The last quarter of 2014 and the early months of 2015 might turn out to be a decisive time for the medium we call television.
In a single week in October, US networks CBS and HBO both announced online-only subscription video services. CBS All Access launched immediately, allowing viewers to watch the network live online and individual programs on demand. HBO Now would let customers subscribe to a standalone HBO service without paying for a multichannel cable or satellite TV package. The New York Times declared a “new era of à la carte television [had] arrived – seemingly all at once.” This was “a watershed moment for web-delivered television,” a move by two titans who earned “billions of dollars in profits from the traditional system” that signalled “how rapidly the balance of power is shifting in the television landscape.”
In Australia, the TV market was very different, but online subscription video services seemed to be arriving “all at once” as well. Subscription TV operator Foxtel launched the Presto online movie service in March 2014, halved its price in August, brought in Seven West Media as a partner in December, and added TV programs to it in January 2015. Free-to-air TV rival Nine Entertainment joined with Fairfax Media in August 2014 to announce the online video service Stan, and launched it on Australia Day. Global operator Netflix ended the rumours in November, confirming it would start a service in Australia. On 24 March 2015, it did.
It was the last of these that seemed most significant. Like the arrival of TV itself in 1956, two decades after services began in Britain and Germany, Netflix would arrive in Australia fully formed, a successful global service with massive brand recognition. In the past, new TV services had been introduced to Australians mainly by local media incumbents. The first TV services were provided by the major newspaper publishers and the national radio broadcaster, the ABC. When commercial TV services in country areas were “equalised” in the late 1980s, it was the metropolitan networks that provided the new channels. Subscription TV was pioneered by a new entrant, Australis, in the mid 1990s, but soon consolidated into a venture controlled by media and telecommunications incumbents. Digital TV was put in the hands of the established TV networks in the 2000s.
The online era had made it much easier for services to be “born global.” YouTube, the giant of online video, was a globally accessible start-up, expanding from the ground up in Australia and elsewhere. Its brand and service were young but already well established when it was acquired by a powerful international company, Google.
In November 2014, Netflix was no start-up. It had more than fifty million streaming customers in the United States and overseas. These already included Australian-based customers for its US service, a reality that clearly helped galvanise local responses. The company’s first program commissions, House of Cards and Orange Is the New Black, were well known as Netflix shows even when they were carried on other services in territories where Netflix was not yet officially available. This time, offering the next generation of TV services, Australia’s incumbents would be the start-ups trying to create awareness for new brands in their own backyards. The outsider, Netflix, was already at home.
And yet we had been hearing for a long time that television was finished. Twenty-five years ago, in Life After Television, George Gilder declared: “TV was a superb technology for its time… But now its time is over.” Since then, the medium has had at least two Golden Ages, according to some commentators. Introducing his decades-long study of American television, Tube of Plenty, also published in 1990, Erik Barnouw wrote: “Not for one moment … has the subject sat still for its portrait." In May 2015, Tim Wu wrote: “Over-estimating change in the television industry is a rookie mistake.”
Maybe change is just the norm for television? This year, 2015, might be special, but no more special than many other years before it – a big year certainly, but just one more chapter in the long history of a resilient, adaptable medium, a period that seemed overwhelming only in the fog of the present?
Twenty questions, twenty-five viewpoints
We decided to ask some people who should know. If television was changing so fundamentally, what might it look like in a year’s time, in a few years’ time and, say, a decade hence? We came up with twenty questions and put them to twenty-five people.
We wanted to hear what they thought might change and what might endure. We also wanted to find out how they had experienced and interpreted the recent past. What trends had surprised them? What had delighted them?
Settling them was hard, because different people would have different areas of specialised knowledge. But deciding which twenty-five people to interview was much harder. It couldn’t just be people working in what we have come to call “television.” There had to be people who worked in TV only some of the time, as well as people from other sectors that are supplementing, transforming, overtaking, bypassing or reinventing television. Even those right in the middle of the TV business shouldn’t necessarily have always worked there; they should include some recent arrivals and departures who knew the industry well but were not of it.
Our twenty-five interviewees include:
• six people who work for or represent Australian commercial and public free-to-air broadcasters;
• one each from a subscription TV (Foxtel) and IPTV (Fetch TV) operator, plus one from an international organisation, the BBC, that runs free-to-air services in its home country but now serves Australian audiences mainly through subscription channels;
• four from, or recently from, production companies that make programs for television and other media (Hoodlum Entertainment, ITV Studios Australia, Shine Group, Australian Children’s Television Foundation);
• three from the telecommunications and IT sector (Telstra, Broadcast Australia, Intel);
• two from online and social media companies (Yahoo!7, Twitter);
• one each from advertising (AOL Platforms), audience measurement (OzTAM) and a government funding agency (South Australian Film Corporation);
• a screenwriter, a media entrepreneur, a media strategy and measurement consultant, and a digital strategist and author.
