FTA TV builds its industry infrastructure

TLDR version: Last week saw media reports that the FTA TV industry in Australia is building a shared ad sales platform to compete with YouTube (and others). The details are unconfirmed, but the initiative highlights the need for cross-industry cooperation to compete with global media rivals, and shows that the industry has matured to the point where this “co-opetition” is becoming more routine.

Proposed shared ad platform taking shape

Last week the AFR quoted anonymous industry executives saying that Seven, Nine and Ten are in talks to develop a shared digital advertising platform that can deliver ads to their apps, allowing agencies and advertisers to deploy campaigns across all FTA TV networks simultaneously. The “BVOD project” also involves ad agencies and the potential tech providers (reportedly Magnite, Xandr and The Trade Desk).

BVOD advertising revenue was $426m in FY22. The aim is to attract new advertisers to FTA TV apps. YouTube’s estimated annual ad revenue is $2b, so taking as little as 10% of YouTube’s business would deliver an additional $200m per annum to the FTA TV industry.

The project is being led by OzTAM, the company that currently operates the single platform for ratings measurement in the industry. OzTAM’s new VOZ platform provides measurement across a range of delivery platforms, and a sales platform would strongly complement this.

Why does this matter?

The FTA TV industry is losing broadcast viewers and ad revenues on its traditional platforms. BVOD revenue is helping to plug the gap, but further broadcast decline means BVOD revenue growth must accelerate.

The new platform would be a more attractive proposition for ad agencies as they will be able to target ads based on first and third-party data, and avoid unnecessary duplication of inventory across networks because they will know who has already seen the ad elsewhere.

Successful execution of a shared ad selling platform requires a sophisticated capacity for cooperation across the FTA TV industry. We argued in our annual 5-year outlook for media that the industry needs to develop this capacity if it is to compete effectively in a platform-driven business. The VOZ measurement platform was a big test of this capacity. It has proven a long and winding road, but the industry has remained committed.

The “BVOD project” is a different challenge, but just as demanding. The maturity of the sector will be tested again, but successful cooperation is now indispensable if the industry expects to survive and prosper.