Free to Air Digital Channels Like 7mate putting pressure on Pay TV

The imminent launch of Seven’s third channel 7mate is likely to put increased pressure on the market for programs. Seven CEO David Leckie has been quietly buying up programs for the new channel.

“I think it’s going to become more expensive to buy more content,” Leckie said, “But on the other hand, these channels are not going to rate as well as the primary channels so we are not paying as much”.

Nine also is expected to launch a third channel shortly – which is most likely going launch around the same time as 7mate even though the network had indicated they were waiting until 2011 for it’s launch.

The explosion of free to air digital multi channels in the last 18 months have been blamed for the stalling of the growth of Pay TV in Australia. 7mate will be the 13th free to air digital channel (excluding community TV) and Nine’s 3rd channel the 14th.

As content is spread between all of these channels, the choices for the viewer increases, while free to air networks hold onto the rights for more shows than ever before to back up the channels with adequate content. Previously, shows that the free to air networks chose not to air would end up on Pay TV sooner. Now they can use their digital channels for that content.

In a recent interview with on the Media Week TV show (seen on the Sky Business channel), Foxtel CEO Kim Williams said that the implementation of free to air multi channels has had virtually no effect on shares that Foxtel achieve, quoting a difference in the order of 0.2%. While at the same time, the digital channels cannibalise free to air’s main channels.

This in effect means, that the net amount of people watching free to air TV is hardly changing – it is merely spreading over more channels for the same amount of people thereby driving down net audiences on primary channels – while Pay TV’s net amount of people is also hardly changing.

Pay TV has the advantage over free to air TV in being able to constantly offer new and increased services which helps them draw in more revenue. While the growth of the number of Pay TV subscribers has slowed down, more subscribers are taking up additional services such as IQ2’s and multi room set ups thereby resulting in growth of turnover and profits for the business.

Sources: The Australian, Media Week

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  • Dudester

    Ok with all due respect, why would anyone want PayTV in this day and age? Ok 10yrs ago I would of said, movies, TV series, cartoons even. But now in the digital age, we have all this online and can easily download entire series from work or at home. Gone are the days you had to wait for video rentals to get the latest movies. Even blu ray new releases can be had over the internet. So the mind boggles as to why anybody would want PayTV, other than sports which is not a critical component to my needs. I have been abroad and seen PayTV in America and Latin America, and it puts our services to shame. Which is why I stopped being a PayTV fan years ago. Digital TV is hopefully the way of the future. I seldom watch it seriously anyways, but its nice to have those free to airs whenever you are channel surfing at home. Hopefully PayTV will go the way of the dodo as market forces drives them down further this decade and beyond.

  • Bye Bye Foxtel

    Am very close to cancelling Foxtel. They can babble all they like about their shows but they are on too high a rotation with some shows repeated from beginning to end and back to beginning to end without a break.

    I can almost recite word for word any of the Star Treks/Star Gate series. TV1 I gave up on long ago and now see shows from there creeping into Fox Classics.

    If I have to watch so many repeats of the same shows then I may as well just watch Free to Air.

    I’d say give it another year or so and Foxtel will decline in popularity because of all these new free to air shows. They will even lose their grip on Sports which is all that kept them going.

     

     

  • Adam Thompson

    Free to air multi channels only have Foxtel rejects, so it is only the stuff you have already seen or never want to see.

    Also, there is much more to Foxtel than just TV1, FOX8 & Sci Fi.

  • DARIO

     Foxtel sux, waste of money, I hope they go bankrupt. cancel your foxtel now!!!!!!!!!