Entertainment & Media Outlook 2011-2015 - PwC

“In the next five years, global competitionwill increase in the New Zealandtelevision and video market.”Sky TV’s Chief Executive, John FelletViewing increases asscreens multiplyDespite the growing number of screenscompeting for viewers’ attention,recent research shows television isstill a powerful medium, and NewZealanders are spending more timethan ever watching it – on average overthree hours a day. 17There are two large free-to-airbroadcasters; state-owned TVNZ witha 45 percent viewer market shareand MediaWorks with 18 percent.Sky TV is the major subscription TVoperator with TelstraClear offeringa subscription service via its cablenetwork in Wellington, Kapiti andChristchurch. Sky TV attracts about26 percent of the total TV audiencethrough its subscription basedchannels, and about six percentthrough its free-to-air channel Prime.Smaller, usually local, broadcastersand a racing channel, Trackside, 18account for the rest of the market.The major broadcasters already offercatch-up online video via their websites,and Sky TV recently launched its iSKYonline platform. The speed and costof data initially inhibited the growthof these services but both Sky TV andTelstraClear have agreements with ISPsand content providers which allow usersunmetered broadband access (Sky TVwith Vodafone, Orcon, Slingshot, Xnetand Farmside and TelstraClear withTrade Me, Clearnet Video and ZILN). 19Sky TV’s Chief Executive, John Fellet,has declared the iSKY service “a greatsuccess so far”, with the applicationdownloaded 75,000 times. 20 The mostwatched program to date is the USMasters golf tournament, with 8,000concurrent users.It is worth noting what NewZealander’s are watching online isoften either international content,or delivered through internationalchannels such as YouTube. The latestonline video rankings show thatGoogle-owned YouTube accounted forover half of all online videos viewedin New Zealand during February2011. New Zealand-based TVNZ andMediaWorks sites ranked seventh andeighth most popular respectively. 21Analogue switchoffapproachesIn 2010 the Government broughtforward the switch-off date foranalogue television. It will begin in2012 in the Hawkes Bay and WestCoast areas and will finish with theupper North Island in late 2013.About 98 percent of New Zealandhouseholds have a television, and ofthese just over 70 percent now haveat least one digital set. 22 By 2013 atthe latest, the remaining 30 percentwill need to choose between a oneoffpayment for a Freeview-enabledtelevision or Freeview set-top-box, orsubscribe to Sky TV or other provider.Sky TV’s Chief Executive, John Fellet,sees this as a difficult group to convert:“They are not really engaged withwatching television.” 2317 ‘How people watch: A global Nielsen consumer report’, The Nielsen Company, August 2010.18 Nielsen data as reported on the Sky Network website, www.skytv.co.nz, accessed 29 March 2011.19 ‘Sky confirms ISP partners for iSKY’, Sky Network media release, www.Scoop.co.nz, 28 September 2010.20 John Fellet, Sky TV, to PwC, 14 April 2011.21 ‘3 of 4 online users in New Zealand watch online video’, comScore press release, www.Scoop.co.nz, 31 March 2011.22 ‘2014 earliest possible date for real 4G’, Nigel Horrocks, iStart Magazine, Quarter one 2011.23 John Fellett, Sky TV, to PwC, 14 April 2011.New Zealand Entertainment and Media 2011-2015 | Outlook 21