The growth of innovative and alternative distribution methods continues to offer content producersavenues to not only reac...
NBCUniversal, LLC – a vision of the future?           HD services under a non-exclusive satellite                         ...
FOXTEL movie and television content is nowavailable to over 800,000 iQ boxes.                 The report notes that altern...
SPORTS magazine shows, a ‘staff picks’ video      Australia’s First 3D Doco to premiere oncatalogue and extended highlight...
Dedicated network channel for local news           AUSTRALIAand content                                                   ...
report highlighted a second consecutive year                                         •     Facebook has launched a new Spo...
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Media trends Q1 2011

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This Media Trends report explores the current environment in which the subscription television sectors of Australia, the United Kingdom and the United States are operating.

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Transcript of "Media trends Q1 2011"

  1. 1. The growth of innovative and alternative distribution methods continues to offer content producersavenues to not only reach new audiences across multiple devices, but also to interact with audiences;enhancing the viewing experience in new and exciting ways.We can see that media companies continue to diversify through product development, via mergersand acquisitions and by adapting product offerings to acknowledge current market conditions. Thegrowing popularity of applications used for the distribution of and interaction with content is alsoextending the content producer/distributor/consumer relationship.In this report we examine not only current industry developments, but also the regulatory trends thatultimately influence the outcomes of the sector. What we can see is that the popularity of televisioncontinues to parallel the take-up of new products and services. At the same time Governments andregulators are grappling with issues associated with convergence, the protection of intellectualproperty in a digital environment, spectrum re-distribution issues and online distribution trends. reported its findings into the deal in December 2010 and recommended that it be referred to the Competition Commission. The CultureThe media and communications industry Secretary, Jeremy Hunt has yet to take up thiscontinues to embrace technology and diversify option. The European Commission approvedthrough the delivery of content across multiple the acquisition under the EU Mergerdevices in a digital environment. Growth also Regulations in December 2010.remains tied to access to quality content andacknowledgement of economic influences. Virgin Media TV powered by TiVoUNITED KINGDOM Virgin Media has teamed up with TiVo to launch a converged television and broadbandBSkyB surpasses the 10 million subscriber interactive set top box with DVR functionality.milestone but still no decision on takeover Virgin reports that the new box will be available early in 2011.BSkyB has reported strong growth in revenue,profit and cash flow for the half year to 31 UNITED STATESDecember 2010. Revenue was up 15% to£3.2bn, operating profit was up 26% to £520m On-going economic woes result in cuts toand the take-up of HD services increased by entry level cable packages68% year on year. Over the period BSkyBrecorded 140,000 net additions surpassing the With the US economy still struggling and i10 million subscriber milestone. unemployment sitting at around 9%, a number of cable companies have recently taken stepsBSkyB is predicting increased subscriber to meet the needs of cash strappeduptake following the launch of Sky Atlantic consumers by cutting the price of their entrywhich last year obtained exclusive UK rights to level packages. Comcast has cut the cost ofHBO’s entire archive, new HBO programming its entry level package by 25% and Timeand co-production opportunities. Warner has rolled out a TV Essentials package that has been discounted from iiNews Corporation is still awaiting approval of $49.95 to $29.99 across various states.its bid to take full control of BSkyB. OFCOMMedia Trends Q1 2011 February 2011 Page 1
