channel 9 has been granted a trial license to broadcast the Olympics in 3D in several cities. 3D broadcasting will be available in the US via NBC and the BBC in the UK is also offering 3D while ensuring that content is available on PC’s, mobile, tablets and connected TV’s. A number of significant policy and regulatory developments occurred in Australia while the release of the Communications green paper in the UK has been delayed due to the current Leveson inquiry. Nielsen reports that TV continues to hold the majority of viewers’ time and ad spend in the US. A report released by OzTAM in Australia also supports the strength of television by noting that while there has been growth in multiple devices, 96% of all video viewing is still via the conventional TV set. STV DEVELOPMENTS Virgin Media revenue up 2.4% to £1.0bn for Q1 2012 with customer additions and improved churnUNITED KINGDOM Virgin Media reported that financialBSkyB reports Q3 revenue up 5% to £5.1bn performance was in line with expectationsfor the nine months ended 31 March 2012 with revenue up 2.4% to £1.0bn for Q1 2012. Net cable customer additions of 21,200BSkyB reported that revenue grew by 5% reflecting improved churn. Cable ARPU waswhile customer pricing remained steady. up 1.7% to £46.95 and the TiVO customer78,000 net households were added in the base increased by 242,000 to 677,100.ii TiVOfirst 3 months of 2012 bringing total customers now make up 18% of the TV base.households to 10.6m. At 10.1% churn wasslightly lower than the previous year. AUSTRALIA159,000 existing customers also added HDservices to their packages bringing total HD FOXTEL and AUSTAR complete mergercustomers to 4.2 million.i transaction to create national subscription TV service Page 1
  2. 2. June 2012On 25 May 2012 FOXTEL announced that the multichannel subscription service on devicesmerger transaction between FOXTEL and including the iPad and iPhone. The productAUSTAR was complete. The new FOXTEL is similar to EchoStar’s Slingbox but it allowswill service 2.2 million subscriber homes and program downloads to multiple devicesdirectly employ 2,500 people. FOXTEL noted without disrupting living room viewing. Itthat details of organisational and product was reported that Virgin intends to offer thechanges will be made available once service towards the end of 2012.vifinalised. The new national company will becalled FOXTEL.iii Social TV app Zeebox ‘Shout Out’ feature promotes live TV viewing among friendsUNITED STATES The new feature enables viewers to react toTime Warner Q1 2012 revenue increased by what they are seeing on TV by instantly6.4% from Q1 2011 to $5.1bn commenting via Zeebox, Twitter or Facebook. Another new feature includesTime Warner announced that residential group chat that allows groups to discussservices revenues increased 4.1% year on what they are watching via Zeebox. Theyear to $4.4bn. Advertising revenue also company also recently formed aincreased 7.1% to $211 million and other partnership with ShowCaster to deliver liverevenue grew 3.4% to $61m. The acquisition video shows through the Zeebox app.of Insight Communications Company, Inc Zeebox signed a major deal with BskyB inon 29 February 2012 was noted as having a January 2012.viipositive impact of Q1 results.iv AUSTRALIADIRECTV reports first quarter record netadditions of 10% in Q1 2012 In an Australian broadcasting first FOXTEL and Kinect bring gesture control to XboxDIRECTV Latin America has set all-timerecords for gross and net additions with 1.0 Kinect and FOXTEL announced thatmillion and 593,000 respectively in Q1 2012. consumers with Xbox 360’s can nowDIRECTV US added 81,000 new subscribers navigate through the new-look userand churn dropped 6 basis points to 1.44%. interface and locate sports, movies and TVRevenue growth was 12% to $7.05bn driven shows with simple voice commands or theby strong subscriber growth and 3.6% high wave of a hand. Consumers can pause,ARPU at DIRECTV US.v play, fast forward and stop, as well as browse through menu items. FOXTEL is the first broadcaster to provide Australians with DISTRIBUTION TRENDS voice and gesture control.viii FOXTEL catch-up service allows subscribersUNITED KINGDOM to access hundreds of hours of on-demand programmingNew TiVo box that streams to tablets,notebooks and smartphones to be part of The new catch up service will be availableVirgin Media offering to FOXTEL customers who connect their IP connected FOXTEL iQ or iQHD box to theAt the recent Cable Show in the US TiVo internet. Subscribers who connect to theshowcased a new digital video recorder new service will be able to access 50 FOXTELthat enables users to view video from their channels providing content each Page 2
