The Australian Entertainment & Media Outlook provides annual localised data and analysis across eleven key industry sectors including filmed entertainment, recorded music, interactive games, free-to-air and subscription TV, radio and newspapers.
Key issues
Filmed entertainment industry
While frequently proclaimed, Australia’s screen production industry could truly have been said to have reached crisis proportions in 2003, on the back of a rising Australian dollar, increased competition from other footloose locations and the potential threat of the Free Trade Agreement with the US.
“In 2003, two-thirds of our films earned less than $1 million each at the box office. Making a return at the box office and achieving cultural objectives are not mutually exclusive. If a film screens in an empty auditorium there are no cultural benefits.
“The Film Finance Corporation should be applauded for recognising this and committing itself to developing local films that Australians are willing to spend their limited time and hard-earned money on,” said Steven Bosiljevac, PricewaterhouseCoopers Australian Entertainment & Media leader.
Recorded music industry
With the long-awaited introduction of legitimate music download services in Australia, the Recorded Music industry is finally beginning to respond to consumer demands for digital distribution.
“ Although a massive challenge, when combined with anti-piracy initiatives, digital distribution will allow the Recorded Music industry to present an alternative to illegal music-sharing.
“The success digital music distribution will ultimately depend on the depth of content, flexibility of content rights and reasonableness of pricing. Service must be outstanding if the industry hopes to convince people to pay,” said Mr Bosiljevac.
Interactive games industry
Online and mobile gaming will become increasingly lucrative segments for the industry over the forecast period, spurred on by sophisticated technological developments and a greater focus from publishers and console manufacturers.
“Despite remarkable imagination and capability, the local games development industry is not able to own the intellectual property it creates due to a lack of funds and resources. The lack of capital threatens to keep Australia ‘hired guns,. Federal government support is needed, much like what has provided to the film industry, to transform the current developers from simply being fee-for-service to IP owners,” said Mr Bosiljevac.
Free-to-air TV industry
Free-to-air faces the challenge of retaining audience share from new media streams such as subscription television and broadband internet. There is to be a review of whether a fourth metropolitan commercial free-to-air license should be auctioned in each capital city after 2006.
“The decision to have a fourth free-to-air channel pleases very few in the industry, and is questionable as Australia currently has five free-to-air networks for a population of 20 million. This is compared to the US having six free-to-air networks serving 290 million people and the UK having five free-to-air channels broadcasting to 60 million people.
“Digital television, multi-channelling and fragmenting audiences will all impact the television landscape to differing degrees, however growth will remain positive due to the mass appeal of broadcast television, event programming and innovative advertising initiatives,” said Mr Bosiljevac.
Subscription TV industry
Household penetration will grow by 10.8% CAGR and to 2.72 million households in 2008.
Anti-siphoning has been hot on the agenda for subscription TV industry. Revisions to the laws have been announced, and despite heavy lobbying, subscription television providers gained only one real win, with the extension of the automatic de-listing period for programs not picked up by free-to-air broadcasters from six to 12 weeks.
“The Federal government’s decision to only introduce minor reforms to the anti-siphoning lists will limit the industry’s growth potential. However, the digital services are convincing more Australians to sign up. Digital Video Recorder (DVR) technology, which is expected next year, will be absolutely revolutionary and will almost certainly improve industry performance via greater revenue per user and reduced subscriber churn,” said Mr Bosiljevac.
Radio industry
Australia’s radio industry sector has failed to grow along with the number of new FM competitors, due to the lack of a revolutionary technological advancement to boost radio’s share of overall advertising in Australia. The industry needs policy direction, support and timing from the Federal government to help launch it into the digital era.
“Digital radio trials are currently underway, but Federal government direction is lacking. This must be addressed before the Australian industry slips behind its competitors. Nevertheless, digitisation poses a number of challenges, including the estimated cost of upgrading close to 40 million pieces of radio equipment and potentially decreasing the medium’s mobility factor,” said Mr Bosiljevac.
Newspaper industry
Despite being the oldest medium, the newspaper industry has maintained its innovation and proactivity in order to help hold off losses in circulation and advertising. While this will be effective over the medium-to-long term, it remains to be seen what will happen as Baby Boomers begin to fade away.
“The great strength of newspapers is its ability to provide in-depth news and information, and this will see it through the current generation. However, Generation X and younger are used to electronic media and headline news. It remains to be seen whether they will continue to embrace newspapers in their current form as much as their parents.
“The long term effect of all this will be that the so-called ‘rivers of gold’ will be slowly but steadily re-routed from the print to the internet, fundamentally changing the traditional cover price/display ad/classified revenue model of the newspaper. The trick will be to ensure a balance between thought provoking editorial and advertising opportunities to capture targeted readers and advertisers.”