  2. 2. NBCUniversal, LLC – a vision of the future? HD services under a non-exclusive satellite iv agency agreement.The Comcast NBC-Universal merger that wasapproved by the FCC and the Justice FOXTEL available on Telstra T-Box in MayDepartment on 18 January 2011 creates a 2011$30BN media company that combines thelargest cable operator and ISP in the US with Telstra will offer 30 FOXTEL channels streamedNBC Universal, owner of some of some of the to the T-Box from May 2011. The channels willmost valuable television and film content. be streamed unmetered via a BigPond ADSL or cable broadband service in metropolitan areasWhile the deal comes with several where FOXTEL subscription services are alreadyundertakings, it sets the foundations for available. Some of the channels on offer willComcast to fulfil its stated objective to reinvent include FOX8, Discovery, FOX SPORTS Play,how customers interact with their Movie One and Showtime Premiere. Telstraentertainment on TV, online and on mobile reported that there are currently about 120,000devices. An updated Comcast Xfinity iPad app Australian households with a T-Box. As wellallows on-demand viewing and access to live as the 30 channels from FOXTEL,T-Box willcontent with an android app planned for launch soon include on-demand television and catch- vlater in the year. up movies and TV programs.Broadcasting safe from OTT services for the STV continues to assist Digital TVnext ten years SwitchoverA new report from Moody’s Investors Services The latest digital tracker survey reports thatlooking at US television competition has 75% of Australians were watching digitalpredicted that the main reasons that a new channels in Q3 2010. Free to Air (FTA)online model won’t be embraced by the Channel 11 launched in January 2011. STVnetworks or content producers this decade is continues to assist with the digital take-up inbecause of the strength of the economics metropolitan and regional areas throughoutassociated with mass market TV advertising Australia by offering access to 200 digitaland carriage-fee models. The 2020 Vision: channels in SD and HD.U.S. Telecom, Media and Technology reportpredicts that lack of access to programmingand costs associated with sports rights will bethe main barriers to Google and Apple’ssuccess in the OTT area as well as the factthat the distribution of content in a broadcastsense is out of their traditional area of Over the top set top box devices are offeringexpertise. iii consumers new ways to receive content and the gaming consoles are also ramping upAUSTRALIA functionality.New supply deal for Optus and FOXTEL FOXTEL Available Via BroadbandOptus and FOXTEL announced a new supply FOXTEL on Xbox360 launched in Novemberdeal that replaces the previous Content Supply 2010. Australian consumers are now able toAgreement. From February Optus customers watch live TV, catch up TV and orderwill be able to get FOXTEL’s iQHD boxes and individual movies and TV episodes to rentHD channels. Optus will be able to offer without the need for installation or a long termcustomers outside its cable area FOXTEL’s contract via their Xbox360. In addition,Media Trends Q1 2011 February 2011 Page 2
  3. 3. FOXTEL movie and television content is nowavailable to over 800,000 iQ boxes. The report notes that alternatives to the Apple App Store are gaining popularity. TheseBoxee Set Top Box stores include: Android Market, Nokias Ovi Store, Research In Motions (RIMs) AppAt the recent Consumer Electronics Show in World, Microsoft Marketplace and Samsung viithe US, Boxee announced a partnership with Apps.CBS to sell TV episodes through its softwareplatform. In the UK Boxee has commenced One of the first app stores made for TV is thetests with VOD website SeeSaw to offer a Samsung Apps store which recently reportedrange of ad-funded and premium content from that it has reached its two millionth TVthe BBC, Chanel 4 and Five via the STB rather application download globally.than over the web. Samsung has reported that the most popularGaming consoles becoming SmartTV apps downloaded include YouTube,entertainment hubs Hulu Plus, ESPN Next Level, AccuWeather, Google Maps and Texas Holdem.Nielsen research shows while US consumersstill predominantly use their devices for playing The Daily – the reinvention of newspapers?games