  3. 3. June 2012Programs will be downloaded to a they have teamed up with YouTube andsubscriber’s planner from midnight on the and will stream everyday of broadcast. Once in the planner, the event online for the first time, totaling 5,535program can be watched an unlimited hours of coverage.number of times in a 28-day period. ix Panasonic and the NBC Sports Group willUNITED STATES make 3D coverage of the Olympic Games available to all US distributors who carryIndie VOD service SnagFilms signs deal with Olympic coverage on cable, satellite andiNDemand and Dish Network broadcast.xiiThe SnagFilms deal will put its pay per view NBC Universal has commissioned Googleprogramming service in 90% of the nearly 60 and research company comScore tomillion VOD-capable homes in the US. develop audience measurement tools thatSnagFilms has also signed a deal with Sony’s will measure viewership across broadcast,video portal Crackle and has plans to cable, internet and mobile.xiiilaunch a player app for Vizio smart TV’s. TheVizio deal will expand the earlier release of The BBC (UK) has developed a range ofplayer apps on Sony and Panasonic smart Olympic innovations that mean audiencesTV’s as well as blue-ray player apps.x can view content across PC, mobile, tablet and connected TV’s. Selected highlights will INNOVATION also be available in 3D. Flagship Olympic A FOCUS ON THE 2012 OLYMPICS broadcasting will appear on BBC One and BBC Three and the BBC Sport website will stream live HD video with chapter markersIt is estimated that the London Olympics that enable navigation to key moments.commencing 27 July 2012 will be watched Through the site, audiences will also be ableby a global audience of four billion. The to click and follow every athlete, sport,growth of online and social media that has event and country and receive livefollowed since the Beijing games of 2008 updates, Twitter visualisations andmeans that coverage of the games will also comments across social media.xivextend beyond traditional broadcasting innew and exciting ways. Sky reached an agreement with the BBC that means more than 10 million Sky homesFOXTEL will provide customers with over will receive the BBC channels dedicated live3,200 hours of coverage, including 1,100 coverage of the games. In addition, morehours of live coverage throughout the 17 than 5 million Sky homes with Sky+HD will bedays of the games. Eight new channels will able to watch the games in HD. The 48be available to sports subscribers free of new channels which are being created forcharge in both high definition and standard the Olympics will launch into Sky’s EPGdefinition. For the first time ever FOXTEL enabling viewers to watch 2,500 hours of livesubscribers will be able to see every single BBC coverage throughout the games.xvgold medal event live and in full.xi The International Olympic Committee hasIn the United States NBC has increased its been working with social networkingOlympic coverage by 50 hours more than companies and a tie-in with Foursquare willthe Beijing games. It will broadcast 272.5 encourage users to log visits to stadiums,hours of the London Olympics. In addition, training venues and other areas as a way Page 3
  4. 4. June 2012integrating social media into the Olympic FOXTEL customers will receive two new 24fan experience.xvi hour English language news channels, Al Jazeera and CCTV News. W and TCM willIt has been reported in the Financial Times also move to the FOXTEL Get Startedthat public trials will start this week for package.YouView, the UK’s connected TV platform.This appears to confirm that the platform will UNITED STATESmiss its launch deadline of the London 2012 expands development effortsOlympics.xvii into comedy and children’s series NEW DEVELOPMENTS IN Amazon’s content development division, PROGRAMMING Amazon Studios has invited series creators to upload their proposals for comedy andUNITED KINGDOM children’s programming to Amazon Studios. Each month Amazon Studios intends toBox TV launches the entertainment, news option one promising project and add it toand music channel ‘Heat’ the development slate and test it for audience viability. If the project is pickedBox TV is launching a new celebrity news up the creator will receive a $55,000and music TV channel, which will appear on payment and up to 5% of Amazon’s netSky and Virgin from July 3rd. The launch of receipts from toy and t-shirt licensing andthe channel will see the ‘Heat’ magazine other royalties and bonuses.xixbrand move into broadcasting. Thechannel will reflect the tone of the popularmagazine, website and radio station and itaims to become the number one source of REGULATORY DEVELOPMENTScelebrity entertainment news and music onUK TV.xviii AUSTRALIAAUSTRALIA Convergence Review final report handed toAUSTAR-FOXTEL merger expected to bring Governmentchanges to programing for Australianaudiences The Convergence Review final report was handed to the Australian Government on 30The AUSTAR-FOXTEL merger is expected to March 2012. The review contained abring additional changes to programming number of significant recommendationswith the incorporation of prolific Australian and the Government has indicated thatcontent producer XYZnetworks now they will respond to the report in dueoperating under FOXTEL. course.xxDiscovery Channel, National GeographicChannel, Nat Geo Wild and MTV Live will be Independent Media Inquiry into the Mediaavailable to AUSTAR subscribers in high and Regulation released by Governmentdefinition (HD) for the first time.Eurosportnews is moving into the Starter The Independent Media Inquiry reported toPack and MTV Hits and MTV Live will be Government on 28 February 2012. Theadded to the Fun Option. report was provided to the Convergence Review Committee who Page 4
