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Appendix C: The Changing Digital Environment

The technology of broadcasting and media in Australia is undergoing significant changes as television and radio services move to a digital footing and internet penetration continues to grow. National broadcasters will face opportunities and challenges from these changes, as will broadcasters generally across the globe.

Much has been written elsewhere about these changes. This appendix provides a brief overview to set the scene for the future operating environment for the national broadcasters.

Digital TV

The ABC and SBS are extending their digital television services to provide the same coverage as their analog services, along with the other free-to-air broadcasters. The Australian Government has announced that analog signals will be switched off by the end of 201336 and has implemented a package of funding and initiatives to drive a smooth transition.37 To the end of 2007, 42 per cent of Australian households had taken up free-to-air digital television, up from 13 per cent in 2005.38 When combined with viewers of free-to-air services through subscription television services, an estimated 54 per cent of households receive digital free-to-air television services.
Broadband

Expanding the reach and take-up of broadband will be critical as Australia makes the transition to a digital economy. This is a key policy priority for the Australian Government, which has committed up to $4.7 billion to support the rollout of a high-speed broadband network planned to deliver minimum download speeds of 12 megabits per second to 98 per cent of Australian homes and businesses. Sixty-four per cent of Australian households were internet-enabled in 2006-07five fold increase in 10 yearsand more than two-thirds of these connections were broadband (43 per cent of total households).39
Subscription TV

Subscription television services have established their profitability and all providers are now operating on fully digital platforms. The number of Australian households subscribed to subscription TV services rose from 11 per cent in 1997 to 27 per cent in 2007.40
Digital radio

Although it will be introduced as a supplement to FM and AM services, digital radio is scheduled to commence in the mainland state capital cities by 1 July 2009. The ABC and SBS will be part of this change.

 

This diffusion of digital technology is affecting the viewing and listening habits of Australian audiences.

  • Australians are spending increasing amounts of time online, while audiences for free-to-air television are slowly but surely declining. Although advertising revenues have generally remained resilient, the average audience for free-to-air television declined from 2 million to 1.9 million between 2001 and 2006, and for commercial television from 1.6 million to 1.5 million over the same period.41
  • In part, this decline is a factor of substitution as audiences shift to alternative viewing and listening platforms. As reflected in Figure 8, an AC Neilsen survey has found that, for the first time, the amount of time Australians spent online in 2007 surpassed the amount of time spent watching television. However, despite these changes, free-to-air television remains a major source of information and entertainment for Australians.

Figure 8: Media consumption: Internet vs. TV (hours per person per activity), 2005-07

Figure 8: Media consumption: Internet vs. TV - text vesrion follows

Figure 8: Media consumption: Internet vs. TV (hours per person per activity), 2005-07

Source: AC Neilsen, Australian Internet and Technology Report 200607, 18 March 2008.

  • Digital media players (which include MP3 players and iPods) have affected the way music and audio programming is distributed and consumed. In 2007, Australians purchased almost 2.6 million digital media players to reach a penetration rate equivalent to one player for every 2.2 adults.42 Audience downloads have matched technology take-up. The ABC alone had registered just under 2.4 million downloads of podcast files each month by June 2007.43
  • Australian audiences are using devices with recording and storage functions to 'time-shift' their viewing of existing television programming. A recent survey commissioned by the Australian Communications and Media Authority found that close to 40 per cent of households with digital television had used a DVD recorder, hard drive recorder, VCR, Foxtel iQ or other device to record a digital free-to-air program.44
  • Sales of digital viewing and listening devices have displayed steady growth over the past five years, particularly in flat panel television, games consoles, and media players.45

These technology and audience changes are part of an ongoing move towards a converged media and communication environment.

At full potential, this could see audiences seeking out and consuming programming on-demand over internet protocol networks, creating their own 'channels' rather than adhering to schedules, or simply time-shifting programmed content. Extensive access to past archives of programs would be possible, and there would be greater interactivity between households, program-makers and the commercial suppliers of products.46

The sheer pace of technology change makes it difficult to gauge what the media and broadcasting industry might look like in just over a decade's time. Different social, cultural and economic groups in Australia will embrace digital technologies at differing rates and in differing ways, which itself raises access and equity issues. Audience fragmentation is a feature of a multichannel environment, as viewers and listeners migrate from 'main' channels to newer alternatives.

The transition to a multichannel digital television environment in Australia is gathering momentum.

  • Subscription television has, since its commencement in 1995, provided specialised programming with both broad and narrow appeal, and the diversity of digital channels and interactive services offered continues to expand.
  • The ABC and SBS provide digital-only services and have expressed a desire to expand their suite of channels. Australia's free-to-air commercial broadcastersNetworks Seven, Nine and Teneach provide a high-definition multichannel47 and from 2009 they will have the option of each providing an additional standard definition multichannel.
  • Digital radio services to be launched by 1 July 2009 will provide scope for an expanded range of radio services.

All these trends provide significant opportunities for the national broadcasters, and will have an impact on the way they develop programming, deliver and transmit services and interact with their audiences. They will need to invest in new capital equipment, meet the ever-growing demand for new quality content, find ways of effectively reusing archived material, and respond to the increase in competition for people's time from new players and delivery platforms.

The ABC and SBS are well placed to expand into the digital future, and in some instances are ahead of their commercial rivals. By 2020, the national broadcasters will probably look quite different. Theyand Governmentface important choices as they determine their future directions and pursue their mandates across multiple platforms.

Footnotes

  1. Senator Stephen Conroy, Minister for Broadband, Communications and the Digital Economy, Digital Switchover Date Confirmed, media release, 18 December 2007.
  2. Senator Stephen Conroy, Minister for Broadband, Communications and the Digital Economy, Government Launches $37.9 Million Strategy to Boost Digital TV, media release,
    26 March 2008.
  3. Eureka Strategic Research, Digital Television in Australian Homes2007, conducted for the Australian Communications and Media Authority, February 2008.
  4. Australian Bureau of Statistics, Household Use of Information Technology 2006-07, cat. no. 8146.0, 20 December 2007. The ABS defines broadband as an 'always on' internet connection with an access speed equal to or greater than 256 kilobits per second (Kbps).
  5. ABN AMRO Equities Australia Ltd, Pay TV in Focus, 11 January 2008.
  6. Australian Communications and Media Authority, Communications Report 2006-07, Canberra, April 2008.
  7. GfK Marketing Research, Canon Digital Lifestyle Index: Second Half 2007, February 2008.
  8. Australian Broadcasting Corporation, Annual Report 2007.
  9. Eureka Strategic Research, Digital Television in Australian Homes2007, conducted for the Australian Communications and Media Authority, February 2008.
  10. GfK Marketing Research, Canon Digital Lifestyle Index: Second Half 2007, February 2008.
  11. G Davies, The Future Funding of the BBC: Report of the Independent Review Panel, UK Department of Culture, Media and Sport, July 1999.
  12. This follows the removal of the simulcast requirement on high definition programming in 2006.
 
Document ID: 87669 | Last modified: 26 May 2011, 10:01am