Two of our interviewees are based overseas and one had recently returned, but most are based in Australia. This primary focus on small-screen media in Australia is not meant to be parochial, simply to acknowledge that TV has always been distinctive to its own part of the world. But TV has also, always, been a very international thing – American shows on commercial channels, British programs on the ABC, foreign language movies on SBS, international sport and news on Foxtel, videos from anywhere on YouTube. It is becoming more so – and so a lot of the questions and answers have an international flavour.
All interviewees were asked to give personal views, not necessarily those of their organisations. Most were interviewed face-to-face and were given the opportunity to check transcripts; a small number responded by email. A few chose not to answer particular questions that they thought were beyond their expertise or where they felt it was inappropriate for them to answer from their current positions.
Recent trends and highlights
We began by asking our twenty-five interviewees what had most surprised them about recent trends in television and video. Several said the resilience of linear free-to-air and subscription television, the rise and durability of reality formats, the strength of scripted drama and the increased attention paid to its screenwriters. One was struck by the opposite: the speed of the recent decline in audience numbers for regular free-to-air TV programs. Many mentioned the rapid growth of other platforms and devices – SVOD (subscription video on demand), OTT (over-the-top) services, tablets – and new forms of content on YouTube and other “non-traditional” outlets; one was surprised that a really strong “number 2” to YouTube had not yet emerged. One mentioned a rapid recent shift from the DVD format to online delivery of video programming to organisation-wide servers in schools.
Asked about their most interesting or satisfying recent personal experience with TV or video, many cited favourite shows, movies, websites or other content: Breaking Bad, Broad City, House of Cards, Jane the Virgin, Orphan Black, True Detective; two strikingly different Scarlett Johansson movies, Under the Skin and Lucy; the comic instructional site HowToBasic; a bunch of student films of exceptional storytelling and production quality. Others remarked on the new ways and times they are able to watch content, the launch of new services like Stan, the globalisation of event series like Game of Thrones and The Fall or services like Netflix, the rise of Netflix competitors like Amazon Prime, and a potentially game-changing transaction – advertising giant GroupM’s October 2014 “preferred partner” deal with YouTube.
Influencers, technologies, challenges
Unsurprisingly, many people mentioned the new streaming video or SVOD services launched in Australia – Netflix, Presto, Stan – when asked for the organisations or individuals that would have “a significant influence on the TV/video business in the next year.” Several thought these would consolidate, most likely into two: “Netflix and probably one other… [which] will be a great competitor because it will eventually have Seven, Nine, Ten, ABC, SBS, Foxtel all in one,” forecast Overture Management’s Ben Liebmann. Many also mentioned well-established incumbents of various kinds: telcos Telstra, Optus and the National Broadband Network – “The real future of TV will be decided by the telcos, not the traditional TV broadcasters,” said Fetch TV’s Scott Lorson – as well as the commercial free-to-air networks, the ABC and Foxtel. Others identified younger players: YouTube, Facebook, Google, Apple, Microsoft, Amazon Prime Studios and Minecraft creators Mojang.
Several interviewees resisted nominating a particular person who would have “a significant influence on the TV/video business in the next year.” Those prepared to chance their arm suggested Miranda Dear and Darren Dale of Blackfella Films, the makers of Redfern Now; Australian Football League chief executive Gillon McLachlan; ex-News Limited and Foxtel boss Kim Williams; Ynon Kreiz, the chief executive of Maker Studios; former Pixar animation director Saschka Unseld; Fox Networks Group CEO Peter Rice, who some think is being groomed to take over News Corporation from Rupert Murdoch; and “someone awesome at Alibaba or the Huayi Brothers in China.” Several mentioned communications minister Malcolm Turnbull and the Australian government, and one the ACCC: “They’re going to have at least a part of the future of our business in the palm of their hand,” said Seven West Media chief executive Tim Worner.
Technology trends that would be particularly significant in TV and video in the next few years? Mobile, mobile, mobile, smartphone, tablet… and the application of broadband to TV. Digital media consultant Gai Le Roy thought price as well as raw capability would make a big difference to mobile video consumption: “If mobile data packages change in Australia [which they did soon after we interviewed her] the consumption of, particularly out-of-home, video, phones, tablets etc, will completely take off.”
