The media revolution will be digitalized - how much TV pain will Aussie owners take?
TV3 owner upbeat despite debt mountain
Australian private equity investor Ironbridge Capital's two main New Zealand investments have $1.1 billion of debt and reported big losses in the latest accounts revealed publicly. HT Media Holdings, the holding company for TV and radio operator MediaWorks, which in turn owns TV3, C4 and one of New Zealand's two main radio networks, reported bottom-line losses of $40.3 million for the August 2008 year. Barra Topco II, which owns waste services company EnviroWaste, lost $2 million in the June 2008 year.
OUCH! The recession is crippling revenue from overpriced assets that cost too much in the first place and one has to question aloud how much longer the Aussies will stick around before they go for a quick fire sale that could see Mediaworks on the block and sold off to new owners who will cut costs by sacking large numbers of employees and shows that simply aren’t rating.
The problem isn’t unique to Mediaworks, it’s a problem the entire broadcasting industry is trying to grapple with. For the longest time TV and radio have relied on a grossly inflated ratings system that is far from exact and as media goes on line with ways to measure viewership that is much more precise, the downgrade from 900 000 ‘approximate’ viewers from TV and radio ratings to 90 000 exact viewers from on line ratings is such a drop that media outlets are left with some explaining to do to advertisers and of course need to lower price expectations for advertising. While revenue expectations come crashing down to earth from the criminally high and inflated ratings prices that were previously adopted you also have a situation where there is a massive change in the way broadcasters distribute their product. Gone are the days of capital intensive broadcasters who require a satellite dish and a satellite, with TiVo and internet protocol TV around the corner aided by a massive upgrade in download speeds, a Broadcaster only needs a bloody great big server meaning those who did have the satellite capital overheads of the past are doomed to be the new dinosaurs now.
Compounding Broadcasters problems are an over dependence on over seas content, why will someone watch the latest series of Battlestar Gallactica on C4 when they’ve already downloaded and watched all episodes on-line? We have a new screen agnostic generation of media consumers who aren’t locked into the gatekeeper programming of the broadcasters meaning broadcasters will be forced to start creating unique local made content that viewers can’t get elsewhere.
And it will only get worse for Mediaworks because the precision of ratings that is slowly strangling their TV revenue is just beginning with the radio spectrum in NZ with digital radio about to eclipse the analogue method. For radio the shake up could be even more extreme because the dodgy ratings system adopted by the broadcasters for radio is even more inflated than that of TV.
The over-capitalized, overseas-content dependent media monoliths of today are doomed to be the dinosaurs of tomorrow the only difference being that these pre-extinct beings know their doom is approaching. Brian Eno, one-time synthesiser player with Roxy Music, made a prediction in 1991: "Future TV will be made with simple equipment, unqualified people, small budgets and bad taste." How right he was.
posted by Bomber @ 5:20 am
5 comments
5 Comments:
I find it appalling that advertisers allowed the diary ratings scam to continue for so long. About 15 years ago there was a mini scandal in Australia after a trial of a digital ratings system.
All broadcasters were involved including ABC TV which was free to air and commercial free. The real viewing figures, as opposed to the inflated diary figures of before showed than over 25% of viewers watched ABC, but the archaic diary system had put their audience share at under 5%.
Natch someone at ABC leaked the findings to elements of the print media who didn't have TV cross ownership which was meant to be illegal back then (unless you were Murdoch but that's another story).
There was a medium furore over the obvious errors in the diary system, particularly that diary keepers wrote what they thought the research companies wanted to hear so they wouldn't lose their position of power in the community.
With the diary system the sample group is ludicrously small and therefore subject to huge manipulation.
We see the same thing here in NZ. This explains why those shows that no one in their right minds could watch, which cost a great deal to put on, employing many industry hacks (eg dancing with the stars) rate so highly despite anecdotal evidence to the contrary.
I don't know anyone who would watch that "dancing with the stars" crap and my friends all say the same thing - that they don't know anyone who watches it. Yet it claimed some huge audience share, then used as justification to monopolise TV1 for two months. Meanwhile TVNZ sacked news and current affairs staff.
Anyway back to OZ after the diaries thing had been exposed the broadcasters and ad agencies got together and announced that this anomaly of far more peeps watching documentaries and serious current affairs shows than would ever admit it was why the whole thing was just a test. Obviously they needed to 'iron out the flaws'.
In future the ABC, whose commie staff had difficulties holding on to commercially sensitive material would be left out of further 'trials'. Until these problems were ironed out the diary system would stay.
Now Blind Freddie could see this was just a delaying tactic, that eventually digital systems for learning what shows audience were watching would become so cheap and efficient that controlling the data from real ratings would be impossible. Any TV station could have it's own digital system that was both more accurate and much cheaper to run than the Nielson diaries.
James Packer slowly got his family outta the channel Nine operation and into internet casinos. Nine had been a cash cow for the Packer family but now it is a huge white elephant.
