This Graph Explains Why Free-To-Air TV's Days Are Numbered

CES 2016: In 2008, the total number of streaming hours worldwide was estimated at 0.1 billion per day. Today, it's 42.5 billion. That's an astronomical increase in just seven years — and its only going to keep growing. In another seven years, most free-to-air networks will be as good as dead.

Netflix’s CEO Reed Hastings showed off the impressive numbers at CES 2016. As you can see in the below slide, the growth of video streaming over the past decade has been astonishing.

Of course, a lot of this has to do with advancements in internet speeds and newly emerging markets. Be that as it may, there can be little doubt that this is the way most consumers prefer to get their entertainment. If you look at the VCR and PVR, it has arguably always been this way.

As Hastings explained: "what consumers have [always] wanted is to choose when to watch... On demand television. With the internet we can finally give people this and put consumers in the driver's seat when it comes to when and where they want to watch."

Personally, I think there's still a place for scheduled programming — those "watercooler" moments have less impact when everyone is watching at different times. The "Red Wedding" from Game Of Thrones wouldn't have had nearly as much impact if all the episodes had been released at the same time, for example.

Nevertheless, it seems that most people vastly prefer choice and binge watching to passive, serialised viewing. Let us know what you think in the comments.


Comments

    Streaming can still allow serialised viewing, the episodes can still be released one at a time.

    I can't see networks surviving much longer as a force in entertainment.

      Except that the networks still out-rate everyone and everything else by a massive margin and their highest rated programmes are not things you can get from any streaming service. I'm talking news and sport, not just The Block and MKR. So your assertion that people "vastly prefer choice and binge watching to passive, serialised viewing" is complete bullshit.

      Everyone said the same thing about AM radio when FM kicked off in the 1970s but guess what? AM radio still dominates the airwaves because, like broadcast TV, they found their niche and exploited it to the hilt.

        Actually it's not completely bullshit. I vastly prefer choice and binge watching to passive, serialised viewing. I don't even watch TV anymore except for Good Game when I happen to be home when it's on. There is a little passive ABCKids when the little ones are up but even that's decreased now that Teletubbies is on in the morning before I go to work.

        I was already not watching TV before Netflix hit, just changed how I accessed it.

        Also on rating of TV programs - it depends on what you are rating. I bet it's not quality.

        Wow talk about baseless opinions batman! Got any proof of "AM radio still dominating the airwaves"? I'd love to see that data.
        AM's only purpose is that it has a longer range. That's it. In rural areas it covers a wider population.... a populations that's still orders of magnitude smaller than those covered by FM. I work in broadcast btw...
        AM won't ever die (at least until we have global wifi coverage) and TV probably won't for a while for exactly the same reasons... rural areas with limited connectivity to other services.
        But that's a huge cry from "dominating".
        News can be easily obtained for the internet in various forms.... and far more unbiased than various local offerings. Sport is the last bastion of regular TV and PayTV but even that will change over time once contracts expire and more people move over to streaming formats.

        It will take some time since bandwidth and internet speeds are a problem that broadcast doesn't have, but it's undeniable.

        As for ratings... please look up how ratings are calculated. It's an insignificant portion of the population who have special boxes that feedback information. That's then extrapolated in one of the worst examples of statistics to give total view numbers. Just because 100 out of 200 people watch MKR doesn't mean that half of Australia's population does.

    The only thing I believe that is keeping free-to-air alive is internet. As soon as unlimited data becomes the norm and we don't have to worry about going over our cap, then free-to-air will be basically dead.

      and the download speeds increase a 'little' more than currently 97KB a second :(

      Unlimited data plans are a dime a dozen.. and even though FTTN is only 25/12, it's still better than ADSL. Even with 25/12 you can handle a single 720 to 1080 HD stream without too much bother, especially with Netflix. So, as per the article, FtA TV is on its last legs right now.

    The advantage that free to air TV has (after you buy a TV and have a source of electricity) is that:
    - it doesn't cost you anything to watch
    - content on free to air has regulations it need to comply with
    - no one can monitor what you watch
    - changing stations is instant
    - with two TVs in the house both can view different HD TV shows without either impacting on the other (with an ADSL connection try having two devices viewing different HD shows at the same time).

    Think about it when you go on holidays for a month or so you are still paying your subscription fees to netflix et al but a TV can sit there for a year and then start up instantly.

    Yes, free to air is dying but its death is still a ways off.

      Totally agree. I tried Netflix for a month and struggled to find anything worth watching (probably because I'm an old fart), so cancelled my subscription before the free trial expired. I don't watch a lot of reality TV either. I've never seen a single episode of the Block, The Bachelor/Bachelorette, Biggest Loser etc. Nor do I watch sport. Nonetheless, give me free TV any day. I can simply change channels without having to navigate menus, wait for screens to load, put up with companies assuming they know what I should like and so on.

