The Australian Television Industry

Introduction:

The Television Industry has been running now for the last 49 years, it consists of 5 free-to-air television stations (ABC, Seven Network, Nine Network, Ten Network and SBS) and 3 pay-tv stations. Two of the five free-to-air networks are government funded (ABC and SBS). All free-to-air stations are based in every capital city in Australia. All free-to-air stations cover all of Australia, some rural areas have local television stations as well as nation wide stations. This report will cover the television industry of both Free-to-air and Pay TV.

Market Structure:

The Television Industry is a large industry in Australia. It has contributed $1.2 Billion to the Australian economy and employed more than 20,000 people. (http://www.aftrs.edu.au) It is not as big as the cinema industry but it's getting closer. There are two kinds of television in Australia, free-to-air and pay TV. There are 5 major free-to-air television stations but two are government funded. In some parts of Australia there is also local television featuring local programs eg. Briz 31. The pay TV industry is growing rapidly with a far variation of channels for viewers to choose from. The first pay TV company to enter Australia was Foxtel when it came in 1995. Other major contenders are Optus and Austar. Previously these different companies had their own channels and they were competing against each other. But Foxtel by far had the best movie channels and sport channels. Then recently the ACCC (Australian Competition and Consumer Commission) gave the approval of 'channel sharing' between players. (http://www.afc.gov.au) This made all pay TV companies share their channels so it would be a fair market. Foxtel is the largest subscription television operator in Australia closely followed by Austar and then Optus TV. Pay TV stations does not cover all of Australia as some companies fight for the rights of particular areas. Eg. Austar bought the rights of the Gold Coast area so now Foxtel can't sell their station in Gold Coast. Now with the introduction of Digital Television this will revolutionise television in Australia all together. Foxtel was the first pay TV provider to have this new technology followed by Austar. Optus TV hasn't got this new technology yet. But it isn't just pay TV that has this technology, free-to-air also has it but viewers have to purchase a set-top box to use this new technology free of charge.

Free-to-air stations:

* ABC - Government Funded

* Seven Network

* Nine Network

* Ten Network

* SBS - Government Funded

* Briz 31 - Local Television station

Pay TV stations:

* Foxtel

* Optus TV

* Austar

In total there are 24 separate commercial television markets in Australia in 2002/04, and 48 individual television stations. Most Australian commercial television stations are owned by public companies listed on the ASX. The Australian Government is the owner of the ABC and SBS television services.

Free-to-air television

2002/03: Markets and ownership as of June 2003

Ad. revenues ($m) Population ('000s) Ad. revenue

per capita ($) Ownership1 based on

network affiliation

Seven Nine Ten

Metropolitan markets (5 markets and 15 stations)

Sydney 820 4,310 190 SEV PBL TEN

Melbourne 669 4,009 167 SEV PBL TEN

Brisbane 364 2,482 147 SEV PBL TEN

Perth 235 1,546 152 SEV STV TEN

Adelaide 180 1,309 138 SEV SCB TEN

Total metropolitan 2,268 13,656 166

Aggregated regional markets (5 markets and 14 stations)

Northern NSW 150 1,870 80 PRT WSP4 SCB

Queensland 136 1,457 93 SEV WIN SCB

Southern NSW 124 1,333 93 PRT WIN SCB

Victoria 119 1,084 110 PRT WIN SCB

Tasmania 46 477 96 SCB WIN SCB

Total aggregrated regional 575 6,221 92

Other regional markets (14 markets and 19 stations)

Total other regional 91 1,438 63 3 3 3

All markets 2,934 21,315 138

Source: Australian Broadcasting Authority, ACNielsen & ATR Australia

Free-to-air television is coming second to newspapers in terms of share of total advertising expenditure in Australia. It is the preferred media in terms of national advertisers, accounting for 53 per cent of all such advertising. Only recently in 2002 did figures for advertising in pay TV was released, accounting for $67 million that year and $93 million in 2003. (http://www.afc.gov.au)

Television's share of total advertising expenditure compared to other media, 1965-2003

Value ($m)

Free-to-air TV Pay TV Total TV Newspapers Radio Magazines Outdoor Cinema

1965 62 62 122 24 29 22 7

1970 95 95 174 44 49 37 10

1975 207 207 302 66 73 79 14

1980 555 555 658 145 166 140 27

1985 1,128 1,128 1,344 305 265 225 48

1990 1,768 1,768 2,001 429 392 284 26

1995 2,022 2,022 2,560 510 509 254 37

20005 2,746 2,746 3,359 684 836 276 69

2001 2,490 2,490 3,131 695 772 271 64

2002 2,592 67 2,666 3,045 702 789 261 58

2003 2,381 93 2,924 3,251 737 822 297 66

Share (%)

Free-to-air