Australian Media Industry Analysis - Case Study Example

Australian Media Industry Analysis A new dawn has risen for the Australian Film Industry after the Screen Australia commenced its operation in July1, 2008, combining the forces of Film Finance Corporation Australia (FFC), Film Australia Limited, and the Australian Film Commission, in promoting excellence in screen culture, facilitating peer contact and professional developments, and expanding opportunities for audiences to experience Australian works (Screen Australia). As funding has been a deterrent to the discovery of film talents in the country, the organization seeks to provide the necessary monetary support to both encourage and complement private investments in Australian film and television, in recognition to the significance of the industry to the whole Australian economy. This necessary support on the part of the government is expected to resonate to the whole industry and Australian society. The media is said to be very accessible in Australia and caters to a variety of audiences. Ninety-nine percent of the Australian households have a television and two media outlets; namely, the Australian Broadcasting Corporation (ABC) and Special Broadcasting Services (SBS) are funded by the government, (Wikipedia). As of October 2005, there were no noted changes in the consumption of newspaper, television and radio in Australia; however the internet has seen a radical increase in use particularly among the young, together with cable and digital television viewing (M/Cyclopedia of New Media). This trend is largely attributed to the advancement in technology, allowing us to perform various tasks through the internet. Just as how media consumption will be directed through innovations, especially in technology is an interesting topic to look at. We thus look at this media trend in our analysis. Television Viewing Free-To-Air TV Currently, there are two government-funded national networks (ABC and SBS), three commercial networks (Seven, Nine and Ten) plus a number of small independent community groups that provide free-to-air television services across the country. ABC is an entirely non-commercial station while SBS is a multicultural station that features international news, current affairs, documentaries and sports in different languages (Live in Melbourne Victoria Australia). Free-to-air television is available to at least 94% of the population. With an average TV viewing of 21 hours and 46 minutes per week for Australian adult, the 2007 figure reveals that the hours spent on watching television is 47% higher than the time spent on listening to the radio, 146% more than time spent on the internet, 545% higher than times spent on newspaper reading and 1068% greater than time spent on reading magazines (Screen Australia). Obviously, this obsession over television viewing has benefited the commercial stations much, in terms of advertising revenues. The 2006 figures on markets and ownerships reveal that in the 23 separate commercial television markets and 54 individual commercial television markets in Australia, the total advertising revenue amounted to $3,553 million, resulting to per capita revenue of $163 (Screen Australia). Exactly what explains the high TV viewing pattern is answered by Hugh McKay in his book Advance Australia ... Where? He said that the country is retreating from reality in the late 1990s and has entered to what he called as The Dreamy Period (McKay). The presence of television has both caused and benefited from this trend, especially bringing much profit to the commercial television owners. Subscription TV Currently, there are more than 90 English language television channels offered by three major local subscription television groups. Despite strict media regulation, new broadcasting legislation was introduced in 1992 to allow new sectors of broadcast services (Screen Australia). It was only in 1995 that Australis through the Galaxy brand was able to distribute broadcast service television service (ASTRA). At the end of 1995, there were only 85,000 homes with 300,000 potential viewers, but the figure has ballooned to 6.1 million subscribers as at Quarter 4 of 2007, which is equivalent to 31% of the total population. Foxtel is the largest local subscription TV operator with 1.335 million direct subscribers and reported earnings of $ 237 million from total revenue of $ 1.42 billion. It is followed by Austra with $174 million earnings in 2007 from total revenue of $568 million. The end of the Federal Government Imposed Moratorium has allowed subscription TV operators to carry advertisements giving more opportunities for profit to operators (Screen Australia). Among the households with access to both subscription TV and free-to-air TV, subscription TV has a viewing share of 52.9%, in 2004 compared to other channels, while 54.2% of Australian aged 16-39 view Subscription TV, resulting to a penetration rate of 26.8%, all for 2004 figures. (ASTRA) While it took a while for local subscription TV operator to achieve a sizeable number of subscribers, they are now highly profitable and fast growing, with one of the major operators reporting around 92.4% of the revenues from subscription services and the rest from advertising. (Screen Australia) Cinema According to a survey that measures Australia’s progress, cinema is the most popular cultural and leisure venue in 2002, reaching to an attendance of around 70% of the population 18 years old and above (Australian Bureau of Statistics). Sales of movie tickets reached to as high as $895.5 million in 2007, up by $28.8 million in 2006. This is the highest recorded sales in a year, second only to 2004 figure of $907.2 million; despite of the drop in the frequency of cinema visit for ages 14 years and above (George). The cinema attendance appears to be inversely proportional to age, as those aged between 14-24 had the most frequent cinema visit in 2007 of around 9 times, followed by the age group of 25-34 years old with 6.7 times and as they get older, the proportion of those who go to cinemas decline with the frequency (George) . The frequency trend also reveals which types of movies are likely to rake much profits for the producers as evidenced by the top-grosser in 2007, “Harry Potter and the Order of the Phoenix”. Cinema is both benefited and threatened by technology. It has particularly used digital projectors and the Dolby sound system, but at the same time it faces intense competition from home entertainment system and internet viewing activities. As broadband speed improve and computer and television converge, movies can now be easily downloaded and viewed at home (George). With these challenges, cinemas are now innovated to offer not just movie viewing but social experience as well. There are luxury cinemas with food and wince services and introductions such as live sporting events and concerts are also being talked about by cinema executives (George). Radio Almost three quarters of all radio in Australia is commercially operated, with the Commercial Radio Australia having 250 members in 2006. It posted a revenue of $ 591 million in 2005, a 6.2% increase from the figure of 2004 (Commercial Radio Australia). A recent survey of “research and market” revealed that although it has posted an increasing figure for advertising revenues, the radio market is losing share to other sectors