Commercial broadcasters in Australia are currently losing a third of viewing time to streaming services, to which two-thirds (66%) of Australian households are signed up, yet a leading industry analyst believes broadcasters can recapture these lost audiences, not least by embracing advertising-based video on-demand (AVOD).

Guy Bisson, research director at London-based Ampere Analysis, outlined his thinking at the recent Future TV Advertising Forum in Sydney, observing that broadcasters, by introducing their own streaming services, could engage more of the channel’s core audience as well as recapture viewers who don’t otherwise watch linear TV. (For more, read WARC's in-depth report: Streaming can help win back lost audiences to broadcast TV.)

According to an Ampere study of 2,000 Australian consumers, these lost audiences make up an average of 4% of the overall audience. What’s more, these viewers also tend to be wealthier and younger than their ‘linear-only’ counterparts, making them an attractive proposition to advertisers.

“It’s about recapturing that audience through streaming,” Bisson said. “Not only that, but that audience is more engaged with the brand of the channel. So, it’s not a lost audience: it’s a recaptured, new audience through streaming.”

In its analysis of Australia’s commercial broadcasters, Amphere found 9Now-only viewers to be the youngest, closely followed by Ten Play, while the wealthiest streaming-only viewers are tuning into ABC iView and SBS On Demand.

“In short, streaming viewers are a lot younger and a bit classier,” Bisson said. “That is a highly attractive demographic for advertising. [They’re] strong arguments for why adopting streaming strategies are absolutely crucial to shaping the future of free-to-air commercial television.”

And one way for commercial broadcasters to fight back is to adopt the AVOD model, which Bisson believes will be the main development for the broadcast industry in 2020.

“The future of streaming is all about embracing AVOD,” he said. “The agenda has been set by subscription to date, but 2020 is the year of advertising-supported streaming.”

Specifically, Bisson said he thought 2020 will be the year of hybrid models, with platforms such as Hulu, Peacock and short-form mobile video app Quibi proving that customers are willing to subscribe and watch ads at the same time.

NBCUniversal’s Peacock streaming service, for example, promises to cap advertising load at a maximum of five minutes per hour, which in some cases amounts to a single ad per show, even for users on the free, ad-supported tier.

“If Netflix has disrupted the subscription space, we're about to see similar disruption in the advertising-supported streaming space through variation and experimentation with ad load, which will disrupt the relationship between the viewer and the concept of consuming free, high-quality content from network TV,” said Bisson.

Sourced from WARC