Regional TV’s crisis: a new approach needed

Structural shifts in advertising and the rise of metropolitan BVOD services are pushing regional broadcasters to a breaking point.

David Kennedy · Venture Insights5 July 2024Period: FY24-FY264 min read

63,000↓

Population of Mildura market losing Network Ten content

$800→

Estimated cost for VAST satellite equipment per household

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Abstract

This report examines the precarious state of regional TV broadcasting in Australia, highlighted by the recent shutdown of Network Ten services in Mildura. It identifies irreversible structural trends in video entertainment and advertising markets, such as the expansion of metropolitan BVOD services and rising transmission costs, which are eroding regional ad revenues. The analysis argues that current media policy objectives, particularly access to local news, are at risk, necessitating urgent government intervention and a rethink of regional broadcasting support.

Key Takeaways

Network Ten has permanently ceased transmission in Mildura, a market of 63,000, due to long-term unprofitability.
Regional TV ad revenue is forecast to continue its decline through FY26 as audiences shift to SVOD and metropolitan BVOD.
Metropolitan networks hold exclusive national rights to BVOD, preventing regional affiliates from offsetting terrestrial revenue losses.

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Frequently Asked Questions

Structural shifts toward SVOD and metropolitan BVOD services are cannibalizing regional ad revenue, with declines forecast to continue through FY26. The Mildura market exit proves that even with a population of 63,000, terrestrial broadcasting is no longer commercially viable under existing affiliate models.

Metropolitan networks hold exclusive national rights to BVOD platforms, preventing regional affiliates from capturing digital revenue to offset terrestrial losses. This leaves regional players burdened by rising transmission costs while being locked out of the primary growth segment of the video market.

The VAST satellite service is the only immediate alternative, but it carries a prohibitive $800 equipment cost per household. This creates a significant affordability barrier that prevents a seamless transition for the 63,000 residents in markets like Mildura.

The 2017 removal of the 75% reach rule failed to trigger the expected wave of metropolitan acquisitions that would have provided regional scale. Instead, regional entities like MDT have remained unprofitable since as far back as 2006, leading to service shutdowns.

Regional TV’s crisis: a new approach needed

Abstract

Key Takeaways

Frequently Asked Questions

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