The rabidly zionist Canadian family who owned TV3 here in NZ also got out while the going was good. Although it is likely that reality had bitten back in Canada so it was more necessity than prescience that got them to sell up.
This begs the question. That given the problems with the traditional commercial TV station model had been so widely known in the industry since the early 90's, what sort of drongo would pay top dollar for something so close to extinction?
A drongo who is using OPM (other people's money), of course.
What of the so called media geniuses? I reckon they are either trying to squeeze the last drop out of a dead duck or, the really big players have a meister plan.
Take Murdoch who has been doing another round of media conglomeration (eg Wall St Journal) in the past couple of years. He seems to be banking on the notion that when the market totally fragments into self selected commercial free watching, that there will still be room for one or two really big players who can dominate by virtue of having an established brand.
The sort of brand that is accorded to public broadcasters in many markets at the moment.
Australians always used to say that when something really major happened (war, cyclone, bushfire) they would tune into the ABC to get news they could rely on ahead of the far more tabloid and sensationalist commercial stations.
So if that is the market Murdoch has in mind for his execreable Faux TV he is going to have to bribe, bludgeon, and extort pols from asshole to breakfast: getting them to close - sorry, privatise public TV, thereby creating room in the market for his right wing fantasies known as Fox News.
We already know that TVNZ is gonna be put on the block if National has enough MPs standing after the next election to form a government.
It is unlikely that it will take too many more weeks of nats young guns getting caught with their fingers in the till before Key shuts down his glasnost openess.
That plus the plethora of old boy appointments to known choke points and potential leaky ships should begin to get traction preventing many more departmental leaks. That means that the nats prolly will win govt next election.
In the meantime look to TVOne becoming even more unwatchable than it already is. Lots more awful english reality shows, garish contests about nothing important with el cheapo news and current affairs, all for the purpose of making voters not care what happens to TVNZ as long as they don't have to watch it.
The sad state of the network won't matter to a potential overseas buyer because a buyer isn't interested in buying an asset. The purpose will be to buy out and close down the opposition. The less they have to pay, the better.
The only silver lining will be seeing all of of the nasty careerist low talents who have been polluting TVNZ of late discovering that all of their spruiking for unfettered private enterprise and rightist fantasyland has engendered their own unemployment.
That and if NZ ever does elect a government with true humanist values again, creating a public broadcasting network that competes with established players will be a relatively inexpensive exercise.
Something similar to the way new technology allowed Kiwibank to be be put together for SFA.
THE REACH OF THE INTERNET HOWEVER IS LIKELY TO REMAIN LIMITED FOR THE FORESEEABLE FUTURE AND IT SEEMS UNLIKELY THAT IT WILL BE HUGELY EFFECTIVE IN COUNTERACTING THE POWER OF THE MASS MEDIA.MOREOVER IN TERMS OF OWNERSHIP AND CONTROL THE INTERNET IS NOT AS "DIVERSE" AS IT MAY SEEM AND IS THEREFORE LESS LIKELY THAN ITS SUPPORTERS HOPE TO PROVIDE DIVERSITY IN GENERATING NEWS AND INFORMATION.THE PROCESS OF MERGER AND TAKEOVER LEADING TO THE CONCENTRATION OF OWNERSHIP; AND CROSS MEDIA OWNERSHIP LIKE THE T.V.3 NEWS SIMULCAST AT 6.00PM ON RADIO LIVE FOLLOWED BY A NEWS BREAK AT 7.00PM?, THAT IS SUCH A FEATURE OF THE GLOBAL ECONOMY IS EQUALLY MARKED IN THE CASE OF MEDIA AND INTERNET COMPANIES.
"Gone are the days of capital intensive broadcasters who require a satellite dish and a satellite."
N.Z AGAIN OFFERS AN INSTRUCTIVE EXAMPLE, SKY T.V, SPENT 7 YEARS CHALKING UP HUGE LOSSES AS IT INVESTED IN EXCLUSIVE CONTENT LIKE THE ALL BLACKS FOLLOWING ON FROM THE CAPTURE OF THE NEWLY NAMED PREMIER LEAGUE SOCCER OR THE RELEGATION ZONE FIRST DIVISION IN THE U.K.
AT THE LESS CAPITAL INTENSIVE END OF THE SCALE, SMALL CIRCULATION OUTLETS AND THE USE OF THE INTERNET DURING THE U.K 2005 ELECTION DID CONSIDERABLY MORE THAN REFLECT THE 'TIGHTLY CONTROLLED' DEBATE SANCTIONED BY PARTY MACHINES ON BIG BUSINESS ONLY MEDIA.
He seems to be banking on the notion that when the market totally fragments into self selected "commercial free" watching, that there will still be room for one or two really big players who can dominate by virtue of having an established brand.
LIKE HBO OR THE BBC ACCORDING TO TOM HANKS WHO STILL HASN'T FIGURED OUT THAT PAYING TO WATCH T.V IS 'COMMERCIAL'.
Thats until the media corporations who run the governments figure out how to take over the internet.
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