Sports and the future of (free to air) television

Channel 10 announced yesterday that their HD channel would be a 24 hour sports channel, to be named ONE. Report in The Australian HERE.

It will feature “less advertising” than TEN.

TEN Head of Sport David White said “Live and exclusive will be a hallmark of the channel”.

Sports on the anti-siphoning list can only be shown on ONE AFTER or SIMULTANEOUSLY with broadcast on TEN

Ten owns rights to swimming, netball, Indian Premier League (20/20) cricket, and jointly owns AFL and Commonwealth Games. ABC reports TEN also owns rights to US NBA basketball and major league baseball matches, the US Open golf and tennis championships, the US Masters golf, and Formula One and Nascar motor racing.

Rivals are keen to say they are not concerned. John Porter (Austar) told analysts and journalists yesterday (reported in The West Australian HERE):

“I don’t consider the Ten sports initiative to have any impact on our commercial business, nor on our core business,” Mr Porter said during a telephone briefing with analysts and journalists.

“It in no way approximates the sports offering that Fox Sports delivers and ESPN, Setanta Sports and Fox Sports News – the six or seven sports channels that we offer.”

Little bit of a worry that he doesn’t know exactly how many sports channels Austar offers…

Fox Sports chief operating officer Jon Marquand was dismissive, quoted in Australian article as saying “I don’t think there’s much new there if you look at the content”. This is slightly disingenuous, given that a large proportion of the ONE content will be live or recorded live (and therefore ‘new’ in the sense of not having happened yet and never seen before).

We can expect to see a lot (more) sport on television as HD comes in.

There are currently 11 sports channels available on subscription television (Fox Sports 1,2,3 and Fox Sports News, ESPN, TVN, Sky Racing, FUEL TV, Setanta, Eurosports, National Geographic Adventure). ABC2 has started broadcasting WNBL matches live on Friday nights. ABC1 screens bowls, the WNBL and the W-League (Women’s football). On Sunday last, various kinds of motor sport were on channels 7, 10 and SBS simultaneously. Sunday afternoons on SBS is motor sport and football (the round ball game).

Given the popularity of their paralympics coverage, it wouldn’t be a surprise to see the ABC cover sports like wheelchair rugby and wheelchair basketball.

Sports are critical programming for the commercial free to air television broadcasters, one of the few guaranteed ‘audience massers’. And if stats from the AFC are anything to go by, this importance has only increased in the last five years:

(All references to FTA)

  • In 2007, the top 6 programs for the year were all sports, 13 of the top 20, and 8 of the 11 drawing over 2 million viewers
  • In 2006, 4 of the top 5 (including no.1), 7 of the top 10, 13 of the top 20
  • In 2005, the top 9 programs for the year were all sports, 11 of the top 20
  • In 2004, highest rating sports program was no.3 for the year, 3 of top 10, 4 of top 20
  • In 2003, 5 of the top 10 (including no.1), 5 of the top 10, 5 of the top 20
  • In 2002, highest rating sports program was no.2, 4 of top 10, 6 of top 20
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Advertising spend in UK – new stats

Advertising: Internet Advertising Bureau/PWC/World Advertising Research Centre stats show internet ad spend up significantly in UK as overall ad market shrinks slightly. Search advertising is still majority (981 million pounds out of 1.68 billion total internet ad spend for Jan-June 08).

Story by Mark Sweney in The Guardian 7 October HERE

Internet advertising spend is “propping up” traditional media, according to a report, surging 21% year on year to £1.68bn in the first six months of 2008.

The resilience of internet ad spend in the downturn turned what would have been a 4.6% year-on-year decline in UK advertising spend in the first half to a slide of just 0.7%, according to the study by the Interactive Advertising Bureau and PricewaterhouseCoopers.

In this study, internet ad share of total market is 18.7% compared to TV advertising at 21.7%.

Compare with USA – see this CHART of stats for June 08 which shows TV (combined local, cable and network) taking around 60% of market, while internet at under 7%.

And compare with China where KPMG report predicts 40% growth of internet ads next year, to $5.2bn out of total ad market of $37.85bn, see Mark Sweney’s story in the Guardian 22 October 2008 HERE.

The same KPMG report sees opportunities in television content for international coproductions with Chinese producers

KPMG also forecasts that China’s huge TV market – 1.19 billion TV viewers over the age of four and one-third of the global cable TV market, which accounts for more than 60% of the country’s media spend – also presents opportunities for western companies.

“Content generation represents a big opportunity. Chinese TV producers are increasingly likely to need to look outside China to secure appropriate content and programme formats for different channels,” Honson said.

In late September Mark Sweney wrote about the downturn in ad spend in UK and predictions of a ‘horror show’ for media companies in 2009.

This puts into perspective Sir Michael Grade’s comments about ITV giving up its public service broadcasting remit, as reported by Andy last week.

