Recently Crikey looked at the lack of disclosure by the Subscription TV
industry about viewing, this week Crikey aids the information flow. And a feisty Foxtel insider responds below.
A recent Media section in The Australian, which is published by News
Ltd, the owner of 25 per cent of Foxtel, had a long story on how Pay
TV’s advertising revenue was rising, up from $67 million in 2002, to
$93 million last year. “Pay TV ads pack a powerful punch” screamed the
headline.

Well, seeing it was a News Ltd paper, Mandy Rice Davies’ observation
springs to mind of that “they would say that, wouldn’t they”. But how
did the reporter know that the punch was powerful? Not a mention of
viewing numbers of any sort in the article. As Crikey observed last
week, there’s a real dearth of information about who watches PAY TV’s
many channels – Pay-TV’s performance gap

Foxtel and its spokespeople, from CEO Kim Williams down, remain coy
about just how many subscribers the Pay TV group has, how many these
are switching from analogue to the new digital service, and how many
actual new subscribers are being signed up.

Compared to the amount of information about Free to Air (FTA) watching
patterns, Pay remains a black hole, emitting very little light or
information and as a result comparisons are hard to make. Well Crikey
can help. The numbers are out there, not actual bums on seats at home
watching (hopefully some kind soul will read this and fill this gap in
Crikey’s knowledge) but share points for the various Pay TV channels
and overall share figures for subscription TV and FTA.

Oztam, the ratings group, provide five city metro share figures for the
FTA and Subscription TV (STV). So far this year among the FTA Networks,
there’s been a small shift in market share with Nine losing some
ground. But while Ten has had good gains, SBS has seen the biggest rise
in its share.

For Pay TV, the numbers show it more popular during the day but suffers
a significant turn off from 6pm onwards when prime time viewing starts
on the FTA networks. That’s a significant development as Foxtel would
have us believe that Pay TV is a significant alternative at all times
to FTA.

It isn’t and the turn off is a ‘death’ trait for any program or
network, especially in the peak night viewing period. What Pay TV’s
spinners don’t say is that to suffer a turn-off in the highest viewing
period of the day is tantamount to admitting that viewers want to see
the FTA programs which are often first run local and imported product.

And the ban on “the siphoning” of popular sports programs would be a
factor, but not as important to regular viewing habits as Foxtel would
have us believe. It is significant to Foxtel however because it
prevents the use of popular live sports programming as a driver to
gather up and maintain subscriptions. That’s what happens in Britain
with News Corp associate, Sky.

The Oztam numbers also show that Pay TV’s share is highest in Sydney,
followed by Melbourne and then Brisbane, Adelaide and Perth. Crikey has
not yet seen the regional Oztam figures. The turn off also happens in
all major metro markets.

So look first at the 18-hour period from 6am to 11.59 pm. So far this
year Oztam says Pay TV’s share has gone from an average of 13.9 per
cent in the first survey, to 12.4 per cent in Survey Four which started
on May 16. FTA’s share has risen, from 86.1 per cent to 87.7 per
cent. In Sydney in the same period Pay TV’s share of all viewing
has eased from 16.1 per cent to 14.7 per cent. FTA’s share has risen.
In Melbourne a similar story, but in Brisbane Pay’s share is up and the
FTA share is down.

When you get to Adelaide and Perth, the FTA habit is strongest. In the
South Australian capital for example, FTA’s share has risen from 89.3
per cent to 90.3 per cent in the first week of Survey Four, according
to Oztam. Pay’s share has sunk from 10.7 per cent to 9.7 per cent, a
sharp fall.

In Perth Pay’s share has fallen sharply, from a 10 per cent average in
the first survey to only 6.3 per cent in the first week of Survey four.
In contrast FTA’s share rose to 93.7 per cent the highest share in the
five major cities. Pay’s share in Perth was the lowest for the 18-hour
period.

But look at the changes in the 6pm to 11.59pm period, the prime time
period where the FTA networks compete so strongly. Nationally Pay TV’s
share this year averaged 9.9 per cent in Survey One1, then eased to 8.9
per cent by the first week of Survey Four. Compared to the 18 period,
those figures are about a third lower. The National FTA share is higher
at just over 91 per cent.

Looking at the Pay share in Sydney in the 6pm to 11.59pm period,
there’s a smaller drop-off, from 12.5 per cent to 11.5 per cent, in
Melbourne its from 9.8 per cent to 8.4 per cent, in Adelaide, 7.9 per
cent to 7.5 per cent and Perth, from 6.1 per cent to 4.5 per cent. In
Brisbane there’s no change, 10 per cent in Survey One and the same
share at the start of Survey Four.