there is a trend that non-gaming TVand video activities are on the rise, meaning News Corporation launched its first digital onlythat devices are beginning to be considered as newspaper The Daily, a news application‘entertainment hubs’. designed for iPads. While The Daily is available through the Australian iTunes store,Figures indicate that 20% of Wii owners’ time it is a US publication. In the US The Dailyis spent watching VOD and streaming services costs subscribers 99 cents a week and insuch as Netflix, MLB Network and ESPN 3, Australia it costs just over a dollar a week.10% of Xbox owners’ time is spent streamingsubscription services with 9% downloading TV Aussie Channel Apps give viewers morecontent and movies. 9% of PlayStation3owners’ time is spent using the on-demand The Lifestyle FOOD Channel has launched a vifacility and 4% on downloading TV content. Summer Entertaining BlackBerry app that is filled with over 100 recipes and inspiring ideas from some of Australia’s top chefs. The app also includes video, a facility to save shopping viii list ingredients and ‘invite to dinner’ button.From the online launch of the Apple app store BBC Worldwide has recently released anin July 2008 to the announcement last month updated BBC News app, a Top Gear app, athat Apple’s App store had achieved its 10 Teletubbies game app and a Doctor Whobillionth download some two and a half years game app to cater for a diverse audience andlater, the popularity and advancement of the to extend the viewing experience.app continues at apace. National Geographic has recently launched theThe Rise of Apps World Atlas app and the Ultimate Dinopedia app through the iTunes store.Research firm Gartner has predicted thatmobile store app downloads will increase In January 2011 FOX SPORTS launched a117% in 2011 and by more than 1000% from new iPad app that streams FOX SPORTS2010 to 2014 with app store revenue for 2011 News 24/7 live, offers on-demand FOXexpected to exceed $15bn. SPORTS news clips, episodes of FOXMedia Trends Q1 2011 February 2011 Page 3
  4. 4. SPORTS magazine shows, a ‘staff picks’ video Australia’s First 3D Doco to premiere oncatalogue and extended highlight packages. National Geographic ChannelThe app (available through iTunes) has fullscreen optimised video display and a ‘watch Australia’s first 3D documentary to air on ixlater’ function for bookmarking content. television: The Eye 3D will premiere on FOXTEL’s dedicated 3D channel on 22The BBC has launched an iPlayer app for iPad February 2011. National Geographic’s awardand Android devices that allows viewers to winning documentary will take viewers insidewatch live TV, listen to radio and watch catch- the world of the Very Large Telescope (VLT), xup TV. the most powerful telescope in the world, which is situated on the summit of Cerro xii Paranal in Chile’s Atacama Desert. Super Bowl XLV most watched TV program of all time in USOriginal production and exclusive contentdrives programming decisions on STV which The Nielsen Company reported that this year’swill attract viewers to various channels across Super Bowl broke US broadcasting historythe 200 channel offering. when over 100 million people tuned in to watch the Green Bay Packers triumph over theTop 10 STV channels based on share of xiii Pittsburgh Steelers .viewing are FOX8, TV1, The LifeStyleChannel, FOX SPORTS 2, FOX SPORTS 1,Disney Channel, UKTV, Arena, Crime &Investigation Network, and SKY NEWS. Governments continue to grapple with theThe Top 10 channels (combined with their regulatory issues associated with a convergedplus2 channels if existing) receive media and communications environment.approximately 20% share of viewing. FTA While reviews in the UK and Australia willdigital multi-channels on average individually xi address the issues associated withreceive a .4% share of viewing. convergence the increasing importance of managing online distribution and spectrumProgramming continues to develop and shortages are being tackled in the US.embrace social media to further enhance theviewer’s relationship with content. At the same UNITED KINGDOMtime technology continues to offer uniqueexperiences in programming. UK to conduct Communications Act review and publish Green Paper by end ofSpongeBob premieres on Facebook just 2011for