      I tend to disagree Maid you still need to pay for someone to set up an antenna and points in each room you wish to watch tv. That alone is a dying thing if you look at house telephones which are dying off in replace of mobile phones as house phones or not even having a house phone at all. Also the queuing of streaming shows (If added - which wouldn't be hard only would require more ram on the tv / chromecast or other tool) would solve the issue of two people competing for content online.

        To be fair, most houses already have a serviceable antenna an ports in the living room at least (and usually in a bedroom or two as well). Plus setting this up is a one-off cost akin to getting an internet connection. A decent TV Antenna would be on par cost wise with a broadband modem (provided you're not out in the sticks).

      - it doesn't cost you anything to watch
      Neither does Youtube or various free streaming services. Yes internet costs money, but so does electricity and the TV you're watching on. Just because it's ad and govt subsidized doesn't mean it's free. The infrastructure is very expensive. And if we're already assuming people have TVs and antennas, then the same can be said about internet, computers and phones.

      - content on free to air has regulations it need to comply with
      Not necessarily a good thing. It increases costs and limits content.

      - no one can monitor what you watch
      Also not necessarily a good thing. Inaccurate view numbers and ratings can cause good shows to fail and bad shows to continue. More data is almost always better in situations like this.

      - changing stations is instant
      Not sure why this is a point? My high end, new TV takes about as long as changing shows on Netflix.

      - with two TVs in the house both can view different HD TV shows without either impacting on the other (with an ADSL connection try having two devices viewing different HD shows at the same time).
      Valid point. This will change over time as internet gets better.

      -TV on holidays
      Again, will eventually be overcome by mobile internet. There's also no reason you can't suspend subscriptions, I'm pretty sure Netflix lets you do that a few times a year.

      What you didn't mention is all the downsides.
      -Ads
      -Limited programming, limited channels, low resolution (even the HD channels show very little fullHD content). This has grown recently but used to be a joke. Nothing in Australia is 1080p... it's 1080i at best.
      -Choice. I can choose what to watch, when to watch it, don't have to buy VCR or HDD recorder.
      -Content.... there's no comparison with what's available on the internet and Free-to-Air. It's like comparing an ocean to a glass of water. There's also international content, subtitles in different languages etc.
      -Pause, rewind, watch again etc.... Some devices and TVs can do that with Free-to-Air but it's not a feature of the actual broadcast.

      Yes some of these points overlap but that's because they are such big points. Content, choice, availability is what's killing TV

      And this final point is subjective but today's TV content is garbage. It's nothing but Reality TV, Cooking and Building Shows, News (and I use that word lightly) and Sport. Most of that can be easily obtained in better quality online ... the rest isn't worth consuming in my opinion.

    While streaming numbers are on the rise there it's important to remember the difference between the US and Australian context. US is a highly fragmented market. Actually the analogue to digital switch over in the US was reasonably seamless based on the number of people that had a cable service and didn't need to do a thing. Australia on the other hand. More than 99% of households in Australia have and watch Free to Air on a regular basis. And Free to air networks are changing how they operate to be more relevant. Just look at 7's broadcasting of the Tennis. An online app where you get to watch what ever court you want to!

      Huh? you just contradicted your self. You used an online app for streaming sport to prove how Free-to-Air TV is relevant? How does that work exactly?

      The 99% of households watching FTA TV is just flat out wrong. There's no way in hell that's true.

    FTA is doomed not because of ratings per se, but funding model.

    Streaming and PayTV gain revenue directly from customers. By comparison, FTA is entirely at the whim of advertisers. Once television was the dominant market for advertising but this is swinging in favour of the internet.

    Much of this has to do with efficiency. Advertising is predicated on converting the minimum spend into the maximum sell.

    Scheduled TV advertising still relies on the "cold call" approach to gain sales. There is some art/science attached, for example supermarkets advertising during MKR and car manufacturers during Supercars. But it's still a bit of a crap shoot whether sufficient numbers of their goal market will be watching while that show is airing.

    This was fine in an era when the only competition was radio. But the internet is an attractive alternative (better targeting and "always on") so the market is increasingly switching to online and digital media.

    Which, of course, streaming services don't worry about while continuing to debit subscribers.

    Source: my in-laws sell advertising and are seeing the demand, and hence cost, of FTA spots reduce progressively. Interestingly, radio still seems to holding up.

    If the FTA networks want to remain viable they need to learn to consider their customers. And that means the viewers first and foremost., and with them, the advertisers.
    If they insist on screening a dozen ads a a time (1) we will switch off (ie. literally, change channels, record and watch later while skipping the ads, etc.) and (2) advertisers will no longer want to pay or pay anywhere near as much for the screening of ads that few people will see.
    Give us fewer ads, fewer annoying promos, and more real entertainment and we will more likely watch the lot.
    Of course there is also the matter of programming - things we want to watch - and timing - don't put all the good stuff on late at night when I want to go to bed.

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