On the application of broadband to television, several people mentioned the impact of faster broadband speeds, especially delivered by Australia’s NBN, as well as HbbTV and applications like Apple TV and Google Chromecast that enable users to throw content from a device to a connected TV. “At some stage the free-to-air broadcasters are going to have to move to simultaneous streaming of their signals,” said Freeview’s Kim Dalton. “At the moment I’ve got to have a television with an aerial. That already feels on the edge of being old-fashioned to me.” Mitch Waters of AOL Platforms was interested in whether the young video streaming services would be able to stay subscription-focused rather than ad-focused, “or whether some of them would start adopting a hybrid model similar to Hulu in the US or Spotify here.”
Some thought the main technology trends would lie in user interfaces and experiences – changes in the discovery side of TV (Arul Baskaran, Yahoo!7); enabling shared experience (Tony Broderick, Twitter); personalisation (Richard Finlayson, ABC TV); immersive viewing (Courtney Gibson, Nine); “mixed reality” or digitally built worlds (Tawny Schlieski, Intel); interoperability of consumer devices (Rebekah Horne, Ten Network).
Our twenty-five interviewees were prominent people in positions to help shape the future but we wanted to know what they worry about. Many responded quickly and instinctively: cashflow, attracting and keeping great people, the small size of the local market and Australia’s place in the global market, where the next hit show might come from, how to convince telco people of the value of content, how to keep reminding public stakeholders of the value of a public broadcaster. Freeview’s Kim Dalton and Offspring co-creator and head writer Debra Oswald shared the Australian Children’s Television Foundation’s Jenny Buckland’s sentiment: “I know the audience is there but I have no idea how the high-quality drama programs we know they want are going to be funded.”
Evolving businesses: relationships, rules and business models
Most interviewees agreed that producers and distributors of content would work more closely together in the future: they would “become one,” or continue to consolidate under common ownership, or expand into each other’s terrain – producers by trying to go direct-to-consumer, distributors and TV networks by trying to own more of their content. But pursuing those opportunities would necessarily strain existing approaches to making and controlling content. Producers would have new places and ways to sell, but buyers might want more from them. Networks might want more territories and rights; consumers might want fewer constraints on the timing of releases and the ways they use and share digital content.
Models for owning and accessing content would need to be reimagined for the digital age, said Intel’s Tawny Schlieski: “How do the people who invest time and money in the creation of content get rewarded?”
For broadcast networks, these changes are profound. They “have to alter their business model,” said company director Deanne Weir. “Their businesses cannot sustain themselves in the same way and they’re all recognising that. This is not about some little addition to what Nine is doing, or what Seven is doing.” Ten’s Rebekah Horne agreed: “Ultimately you’ve got to be able to change the business model. You’ve got to be able to almost rewrite the rules across your own organisation, across how you interact with producers, what rights you want, how much you’re willing to pay.”
The changes are also significant for producers. Ben Liebmann said, “For producers, there’s a history with broadcasters. The new platforms don’t have that history, so there are new rules and paradigms. They are being driven by data, not by relationship. A potential shift in the ownership and control of rights has the power to fundamentally shift the production sector very quickly and to disrupt companies that have been built on creating and owning intellectual property that can be scaled, repeated, and rolled out internationally. The large production companies werenÆt built on the model of creating a piece of intellectual property and handing it over to somebody else.”
Interviewees agreed that windows, holdbacks and territorial rights trading would change, but they disagreed on how. Hoodlum’s Nathan Mayfield thought rights windows would be “obsolete.” The BBC’s Jon Penn said “being able to regulate content availability and pricing by market” would continue to be critical for makers of high-quality content. “A world where everything is available to everybody all over the world at the lowest price isn’t going to work for us and ultimately not for the consumer.”
Evolving audiences: control, content discovery and curation
Considering the evolution of audiences in the future, interviewees were asked if they thought that, as they aged, “millennials” would turn into their parents. Most agreed with OzTAM’s Doug Peiffer – “Life stage always impacts media usage” – but also with Intel’s Tawny Schlieski – that content-on-demand, not-time-bound, on-the-go, “ubiquitously accessible” were “new normals” that were here to stay. Foxtel’s Ross Crowley thought that as millennials form households and families, they “will move to big screens and shared viewing experiences, although more likely to fit around their own schedules.”