in the market such as television and the internet. It is forecasted to meet stronger competition from within and outside the industry in the near future, especially with the introduction of digital radio. The early backlash in the radio sector can be attributed to its history of early focus on European news and affairs, which did not make the expansion of radio, cable and other wireless technologies . Internet The Nielsen Online’s 10th Australian Internet and Technology Report revealed that for the first time, internet used surpassed TV watching, the former averaging about 13.7 hours per in 2007, while the latter is 13.3 hours, making internet the most dominant media in the country in terms of usage (lemerle). Tony Marlow, associate director of Nielsen Online in Asia Pacific commented that, “In recent years, Australians have been increasingly consuming more than one medium at a time, commonly resulting to a fragmented span of attention”, however, “while the use of the internet continue to grow this year (in 2007), for the first time ever, this was not accompanied by an increase for TV consumption-a possible early warning sign that we are approaching the feared media saturation point” (Marketing Charts). From 16% in 1998, the proportion of Australian households with internet connection has risen to 64% in 2007, translating to around 5.1 million households. Broadband has the greatest users in males aged 15-17 years old, people with higher income, those with university education and those born overseas (Screen Australia). One of the most popular usages of the internet is audio and video downloads, but in the country the percentage of those who use the internet for this purpose remains to be meager as Australians still prefer watching long video contents on television and DVD, with only 12% downloading and watching streaming video (Screen Australia). Instead, Australians top online activities are E-mail, banking, news, sport and weather, bills and payments and maps/directions (lemerle). This survey manifests how internet use was able to steal some TV viewing hours among the Australians- not through entertainment such as music or movies, rather through news on current events, sports and weathers, with the internet giving a more convenient and flexible medium for these kinds of information. Newspaper The news print media is probably the most affected by the internet boom, leaving no options to newspaper company owner but to go online with a combined newspaper-Internet approach. The Australian Press Council has identified five major trends in Australian print media as of 2006. Newspaper companies are now transformed into multi-media companies as the race to spread information has elevated the competition to the internet, as newspaper sites become the first base for fresh news (Australian Press Council ). The recently published State of the News Print Media in Australia 2007 says that losses in circulation through lesser sales in printed version have been surpassed by gains through online visits (Australian Press Council ). One deterrent however to the success of print ads is the administrative and legal curbs imposed by the government, as there seems to be limitation to the access of information that newspaper should have had published. The rise of government information management is manifested in a number of ways: the failure to apply Freedom of Information Acts and the pervasive and deliberate act of media management (Australian Press Council ). Two of the most crucial concerns among the newspaper companies involve the retention of public’s interest to newspaper and the need for journalists to be multi-skilled especially the need to be physically attractive when projecting in front of the camera. Some observers believe that the internet is most likely to bring down the newspaper more than the advent of television, with the study Australian Journalism School and press Council revealing that the reading habits among Australian is changing as some group are reading newspaper less, especially those below 50 years of age (Australian Press Council ). This data is indeed alarming as newspaper might run out of audience in the next five to ten years. The Over-all Media Trend As one of the wealthy nations, Australia will not be left behind in terms of technology. As such, the media industry was transformed by inventions such as computers and internet. The media has been affected by technology in a variety of ways and it has continuously altered the taste of the consumers. The television continuous to be the more dominant media, as it is available to about 94% of the total population and still one of the cheapest given at least 5 free-to-air television channels. In fact, Australians are predicted to spend $5 billion on digital technology in 2008, the highest consumption going to LCD and plasma TV (Canon). This consumption prediction reveals the sustained love of Australians for TV, although the domination of the internet may be inevitable. The advertising revenue has both increased for the free-to-air television and radio in the last few years. We still expect however that radio is affected by the development of MP3 players, and the availability of music online. As mentioned above, it is losing valuable market share to other sectors in the industry, and we expect this trend to persist, especially with the increasing internet usage. The internet use is indeed expected to gain an even greater share, which can probably alter the consumption of radio as video and audio downloads are available online. The popularity of sites like www.youtube.com and Limewire attest to this trend. The convenience that it offers, may it be for information such as news or entertainment purposes, such as movies and television shows, the internet stands as a reliable source. All the other media are much affected by the dawn of the internet. The radio finds rival in free MP3 download, the news can now be conveniently accessed through the newspaper websites and movies can also be copied for free. With this substitute, radio, cinema and newspaper owners are forced to innovate in their products and services. As such, we see movie houses converted into social paradise, newspaper websites biting increasing commercialization to increase profit and radio television stations having their own websites to better communicate with their audiences. The trend of adding more value to the usual product offering and extending the arms to cover different channels are the major trends in the media industry, which inevitably has brought excitement to television, radio, newspaper and cinema, and these are all due to the threat that the internet has posed. Works Cited ASTRA. ASTRA Australian Subscription Television and Radio Station. 28 August 2008 . Australian Bureau of Statistics. "Australian Bureau of Statistics." 31 May 2006. www.abs.gov.au. 30 August 2008 . Australian Press Council . "State of the News Print Media in Australia 2007 a supplement to the 2006 Report." 18 October 2007. http://www.presscouncil.org.au. 1 September 2008 . —. "State of the News Print Media in Australia report 2006." 11 October 2006. www.presscouncil.org.au. 1 September 2008 . Canon. Canon . 2008. 31 August 2008 . Commercial Radio Australia. March 2006. 31 August 2008 . George, Sandy. "Get The Picture ." 27 August 2008. 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