Noting the announcement this week of the review of the public broadcasters here in Australia, could it be that the relative size and importance of the ABC and SBS may grow significantly if, as some predict, there will be a decline in the commercial television advertising market which might (given James Packer’s to get out of Channel 9 this week) hasten the demise of the commercial FTA/network system?

Margaret Simons’ overview of the issues around the PSB review is HERE at a new website Inside Story, the brainchild of Peter Browne (Australian Policy Online and Creative Economy) and the Institute of Social Research at Swinburne University. Perhaps here at Inside Story is one answer to what will happen to quality journalism.

Digital Dividend: Reding proposes “fair play” “50:50” split between broadcasters and new users

In a speech to the ComReg conference in Dublin on 1 October 2008, EU Commissioner for Information Society and Media, Viviane Reding, makes a strong case for the use of the ‘digital dividend’ – the spectrum that will be freed up by the transition to digital broadcasting, and by technological developments – to deliver wireless broadband services. There are considerable economic, social and cultural advantages of making this spectrum available for wireless broadband. As Commissioner Reding observes:

these UHF bandwidths are in the most valuable range, with very high propagation characteristics which, simply put means that the costs of rolling out new networks will be lower, the reception quality will be very, very good and we can use fewer and lower power transmitters, which is better for energy saving, lowering electro magnetic radiation and reducing unsightly radio masts.

The gains are not just in the economy. There are also many applications that will be crucial for public services. I give you an example: public safety services (such as fire or ambulance or flood prevention) are very often using fragmented bandwidths and old analogue technologies. They rarely have the bandwidth they need to set up mobile broadband services for teams facing natural disasters or terrorist threats. The communication systems are often poorly integrated between agencies especially cross-border and remember: natural disasters do not necessarily respect human made boundaries. The digital dividend provides an opportunity to build these crucial first response teams with a state-of-the-art infrastructure to meet our needs in times of crisis. Can we afford to pass up this chance?

Let me give you another example – highly relevant to Ireland. I have read with interest the Irish government’s new consultation paper on high speed broadband published yesterday. First, Ireland is well placed to benefit from the digital dividend because, as an island it faces fewer problems of interference. So there is an opportunity. And there is also a need. The report points out because Ireland has so many remote and rural communities the copper local loops on the fixed telecoms networks are longer than normal; 2.7 km on average) and in some cases up to 9km. This means that many subscribers cannot be reached by high speed internet, at least not at an economic cost. This is where wireless broadband steps in and where the digital dividend can make the difference.

This last point is of course highly relevant to Australia too. Using the UHF spectrum for wireless broadband could provide very fast services over very long distances, a great advantage for regional, rural and remote Australians. This would require some compromise with the broadcasters, and Reding is careful to acknowledge the important role they play.

But she concludes:

I have two suggestions to make:

First, let us jointly choose a political figure for the distribution of the digital dividend. I propose a “fair play” 50:50 rule. That is half the dividend for the broadcasters and half the dividend for the new users. A bold step like this will show the world that we mean business. This is the only way we will cut the knot and make real progress.

Second, let’s move ahead together. On spectrum, together Europe is strong, divided it will fail to reap the rewards of the digital dividend.

This echoes the current push in the US by the Wireless Innovation Alliance, a lobby group led by Google and Microsoft which also includes equipment manufacturers Dell, HP and Motorola, to use the “white spaces” or spectrum not used for broadcasting (the digital dividend) for wireless broadband services.  See the Alliance’s Resources page for more information from their perspective.

The Federal Communications Commission has been conducting field tests which apparently do not support the concerns voiced by broadcasters and wireless microphone manufacturers that the use of the white spaces in this way would interfere with their signals.The broadcasters position is outlined in this article from Broadcasting and Cable.

Yesterday Bill Gates called on the FCC to approve the white spaces plan at their meeting on November 4.

Public Service Broadcasting commitments on Commercial TV

Like the Australian system, in the UK the Commercial Free to Air ITV has a s et of Public Service Commitments which they are now cosidering jettisioning.   Media Guardian has published a couple of eye-opening articles based on a speech made by Michael Grade the MD of ITV.    The first outlines the potential, the second outlines the potential cost.   Both have real relevance to our Quadrants 2-4.

“Migrant Watch”????

As part of our project on what Australian television and its society will look like in 2018, we also need to consider the broader global outlook and how it interplays with models for governance, communication technologies and the needs of transforming cultures.

Will we, in Australia, be using our advanced communication systems in 2019 for a benign system of border control and protection? And will it result in cyber terrorist revenge from those denied access to our shores?

This is suggested in one of the video “scenarios” posed by an online forecasting game and “futures” project, Supersruct, developed by the Institute for the Future, a not-for-profit think tank based in Palo Alto, California (see the video scenario, “Generation Exile”).