  5. 5. June 2012considered its findings as part of the The FCC has announced that they willConvergence review. The inquiry support the use of white spaces technologyrecommended the establishment of a for broadband delivery in rural areas. It has‘News Media Council to set journalistic been reported that the plan to utilise the TVstandards for the news media in white spaces are part of the Government’sconsultation with the industry, and handle mandate to connect rural, underservedcomplaints made by the public when those populations, and by the limits of availablestandards are breached.’ Print, radio, wireless spectrum.xxvtelevision and online platforms would beinvolved.xxi ADVERTISINGSubscription TV to increase captioning overnext 3 years Nielsen reports that TV continues to hold theThe Australian Human Rights Commission majority of viewers’ time and ad spendand ASTRA have reached an agreement oncaptioning levels. Captioning will increase Nielsen’s State of the Media: Advertising &over the next 3 years. Some subscription Audiences Report revealed that Americanmovie channels captioning levels will advertisers and consumers continue to turnincrease from 55% to 75%, general to television in terms of media time andentertainment from 35% to 55% and sports advertising dollars. The following pointschannels 5% to 15%.xxii highlight the findings:UNITED KINGDOM • Cable TV spending increased steadily over the past few years up 42% fromOfcom taking applications for local 2007.channels • The automotive industry was the biggest spender at $10.2 billion in 2011 which isOfcom has starting taking applications for more than twice as much as quick-21 local channels that will be launched service restaurants who are the secondacross the UK. The 21 channels cover cities biggest spenders.such as Bristol, Edinburgh, Glasgow, • The average TV commercial in 2011 wasManchester, Leeds and Birmingham. 28.4 seconds.xxviApplications close on 13 August with thewinners announced later in the year.xxiii MultiChannel Network (MCN) launches interactive AFL POWERADE pollRelease of Communications green paperdelayed MCN have launched a new interactive voting poll that allows AFL fans to share theirIt has been reported that plans to release a opinions LIVE during selected SaturdayCommunications Green paper have been matches on FOX FOOTY. Initiated by MCN,delayed to allow for Jeremy Hunt, the UK the POWERADE POLL is a first for FOX FOOTYculture secretary to give evidence to the and POWERADE. AFL fans are able toLeveson inquiry into media ethics.xxiv access the voting poll via their iPhone, Android, tablet or PC atUNITED STATES changes rules about TV white Page 5
  6. 6. June 2012 TIPS & TRENDS Viewing on conventional TV’s is strong with time spent rising 1.2% year on year.xxxi• NBCUniversal and CBS have filed separate federal lawsuits against Dish • It has been reported that Australian Network. They joined Fox in claiming the ISP Primus plans to offer an IPTV new ‘AutoHop’ digital recorder released service in the coming months.xxxii by Dish infringes on their copyrights by deleting their commercials.xxviii • The ACMA has given approval for a trial license for Channel 9 to• ABI Research has reported that by 2014 broadcast the Olympics in 3D in global shipments of core home Adelaide, Brisbane, Gold Coast, networking equipment will exceed 1 Melbourne, Perth and Sydney from billion units.xxix 16 July 2012.• The BBC iPlayer application will shortly • Cisco has released a report that launch on Microsoft’s platform. predicts there will be 1.5bn viewers of online video by 2016, up from 792mn in 2011. The report also• The reality series King Cross ER has been sold to the US Discovery Channel. predicts that by 2016 video traffic via the TV will account for over 6• Samsung will produce a SmartTV with an percent of global consumer Internet in-built FOXTEL app which can be traffic.xxxiii accessed for movies, sports, and television from the Foxtel service, via The Media Trends Report is created by• OzTAM , Nielsen and Regional Tam’s Multi-Screen Report for Q1 reports that an estimated 15% of Australian households now own at least one tablet device. Viewing of any video on PCs, smartphones and tablets is rapidly growing but 96% of all video For ASTRA viewing is still via the conventional TV Page 6
  7. 7. June 2012SOURCESi Page 7