Are television networks feeling the digital effects?

12Mar10

source: Sydney Morning Herald 12 March, 2010

There’s been a decided shift in television viewing numbers already in 2010 and it seems to be a nationwide trend. Here in Newcastle we have been intrigued by the difference in audience numbers this year compared to the same time last year.

So far there seems to be an average of 20,000 less viewers per top 10 program than for the corresponding week in 2009. For example the #1 program in Newcastle for week 10, 2010 was The Mentalist with 84,000 viewers. The #5 program was NBN  Saturday News with 67,000 viewers and the #10 program was Talkin’ Bout Your Generation on SC TEN with 55,000 viewers.

IN 2009 for the week ending 3 March (corresponding week) here are the numbers: #1 Underbelly on NBN with 124,000 viewers, #5 RSPCA Animal Rescue on Prime with 86,000 viewers and #10 CSI on NBN with 75,000 viewers. Of course, Underbelly is a standout ratings winner but the #1 program last week had less viewers than the #5 program last year.

As you can see there are about 20,000 less viewers for the main Free-to-Air channels. And this is happening every week.

Now the national media are picking up on the trend. The rest of this post is taken from today’s Sydney Morning Herald.

Too soon to judge digital effects: networks by Julian Lee

FREE-TO-AIR networks are calling on advertisers to cut them some slack over figures that appear to confirm fears audiences of their primary channels are being significantly cannibalised by new digital channels.

Some media buyers are delaying judgement on the double-digit falls in audiences for Seven, Nine and Ten’s main channels until after Easter, when they will have at least nine weeks of this ratings period to review.
They say a change in the make-up of the audience measurement panel to include time-shifted viewing, the launch last year of three digital channels and events such as the Olympics mean comparisons between this year and last cannot be made.

But one senior media buyer said the underlying trends could not be ignored and the level of cannibalisation of audiences by the new channels-One HD, GO! and Seven Two-was obvious as it was worrying.

The chief strategy officer with Mediacom, Mat Baxter, said: “You can look at the hero assets of those networks and draw some conclusions… that the jewel in everybody’s crown is no longer as shiny.

“The question is will the sparkle reappear in the [viewing of multi-channels] to the degree that is necessary for them to protect their total audience and therefore their revenues. I would say probably not but … I am more than happy to modify my view as more data comes through.”

He said waiting until Easter meant media buyers were almost a quarter of the way through the year before reaching a conclusion.

The chief sales and digital officer of Seven Media Group, James Warburton, acknowledged “an element of cannibalisation within our core station” but said total audience across his two channels was up.

Seven’s audience rose 5.5 per cent across Seven and Seven Two in the key demographic of 25 – 54-year-olds between 6pm and 10:30pm in the first 10 weeks of this year. But the audience for Seven’s main channel fell by 5.7 per cent.

Mr Warburton said it was too early to determine the impact of panel changes, digital channels and anomalies created by sporting events such as the cricket, which ran later than usual, and the Olympic Games in Vancouver.

“The industry needs to get its head around multichannels first, and then time-shifted viewing second. It will take time for the industry to get a strong view on it. When things are new there’s a little bit of a cut-off but it will iron out and then everyone will make the right decisions.”

Ten decline to comment and Nine’s sales and marketing director Peter Wiltshire, did not return calls.

The OMD managing partner Peter Horgan said that “given the multitude of variables” his agency was waiting until after Easter before forming a view.

The investment director of Universal McCann, Victor Corones, said his agency was taking time to “understand the implications of the changes in the composition of the panel”.

But pay TV operatives say the excuses are a smokescreen. Anthony Fitzgerald, chief executive of Foxtel’s sales house MCN, acknowledged the fundamental changes in the TV landscape, but said: “The fact that the main channels are down an average of 13 per cent is a clear indication of cannibalisation. In my view audiences would not be down to anywhere near that degree if they hadn’t launched those channels, where 90 per cent of all multichannel viewing comes from free-to-air homes that do not have pay TV. These are the facts.”

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