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Media to rely on subscriptions over ad revenue by 2020: Deloitte

Source: The Sydney Morning Herald FEBRUARY 5 2018

The business models for news publishers are expected to undergo rapid changes in the next 24 months, with half of the revenue for media businesses tipped to come from subscriptions.

The latest data available shows that for every $10 in revenue from advertising in 2012, there was only $1 coming into media coffers from subscriptions.

 

Online news outlets are expected to push for a business model relying more on subscriber revenue in the next two years.

This is expected to shift significantly by 2020, with subscription revenue to match advertising revenue.

By the end of 2018, Deloitte’s TMT (Technology, Media and Telecommunications) Predictions 2018 report estimated there would be 20 million digital-only news subscriptions worldwide.

“We expect news providers to focus increasingly on generating revenue from subscriptions, typically as a complement to advertising, given the challenges they have encountered during years of reliance on ad revenue alone,” the report said.
People subscribing to news will remain far below those signing up to subscription video on demand services, known as SVOD, which is estimated to reach about 375 million subscribers.

The average charge for a digital subscription across platforms is $10.

“However, online news services tend to be among the most expensive individual services, often costing tens of dollars per month, and there are also many tens of millions more subscribers to printed newspapers and magazines,” the report said.

One of the challenges is the growing dominance of digital giants Facebook and Google, with the Australian Competition and Consumer Commission undertaking an inquiry into these platforms and how they divert revenue away from traditional publishers.

Research undertaken by Deloitte, including an annual survey of thousands of consumers across the world, found different attitudes to paying for news depending on location.

Deloitte partner Kimberly Chang said Australia “continues to face a clear challenge in terms of monetisation models in news” with most news consumers in the country “overwhelmingly reluctant” to pay for online news.

“Ninety per cent of respondents agreed they were not willing to pay because there is so much information available for free,” she said.

Despite this, accurate real-time news and deeper knowledgeable journalism were both in demand – but she said both were approaches that “require very different business models”.

Those surveyed from the United States were the most willing to pay for their news, and 18 to 34 year olds the most likely to pay.

“Publishers have also become more adept at identifying trigger points that can cause readers to become subscribers and at recognising what type and proportion of content to place behind the paywall,” the report said.

This included techniques like lowering pay walls on big news days, which would see some willing to pay when it was then reinstalled.

The surge in video streaming services was also tipped to continue to grow.

Video marketing specialists Switch Media chief operating officer Mark Wilson said there would be innovation to give users control over whether they wanted to pay or be served advertisements.

Research from the company found the average Australian had used 4.3 streaming services, with Netflix, the ABC and SBS rated as having the best overall user experience.

“Ads aren’t going to go away but more people will be able to choose to have less ads,” Mr Wilson said.

Exclusive research findings around Australian Streaming Habits – Infographic

Switch Media worked with Stable Research to conduct a body of primary research that explored Australia’s media viewing preferences and consumption habits. See below for a snap shot of some of the interesting findings from this research exclusive to Switch Media. Further insights to be revealed soon.

 

 

 

Switch Media COO speaks with ABC News around Australia’s viewing habits

Switch Media COO, Mark Wilson is interviewed by Michael Rowland and Virginia Trioli on ABC News Breakfast around the streaming habits of Australians, sharing insights derived from research commissioned exclusively by Switch Media. Findings reveal that Netflix, ABC iView and SBS On Demand are Australia’s dominant streaming players, with over half the population utilising the three services. Watch for more insights on how on-demand streaming services are changing viewing habits, including where, when and on what devices Australian’s are consuming content.

 

Infographic: How Netflix, The ABC & SBS Dominate Australia’s Streaming Wars

Infographic: How Netflix, The ABC & SBS Dominate Australia’s Streaming Wars

Source: B&TMagazine 01 February 2018

While Netflix dominates, new research shows that ABC iview and SBS On Demand are the other significant contributors to the growth of streaming services in Australia.

Check out the full findings in the infographic below.

According to new research into Australia’s streaming habits, almost seven in ten Australians (69 per cent) have watched Netflix, while close to six-in-ten (57 per cent) have used iview and more than half (52 per cent) have tuned in to SBS On Demand.

The research – undertaken by Stable Research on behalf of Switch Media – found the highest uptake of ABC and SBS is from older Australians, with 70 per cent and 67 per cent of over 65-year-olds watching iview and On Demand respectively.