What role would social media play? “Peer-curated content will be the main source of an individual’s entertainment fix,” said Hoodlum’s Nathan Mayfield. Does that mean social media platforms will get more involved in creating and distributing long-form content? Telstra’s Ian Davis thought Facebook, for example, would “undoubtedly” find a way to play “more of a role,” but he didn’t expect it to become an “actual distributor.” Fetch TV’s Scott Lorson agreed: “Online audience does not translate to success in monetising long-form content.” The ABC’s Richard Finlayson drew an analogy with Amazon: “They started out as a place to buy books online, now they are suddenly able to sell anything and everything, including entertainment. Why wouldn’t Facebook do that?”
Shapes of things to come
Thinking forward to 2025, we asked our interviewees what aspects of the business they were most confident about. Telstra’s Ian Davis was “as positive as I can be of the significant rise of ‘what-I-want, where-I-want, when-I-want‘ consumption of television content.” Scott Lorson from Fetch TV still expected viewing behaviours to be strongly concentrated, like smartphone apps and online bookmarks: “people regularly explore, but core usage is very concentrated.” “The TV experience will be closer to an app experience than to the old projection, theatrical, scheduled sort of experience that TV took from cinema,” said Arul Baskaran from Yahoo!7. Former SBS managing director Malcolm Long thought “the thing that will endure is the big screen.”
Everyone agreed scripted drama would continue to be a big part of the business but the ways it is delivered and viewed would change and formats would evolve. “The hi-fi (expensive, professional, quality) and the lo-fi (amateur, shared) will endure,” said Nine’s Courtney Gibson. “The arse will fall out of the middle. It’s really the amateurs who pose the greatest threat to the professionals in our industry.” “TV won’t look like it looks today,” said AOL Platforms’ Mitch Waters, “but my opinion is it will still be there, and it will still be quite prominent. What will change – and I think we’re starting to see it – is the way TV is measured and how the data is used. We’ll see a big shake-up in that.”
Would the United States still be the dominant global screen culture in a decade? Yes, said many, but US content would change and, according to Nathan Mayfield, “the players will be different.” “US productions are more globally aware now than they were ten years ago,” said Arnold Worldwide’s Joshua Green, and the rise of strong African-American, Latin and Hispanic and LGBTQ audiences was already “driving demand for programming that not only looks different, but which comes from somewhere else.” No, said the BBC’s Jon Penn: “I think Asia’s probably the place to watch when it comes to dominant screen culture.” “The definition of domination will be reviewed,” said the SA Film Corporation’s Annabelle Sheehan.
What role would Australian programming be playing in a decade? “Australian content will be everywhere,” said Gai Le Roy. Taken as a whole, Australian audiovisual material “is braver, more interesting, and more compelling than the bulk of material produced in the US,” said Joshua Green. “It exports well, though mostly as formats and talent into the US.”
Finally, we asked our interviewees if, in 2025, there would there still be something we call “television.” “Yes – but I don’t know what it will be called!” said Fetch TV’s Scott Lorson. “Yes. But no,” said Hoodlum’s Nathan Mayfield. “The screen will serve multiple purposes. It will be meaningful as well as a utility.” Gai Le Roy thought, “That word ‘television‘ seems to be quite resilient. It seems to be winning.” Ten’s Russel Howcroft said, “It will still be called television, just like the phone is still called the phone, despite the fact that it’s got nothing to do with the phone.”
“Yes, of course there will be television,” said Nine Network’s Courtney Gibson. “There will continue to be large flat-screen televisions in every home; our watches, phones and iPads are TV screens, and there will be television content online. There will be more TVs and TV content than ever.” Freeview’s Kim Dalton agreed: “Absolutely. Isn’t television just getting better and better?” “Accepting there will be many platforms for delivery,” said Malcolm Long, “I think television will be around forever.”
ITV Australia’s Anita Jacoby was less sure: “I don’t know, I really don’t know, but there will always be content.” “TV for me is episodic content in our home,” said Intel’s Tawny Schlieski. “It’s a unique form that breaks away from the plays and movies that preceded it. It provides us with characters and continuity that we want to invite into our intimate spaces over and over again. That isn’t going anywhere.”
Joshua Green thought, “Television has trodden the edge of significant revolution its entire life. It has never been static. I think it’s got at least another decade in it.” “Consumers will still call it TV, but whether people in our industry will view it that way, I’m not sure,” said AOL Platforms’s Mitch Waters. “As a device and as a medium,” said Yahoo!7’s Arul Baskaran, “I think television as we know it is going to disappear.”
Offspring co-creator and head writer Debra Oswald wanted answers too: “What do you think is going to happen? Seriously what’s your best guess? I’m keen to know because I have to plan my career.” •
This is an extract from Television 2025: Rethinking Small-Screen Media in Australia – 20 Questions, 25 Viewpoints. The full report is available here.