Aussie broadcasters need to reinvent as audiences turn to digital, says PwC report

Growth in the Australian media and entertainment economy has significantly slowed, according to the latest report from analysis firm PwC, which calls for broadcasters to embrace digital reinvention.

Louise King

The 25th edition of PwC’s Australian Entertainment and Media Outlook found that the traditional television segment recorded revenue declines of 15.3% to A$4.7bn (US$3bn) in 2023.

Overall revenues for the total Australian entertainment and media sector hit A$62.3bn in 2023, up 2.8% per cent.

PwC highlights the sluggish performance of Australian television broadcasters in shifting audiences to their digital and on-demand methods of delivery, largely “constrained by concerns about cannibalising their traditional revenues.”

This constraint has been exploited by international streaming competitors which “have demonstrated Australian consumers’ willingness to adopt new delivery methods for premium, internet delivered content.”

In the next five years, PwC forecasts Australian broadcasters will not redeem declines in revenues on their traditional offerings, although the gap is closing.

The report found that in 2023, 31% of surveyed Australians reported watching commercial online television in the last week, up from 29% in 2022. Public broadcasters offered the most popular free online television services, with 34% of those surveyed reporting they watched one in the past week.

Traditional television audiences are declining, with 51% surveyed stating that they watched a commercial free-to-air service in the past week, dropping from 61% in 2020.

“New products and services, including FAST channels, better cross-platform audience measurement, digital ad insertion into linear ad breaks and new ways to monetise opted-in viewers and listeners directly, will contribute to broadcasters’ business model reinvention,” the report advises.

PwC Australia partner and technology, media and telecommunications leader, Louise King, said: “Broadcasters are definitely moving the dial by exploring new revenue streams. The key to staying competitive against international players will be continuing to invest in new products and services that appeal to Australian consumers and advertisers alike.”

In line with global trends, free streaming services from YouTube and TikTok, enjoyed steady growth with Aussie audiences and advertising revenues have followed. Weekly free video consumption has jumped from 54% in 2020 to 61% in 2023. PwC forecasts that the free video sector will surge in value from A$5.2bn in 2023 to A$7.7bn in 2028. Despite a brief rise in demand for SVoD services during the pandemic, PwC analysis sees online subscriptions plateauing, due to cost of living pressures.

In other key findings the report forecast that Australia’s appeal as a screen production destination is slated for further growth as a consequence of the federal government’s increase of the location offset tax rebate. The report forecasts that following the resolution of the US screen union issues, the production sector globally should expect to see a resurgence in the volume of premium scripted content with Australia’s reputation as a premium scripted content location putting it in an attractive position.”