Commercial TV’s long-term growth story

Structural cost-outs and BVOD growth are expected to stabilize industry value as viewing declines begin to flatten.

David Kennedy · Venture Insights23 August 2024Period: FY24-FY284 min read

79%↑

Higher revenue per minute for BVOD vs broadcast (2022)

22%↑

Forecast BVOD share of Total TV viewing (FY28)

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Abstract

This report analyses the outlook for the Australian Free-to-Air (FTA) television industry, forecasting a return to revenue growth by FY26. While per capita viewing continues to fall, the rate of decline is slowing as SVOD and AVOD competition matures. The analysis highlights that BVOD generated 79% more revenue per minute watched than broadcast in 2022, suggesting that as BVOD share grows to a projected 22% by FY28, it will lead long-term industry growth and support company valuations.

Key Takeaways

FTA TV revenue is projected to return to growth by FY26, primarily driven by economic recovery and stabilizing viewing patterns.
Broadcast TV reach saw a significant drop from 48% in June 2023 to 37% in June 2024, highlighting the urgency of the digital transition.
BVOD is a high-value growth engine, generating 79% more revenue per minute watched than traditional broadcast as of 2022 data.

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Frequently Asked Questions

The industry is projected to return to revenue growth by FY26, driven by a combination of economic recovery and the stabilization of viewing patterns. This recovery is underpinned by the superior monetization of digital platforms, which generate 79% more revenue per minute watched than traditional broadcast.

The decline is accelerating, with broadcast TV’s weekly cumulative reach dropping from 48% in June 2023 to 37% in June 2024. While per capita viewing continues to fall, the rate of decline is expected to slow as the competitive landscape between SVOD and AVOD players matures.

Yes, BVOD is a significantly higher-value engine, delivering a 79% revenue premium per minute watched compared to broadcast. This high-margin growth is already visible in the market, with Seven West Media recording a 39% increase in BVOD minutes in FY24.

BVOD is forecast to capture a 22% share of total viewing by FY28, at which point it will become the primary driver of industry growth. To sustain valuations during this transition, media companies must adopt telco-style structural cost-outs and increased automation.

Commercial TV’s long-term growth story

Abstract

Key Takeaways

Frequently Asked Questions

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