fans The UK Culture Secretary, Jeremy HuntIn the US, the new season of the perennial recently announced the Government’schildren’s favourite, SpongeBob SquarePants, intention to conduct a full review of the mediapremiered on Facebook in the US in January. and communications environment, ultimatelySpongeBob’s 16 million Facebook fans were leading to a new Communications Act. Theable to catch the first episode titled review will be conducted throughout the year‘Trenchbillies’ the day before it appeared on and will result in the Government publishing atelevision on the Nickelodeon channel. Green Paper at the end of 2011, setting out xiv the full scope of a new Bill.Media Trends Q1 2011 February 2011 Page 4
  5. 5. Dedicated network channel for local news AUSTRALIAand content Convergence Review draft terms ofHunt also launched a new Action Plan for referenceLocal Media that proposes a new dedicatednetwork channel for the provision of local news Submissions for the draft terms of referenceand content to sit alongside existing public for the DBCDE Convergence Review closedservice broadcasters. on January 28, 2011. The review will be undertaken by a committee of independent experts and the final terms of reference will beOFCOM sets goals for 2011 that focus on released in the first quarter of 2011.convergence Classification ReviewsOFCOM Chief Ed Richards recentlyhighlighted a number of areas of regulatory A Senate committee is currently conducting anfocus in 2011. Richards said that OFCOM inquiry into the Australian film and literaturehad a number of short term goals related to classification scheme with a report due 30three areas, which were copyright in a xviii June 2011.converged on line environment, net neutralityand the re-definition of content regulation in xv The Australian Law Reform Commission hasthe IP video world. been asked to conduct a review of classification taking into consideration changesUNITED STATES in technology, media convergence and the global availability of media content. ProposedControversial Net Neutrality rules xix terms of reference have been released.approvedIn the US the FCC approved the controversialNet Neutrality rules in December 2010. Therules address the broad principles of Connected TV’s offering new revenuetransparency, where fixed and mobile models for advertisersbroadband providers must disclose networkmanagement practises, not block lawful Connected TV’s are offering new streams forcontent, applications or services and not advertisers. In the US Adap.tv is working withunreasonably discriminate in the transmission TV applications company Flingo on a number xviof lawful network traffic. of new advertising strategies. Flingo has developed an application with Warner Bros.Broadcasters encouraged to give up offering consumers with connected TV’sspectrum for wireless services through access to TV series each with a pre-roll advoluntary revenue sharing auctions attached. Another app is a TV Guide that has videos that are supported by direct-responseThe rise in wireless application take-up in the advertisements, where consumers can use theUS is putting pressure on the FCC to free up remote to contact the advertiser by email xxspectrum for those services. In January 2011, rather than remembering phone numbers.Senator John Rockefeller re-introduced a billto give the FCC power to conduct voluntary Australian advertisers tip 6% growth in 2011spectrum auctions of broadcast spectrum.The bill proposes that broadcasters who The annual Starcom MediaVest Group Mediavoluntarily give up spectrum for auction will in Futures survey has revealed that nationalturn share the revenue from the sale of that advertisers predict growth in main media xvii advertising expenditure of 6% for 2011. Thespectrum.Media Trends Q1 2011 February 2011 Page 5
