TV audiences tumble as Netflix effect kicks in

Prime time audiences for traditional television have tumbled almost 5 per cent in the year to date, in the latest evidence that both free-to-air and cable television are under increasing structural pressure from streaming services such as Netflix and YouTube.

The OzTAM figures, obtained by Fairfax Media, will feed fierce debate about how serious the problem is for the sector, which still boasts the biggest share of Australia’s $13 billion advertising market but is becoming increasingly complex to analyse because of the number of devices and screens used to access video content.

“There’s always peaks and troughs of audiences; it’s like the print business,” said Leigh Terry, chief executive of media agency Omnicom Media Group Australia and New Zealand. “There is also now a lot of talk about the audience fragmentation on TV both from a device perspective as well via new commercial models with the emergence of subscription video-on-demand (SVOD).

“The question is, is TV truly under pressure for the first time? The answer is probably yes, it’s certainly happened in other markets.”

OzTAM’s figures show free-to-air viewing is dropping faster among the key advertising youth demographic, with audiences down 14.8 per cent among 16-to-39-year-olds but up by 2.2 per cent in the Plus-55-year demographic. The fall has come despite the launch of three new channels: SBS Food, 9Life and 7Flix. 

Top-rated broadcaster Seven West Media noted that its own primary audience was down only 1.8 per cent across all people and sought to pin much of a 4.3 per cent share fall in total prime time free-to-air viewing on the poor start to the year from rival Nine Entertainment, which issued a shock profit warning in April after the troubled launch of Reno Rumble and poor performances by the touring West Indies cricket team.

“Broadcast television continues to dominate a changing market,” said Angus Ross, Seven’s director of programming. “It is the only effective platform for the delivery of large and engaged audiences to advertisers. We are seeing significant audiences for great content on television, we are delivering our content to our audiences on any device extending and leveraging the strength of our television platform, and that underlines our approach to business.”