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During the five years from 2001 to 2005, viewing of Free-To-Air (FTA) television fell 11%, while overall TV viewing increased 8.5%, mainly driven by the rise of pay TV. The FTA networks are expected to see intense competition for viewers and advertising in 2006 and beyond, which will impact on their cost margins as they will be forced to put more money into programming and marketing. Despite strong revenue growth in 2005 amongst pay TV providers, it is likely to taper off moving into 2007 as there is unlikely to be sufficient growth in new subscribers to fuel further growth. However, from 2006/2007 onwards, the cost structure of the industry will become more sustainable and the industry will become more profitable. This report provides key statistics and analyses in the areas of FTA television, pay TV and radio.Free-to-Air TV2005 and early 2006 saw the slowing demand for TV advertising and a dramatic jump in Seven Networks audience share. This has been coupled with a steady decline in the number of people watching FTA TV at the expense of the rise of pay TV. Viewing audiences are also becoming increasingly fragmented. The growth of the TV ad market has been weakening with an increase of around 4% likely in 2006, which would be down from 6% in 2005 and 11% in 2004. Marketing and media buyers are increasingly turning to alternative media, such as through Internet and mobile channels, in order to reach consumers. Digital TVDigital FTA has been held up in a vicious cycle since it was launched in 2001. Available digital content has been nowhere near sufficient to help drive sales of digital receivers. This low penetration of digital receivers in turn has not been sufficient to encourage broadcasters to develop digital content. By the end of 2005, penetration of digital TVs (digital receivers or digital integrated TVs) was only 1.3 million, which still classifies digital TV as a niche medium. Pay TVWith Foxtels introduction of digital pay TV in early 2004, the industry only saw modest growth through 2004 and 2005. By 2005 penetration had only reached 23% and we dont expect penetration to reach more than 25% in 2006. However, consumer spending increased in 2005 due to greater subscriber numbers and up-selling of subscribers to more expensive digital tiers. The ability to up-sell subscribers to premium packages has been a key driver of pay TV revenue growth. RadioAlthough its advertising base is growing, the radio market is losing share to other media sectors such as TV. The declining power of FM radio is expected to be a key trend during 2006 and beyond. FM stations will be in danger of becoming less relevant to the youth market, as teenagers will increasingly turn to alternate new media channels such as the Internet for their music. The frustratingly prolonged rollout of digital radio in Australia continues. In early 2006 the government announced that legislation for digital radio would take a further two to three years to implement. |