But if you look at Oztam’s figures which breakdown Pay TV into channels
on the same basis as the FTA Networks, there’s an even greater contrast.

In the week May 16 to May 22 for the prime time of 6pm to 11.59pm for
the five city metro markets, ABC had a 15.3 per cent share, Seven, 21.8
per cent, Nine, 25 per cent, Ten, 21.6 per cent and SBS 4.7 per cent.

Of the 31 Pay TV channels measured individually and reported by Oztam,
not one reached a one per cent share, the highest being Fox 8 and TV 1
with a 0.6 per cent share, followed by Fox Sports One and Two,
Lifestyle Showtime, UK TV with a half a per cent share. Looking at the
18 hour period, from 6am to 11.59pm and the picture is a little better
for Pay, confirming that viewing is higher during the non- prime time
periods during the day.

In the 18 hours the top rating Pay channels were Fox 8 with a 0.9 per
cent share, followed by TV 1 with a 0.8 per cent share. Interestingly
Disney had a rating during this period of 0.6 per cent, which is when
lots of younger children who are not at school, might be watching. FTA
share is lower in this period with Nine the loser, down to 23.5 per
cent from 25 per cent, ABC, Ten, and Seven lose a smidge, but that’s
all. SBS drops sharply as well.

Another interesting point is that looking solely at the share of the
FTA networks in the year so far, there’s a definite drop in the Nine
Network’s share, down from 27.4 per cent share in the first period to
25 per cent in the first week of week four. Seven’s has edged up a
touch from 21.4 per cent to 21.8 per cent, the ABC recorded a small
gain, up from 15 per cent to 15.3 per cent, while the big gains were
made by Ten, up from 20 per cent to 21.6 per cent and SBS, up from 3.7
per cent to 4.7 per cent, which, proportionally is the biggest gain of
all.

In defence of Pay TV

A feisty Foxtel insider responds:

Your
TV critic “Terry Television” is a bloke with a terrific name, but he
looks silly wearing those blinkers supplied by his mates at the
commercial TV networks.

First
of all, he parrots a report by another media organization that claims
FOXTEL won’t report the split between new and existing customers on its
digital service.

The fact is, FOXTEL’s new subscriber count
will be provided to the market, as always, by the FOXTEL shareholders
as part of their regular quarterly reporting to the ASX. It’s just that
the timetable will be on that regular quarterly schedule, and not when
individual members of the media demand it.

That Terry lives on
the free-to-air side of town, lovely as it is, is demonstrated by the
fact that he fails to understand that subscription TV measures its
success primarily by subscriptions which deliver 95% of revenue, not
ratings. In any event, there is no “black hole” on subscription TV
ratings. We are part of the OzTAM measurement system set up by the
commercial networks and there are no secrets.

FOXTEL’s entire
service is open 24 hours a day, seven days a week, every week – that’s
the service our customers want and subscribe for. We aim to provide
satisfaction over all those time zones and throughout the year. It
matters not to us that our viewing is spread across the many channels
we provide like all the colours of the spectrum.

And consumers
have responded – time spent viewing subscription TV rose by 19% from
2001-2003, while time spent viewing terrestrial networks fell by 6%
over the same period.

The commercial networks want the world
to stay focused on their narrow notions of “prime time” and “ratings
periods” that conveniently ignore daytime, weekends, and holiday
periods. Unfortunately for them, the market is waking up to the fact
that the TV world is not flat.

If the networks really thought
consumers only wanted to watch in “prime time”, they would turn their
signals to black outside the 6.00pm to 10.30pm timeslot and go to the
pub. Consumers want to watch their choice of TV any time of the day,
any day of the week. In fact the networks’ own measurement system OzTAM
operates 24/7.

By this all-day measure, subscription TV has
just recorded the longest sustained period of more than 50% monthly
shares of viewing in subscription TV homes in the industry’s history –
6 months in a row from the month of December 2003 through to the end of
May 2004.

FOXTEL is not just in the TV market space but in the
general entertainment market (competing with free-to-air TV, cinema,
video/DVD rentals) and is competing for eyeballs and available leisure
and recreational spend. Terry and his mates are spending increasing
time and energy trying to compare us with their apples, oranges and
other free-to-air turkeys. They appear very sweaty about their future.

Peter Fray

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