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Media Mayhem: Bridget Fair – ‘The TV advertising pie is not a magic pudding; if you take revenue out, it doesn’t magically regrow’
A discussion of diabolical challenges and bold solutions for our industry.
These are interesting times, and the challenges faced by Australian marketing and media are frequently diabolical. There is always opportunity in crisis, but rarely a single solution that is easy to see. Many are worried, searching for answers and seeking the guidance of our best thinkers. At Mumbrella, we want to interview industry leaders to understand their insights and learn how they handle the challenges and structure for the future. We hope this can help our industry trade through the storms and reach the best global standards. The point is to engage in expert discussion to inspire our industry.
In this week's Media Mayhem, we chat with Free TV Australia CEO, Bridget Fair.
How is the operating environment impacting your team, clients and partners?
Commercial television broadcasters are operating in a period of significant transformation that requires them to be more agile and innovative in their approach to content creation, audience engagement and advertising strategies. We are living in the era of “peak TV”. Viewers have never had more choice of places to access audio-visual content.
That proliferation of services is bringing more competition for broadcasters than ever before, particularly with SVOD services moving to offer advertising tiers and a shift in viewer behaviour, with more Australians accessing our free universal services over IP.
What changes are you seeing in consumer behaviour and preferences?
The number one change is that Australians want to watch their TV services across multiple platforms. In the past three years we have seen an almost 60% increase in the viewing of BVOD services. And that’s been particularly apparent with genres such as sport where the increase has been even greater. While millions of Australians still access our services through terrestrial signals and using a TV connected to an aerial, many people either choose to watch over our free BVOD apps or no longer have access to an aerial. The growth in connected TVs, younger people preferring to use other devices like phones and people moving into new homes and apartments which are not cabled up for terrestrial TV aerials have driven this change.
But while people are faced with more choices and more platforms to watch them on, more than 20 million Australians still tune in to our linear TV and BVOD services every week. In the rush to focus on all the changes around us, it’s easy to forget that commercial television still reaches more Australians every week than any other platform.
How are you meeting those expectations?
Broadcasters are adapting to these changes through innovation and evolution of their services, through investment in BVOD services, integration of data analytics, addressable TV advertising and enhancing the unparalleled mass reach of commercial television with the ability to target audience segments. We’re making it easier for advertisers to buy our content and our audiences. As an advertiser funded medium, that’s key.
But we are also continuing to do what we do well and that’s deliver more Australian content than any other platform.
When you lift your eyes from the screen to the media and marketing horizon, how are you planning?
Broadcasters are focused on what the TV experience looks like over the next decade and beyond, and how and where will people be watching us. We feel we have a strong future and our major strength is our huge audience base and our proven track record of adaptability whether that’s in delivering the content that millions of Australians want to share together, or ensuring that our content is available and amplified wherever our viewers want us to be across streaming, digital and social.
It’s easy to fixate on all the changes and challenges but one thing we do know is that there is a strong demand from Australians for local media services. Commercial broadcasters spent $1.67 billion on Australian content last year, producing thousands of hours of trusted local news, live and free sport and Australian drama and entertainment programs that bring us together with shared viewing experiences. More than 75% of content on our primary channels is Australian and 87% of all program expenditure is on Australian content. Being the home of local content is our point of difference and we intend to keep that as our central focus.
What proposals for legislative change would you prioritise, or are there areas you would like government assistance on?
Free TV is fully focused on getting the regulatory settings right to position commercial television broadcasters for long term success.
Probably our number one issue is improving the anti-siphoning laws that were passed earlier this year. Global subscription streamers are coming for our local sports and we saw that with Amazon scooping up exclusive World Cup Cricket rights late last year. That’s the future for sports if we don’t get the laws updated to stop our favourite events that we can currently watch for free being put behind a paywall.
The laws passed earlier this year gave a nod to the need to include subscription streaming in the anti-siphoning framework but it is still possible for a streamer to acquire all digital rights exclusively and that’s something we are going to continue to advocate on. I think it would be very sad to live in a country where only those people who can afford it get to watch our great sporting moments like the Matildas campaign, NRL and AFL footy or the Olympics.
Commercial broadcasters are still paying a commercial broadcast tax that was introduced as a five year interim measure in 2017. It’s a huge impost on broadcasters, costing them $46 million every year and it is really just a disguised revenue tax that is a hangover from the licence fee we used to pay. Other countries recognise that their free universal broadcast services are an important public good and that they should be supported not lumbered with onerous licence fees on top of their investment in local content. Our competitors don’t deliver the social goods that commercial television does and they don’t pay these kind of taxes to operate here and neither should we.
Regional broadcasting is under a lot of pressure, with high fixed costs and greater competition to deliver services to people who rely on them more than anyone else. Some specific measures to support regional broadcasting where it is not commercially viable are going to be needed, along the lines of blackspot funding for telecommunications in regional Australia. And it’s probably time to review the ownership and control rules that set limits on the number of licences people can hold.
Designating Meta under the News Media Bargaining Code is something we need to see happen right now and then looking at the Code and working out if additional measures might be necessary on top of the tools already at the Government’s disposal. Social media platforms benefit hugely from the news content that is shared on their services and should be required to pay a fair amount for that content.
One thing we have to get away from is the growing reliance on advertising restrictions as a means of delivering social policy. Commercial television broadcasters are required by legislation to offer a free service that is funded by advertising revenue. The advertising market in Australia is growing but almost all that growth goes to digital platforms like Google and Meta. The TV advertising pie is not a magic pudding – if you take revenue out it doesn’t magically regrow and we have to think about that before deciding that advertising bans are the answer to complex social issues.
What opportunities do you see, and how are you positioning your organisation to exploit them?
All our research tells us that Australians highly value their local free television broadcasting services and consider them part of our way of life here. Our ability to reach all Australians is a massive strength. And while there is great fragmentation, commercial TV is still a touchstone for millions of Australians. We’re a trusted platform that people turn to whether it’s when news is breaking or they want to relax or cheer on their team. We’re still heavily regulated and that means that people feel safe when they watch our services. So if we get the regulatory settings right there’s a great opportunity to harness that support and continue to deliver the trusted, Australian and free programs that people love.
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Neil Griffiths is the Managing Editor of Mumbrella. He joined the company in October 2023.
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