  6. 6. report highlighted a second consecutive year • Facebook has launched a new Sponsoredof strong growth following the grim outlook of Stories feature that will notify friends when2009. The report also shows national people check into a store on Facebookadvertisers predicting that all digital TV Places. xxiadvertising will increase by a total of 9.8%. • DVD rental and video streaming service Netflix passed 20 million US subscribers in 2010. • Ericsson has predicted that mobile• Since its launch in October 2010 BSkyB broadband subscriptions globally are on has announced that 3DTV take up has track to surpass 1 billion in 2011. exceeded expectations with 70,000 3DTV • Research firm companiesandmarkets.com subscribers now taking up the service. reported that the US and South Korea• US ecommerce consulting firm Elastic accounted for 66% of total worldwide Path Software has revealed that 75% of 3DTV sales in 2010. online video viewers are willing to pay for certain content with 40% having paid to access content online in the last year.ENDNOTESi BskyB, http://corporate.sky.com/documents/pdf/latest_results/Interim_Press_Release_1011ii Comcast cuts cost of entry level package by 25 per cent, http://articles.philly.com/2011-01-09/business/27018560_1_cable-industry-comcast-customers-cable-subscribers, 18 November 2010iii Moodys sees broadcast TV safe for the next decade, http://www.rbr.com/media-news/research/moody-s-sees-broadcast-tv-safe-for-the-next-decade.html,3 January 2011iviv Optus and FOXTEL sign new subscription agreements, http://www.foxtel.com.au/about-foxtel/communications/optus-and-foxtel-sign-new-subsciption-agreements-107192.htm, 21 December, 2010v Telstra to Offer Foxtel on T-Box in May 2011, http://www.foxtel.com.au/about-foxtel/communications/telstra-to-offer-foxtel-on-t-box-in-may-2011-114397.htm, 8 February 2011vi Gaming Consoles edge closer to serving as entertainment hubs, Nielsenwire, http://blog.nielsen.com/nielsenwire/online_mobile/game-consoles-edge-closer-to-serving-as-entertainment-hubs/ 15 Dec, 2011vii Gartner says worldwide mobile application store revenue forecast to surpass $15bn by 2011, http://www.gartner.com/it/page.jsp?id=1529214, 26 January2011viii Our Summer Entertaining App is here, http://www.lifestylefood.com.au/quickbites/lifestyle-food-launches-summer-entertaining-mobile-app-for-blackberry, 22 December 2010ix Fox Sports View, a game-changing application for iPad, available at the iTunes store from January 6, http://www.foxsports.com.au/other-sports/fox-sports-view-a-game-changing-application-for-ipad-available-at-the-itunes-store/story-e6frf56c-1225982514551, 5 January 2011x BBC iPlayer app for iPad - review, http://www.guardian.co.uk/media/pda/2011/feb/10/bbc-iplayer-app-ipad-review, 10 February 2011xi OzTAM National, Surveys 1-10 2010 (ex Easter), Total People, STV Channels and FTA DTT channels (Includes Plus2 Channels)xii National Geographic Channel Puts Universe in Focus with Australia’s First 3D Documentary Premiere, http://www.foxtel.com.au/whats-on/foxtel-insider/national-geographic-channel-with-australias-first-3d-documen-114278.htm, 4 Feb 2011xiii Super Bowl XLV Most viewed telecast in US broadcast history, http://blog.nielsen.com/nielsenwire/media_entertainment/super-bowl-xlv-most-viewed-telecast-in-broadcast-history/, 7 February 2011xiv Jeremy Hunt, Oxford Media Convention, http://www.culture.gov.uk/news/ministers_speeches/7726.aspx, 19 January 2011xv Oxford Media Convention, Speech by Ed Richards OFCOM, http://media.ofcom.org.uk/2011/01/24/oxford-media-convention-speech-by-ed-richards/, 24January 2011xvi FCC Net Neutrality http://www.fcc.gov/Daily_Releases/Daily_Business/2010/db1223/FCC-10-201A1.pdfxvii Sen Rockefeller introduces bill on spectrum auctions public safety network, http://technology.greenpromote.biz/sen-rockefeller-introduces-bill-on-spectrum-auctions-public-safety-network/xviii Parliament of Australia, Review into the Australian Film and Literature Classification Scheme,http://www.aph.gov.au/senate/committee/legcon_ctte/classification_board/info.htmxix Australian Law Reform Commission, National Classification Review, http://www.alrc.gov.au/inquiries/national-classification-review, 11 January 2011xx Media Post, Adap.TV Strikes Flingo Deal to Better Monetize TV,http://www.mediapost.com/publications/?fa=Articles.showArticle&art_aid=143423&nid=122929, 24 January 2011xxi Advertisers predict main media expenditure to grow by 6 per cent in 2011,http://accesspr.com.au/index.php/news/673/56/Advertisers-predict-main-media-expenditure-to-grow-by-6-per-cent-in-2011, 7 February2011Media Trends Q1 2011 is created by Infodec www.infodec.com.au for ASTRA www.astra.org.auMedia Trends Q1 2011 February 2011 Page 6

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