Screen shot 2018-01-31 at 5.40.45 PM

Other findings of the research showed:

– Australians have used an average of 4.3 streaming services.

– The typical Netflix viewer is younger (with 96 per cent of 18-24-year-olds having used the service) and of a female skew (74 per cent of all female respondents).

– Netflix, ABC, and SBS are viewed as providing the best overall user experience with 97 per cent, 93 per cent and 90 per cent, respectively, of their audiences rating their experience above average.

– Close to half (39 per cent) of consumers use a laptop or desktop to watch streamed content, 34 per cent use an Apple iPad, and 30 per per cent use an iPhone. The Smart TV was close behind at 28 per cent.

– While a benefit of streaming is that it can be viewed while out and about, only 14 per cent watch streamed content on public transport and six per cent watch while travelling in the car.

– The most popular place to watch streamed content is the living room (86 per cent), followed by the bedroom (57per cent), while 15 per cent viewed streamed content while in the bathroom or on the toilet.

Switch Media co-founder and CEO, Christopher Stenhouse, said the research of consumer behaviour (based on more than 1,000 Australians) not only gave valuable insight into what services consumers were watching but how they are watching it.

“Being still in the relatively early days of streaming, with new players likely to emerge and new devices becoming available further changing how people view content, this research highlights some trends are emerging,” Mr Stenhouse said.

“From our research findings, it’s clear that audiences will experiment with various streaming services, however the most popular and sustainable services will be those that have the best content and user experience including benefits such as seamless ad transitions and content recommendations,” Stenhouse said.

“We are also seeing that Australians are increasingly becoming ‘binge’ watchers. While most consumers (80 per cent) use streamed content as a tool to catch up on programs they’ve missed, 60 per cent are also using it to ‘binge’ watch an entire TV series.

“Cramming an entire original series into a weekend or even one night is definitely becoming a popular pastime with consumers of all ages.”

The figures also show that on average, consumers stream on two and a half different devices.

“This was fairly consistent across most age groups and is a testament to our increasing tech-savvy population,” Stenhouse said.

Netflix, ABC iView & SBS Dominate Oz Streaming Wars

Source: ChannelNews 01 February 2018

Latest findings from Switch Media has revealed Netflix, ABC iView and SBS On Demand are Australia’s dominant streaming players, with over half the population utilising the three services.

Netflix comes in as the market leader, with 69% of Aussies using the service. ABC iView places second with 57%, and SBS On Demand closely behind at 52%.

Based on the response of over 1,000 Australians, the three online streaming providers also come in the best rated for user experience.

On behalf of Switch Media, Stable Research has found older Australians are the primary viewers of ABC iView and SBS On Demand, notching 70% and 67% of over 65-year-olds respectively.

By contrast, the average Australian Netflix user is substantially younger. 96% of 18 – 24 year olds utilise the service, with 74% of these female.

The firm’s latest research reveals on average Australians use 4.3 streaming services.

39% of respondents employ their laptop or desktop PC for online streaming. 34% opt for an Apple iPad, and 30% choose an iPhone. The Smart TV comes in at 28%.

The most popular location to watch online streamed content is in the living room (86%), followed by a user’s bedroom (57%).

Despite the flexibility online streaming offers, only 14% of respondents state they use the service on public transport. 6% watch in their car.

Switch Media Co-founder and CEO, Christopher Stenhouse, affirms the research reflects not only what Australians are watching, but emerging consumer behaviour trends also:

“From our research findings, it’s clear that audiences will experiment with various streaming services, however, the most popular and sustainable services will be those that have the best content and user experience including benefits such as seamless ad transitions and content recommendations”.

Stenhouse also emphasises the growing trend of ‘binge watching’ amongst Australians:

“We are also seeing that Australians are increasingly becoming ‘binge’ watchers. While most consumers (80%) use streamed content as a tool to catch up on programs they’ve missed, 60% are also using it to ‘binge’ watch an entire TV series.

“Cramming an entire original series into a weekend or even one night is definitely becoming a popular pastime with consumers of all ages.”

Switch Media provides streaming technologies used with content delivery for providers such as; Foxtel, SBS, ABC TV, FreeviewTV (20+ channels), plus more.

Switch bullish on streaming market future

Source: iTWire 30 November 2017

Online video content provider Switch Media claims Australia is set for an explosion in demand in the streaming market as content owners, from TV broadcasters to sporting associations and event promoters, seek to capture the new multi-screen savvy consumer.

Switch, an over-the-top streaming technology provider, forecasts greater demand as the streaming market continues its evolution with new services coming online and existing services seeking to maintain market share.

But according to its chief executive and co-founder, Christopher Stenhouse, subscription broadcasters need to diversify to keep market share by providing the flexibility of their content’s delivery to digital natives.

“Take for example Foxtel and their recently launched Foxtel Now box, which we worked with them to develop the software for,” Stenhouse said.

“Our software development allows Foxtel Now subscribers to take their Foxtel Now box anywhere in Australia and instantly gain access to their Foxtel Now experience, as long as they have a TV and internet connection. It also has the added flexibility of Chromecast and the ability to watch free-to-air TV, as well as the ability to install Android TV apps from the Google Play store.

“The subscription style experience in the flexible SVOD format is a significant step in the evolution of streaming technology.

“We don’t see the evolution of streaming slowing down, and as a result have further boosted our executive team with the appointment of Mark Johns, a former leader of broadcasting and media at Ericsson.”

Johns, who previously worked with Switch in its early days, has re-joined the company as global head of Sales after five years working in London as Ericsson’s head of Media and Broadcast Technology.

Stenhouse said the continued consumer uptake of subscription and free video-on-demand (SVOD and FVOD) streaming would also see new players come into the market, “providing even more growth opportunity for Switch Media, which has delivered 40% year-on-year growth since its foundation”.

“Just recently we saw Disney announce that it will pull its content from several SVOD services in the States to enable it to establish a foothold in the streaming market via its own direct-to-consumer SVOD service.

“And beyond that, there are entirely new fields beyond entertainment such as health, education and transport where organisations are looking to high-quality video streaming to enhance and expand service and engagement with their audience.”

Marketer’s simple answer to adblockers: ‘Make ads less irritating’

Source: The Sydney Morning Herald 27 NOVEMBER 2017

 

Online marketers are moving away from trying to design work-arounds for adblocking technology. Photo: Eddie Jim

 

Advertisers and adblockers have gone head to head, but experts say the focus of marketing companies is now moving away from technological work arounds to stopping consumers from wanting to download them in the first place.

Christopher Stenhouse, chief executive at Switch Media, warned technology would continue to be neck and neck, and so marketers should focus on making their advertisements more palatable to consumers rather than looking for work-arounds.

“Adblocking is hard to do on anything other than a laptop. If ads are less irritating, people are less inclined to install them,” he said.

And making them less annoying for video streaming consumers is not as complicated as it seems.

“Two to three ad breaks for an hour of content [is seen as acceptable],” he said.

Research by Stable Research of 1000 consumers on behalf of Switch Media found 28 per cent of consumers would only tolerate poor ad insertion if it was something they were “desperate” to watch.

Six out of 10 people surveyed preferred a single longer advertisement as opposed to several shorter ones.

And one in five surveyed were totally opposed to advertising, while 43 per cent didn’t “like” ads but were willing to tolerate them.

Some online marketers are currently avoiding technology blocking advertisements by using server-side ad insertion, Mr Stenhouse said.

This stitches the advertisements into the video content being presented, making it harder for computer programs to differentiate between the video content someone is trying to watch and the video advertisement.

It also stops buffering from happening on the advertisement – a key turn off for consumers, Mr Stenhouse said.

“It gets around adblockers and it feels much more broadcast-like … you can use nice transitions, fades and make it a better experience for the viewer.”

 

“If ads are less irritating, people are less inclined to install [adblockers].”

Christopher Stenhouse, Switch Media

 

The two major complaints from consumers were buffering on videos and the way they were served advertisements.

 

 

Advertising Week APAC director Clive Prosser said the technology was constantly evolving around marketing and advertising tools.

“It will be some businesses’ mission to reduce the impact of ad blockers as much as possible so they can maximise the impact of their digital advertising, while others will see ad blockers as a positive thing, and an opportunity to enhance customer experiences for consumers,” Mr Prosser said.

Marketo senior director of marketing for Asia-Pacific Chris Connell said adblockers evolved due to “generic, irrelevant” advertising, with successful marketers now looking towards highly personalised consumer engagement.

“For these marketing professionals, it’s not about getting around adblockers – it’s about making them unnecessary,” he said.