Analysts Warn Streaming Services Major Free-To-Air Threat
Investment bank analysts believe streaming services are going to decimate revenue for free-to-air television and radio, and potentially sink the value of sporting rights.
According to the Australian, Morgan Stanley analysts have identified free-to-air broadcasters, including the ABC and SBS, as in danger from viewers turning to streaming looking for more choice over content.
Commercial broadcasters face a decreased advertising spend on the back of declining viewership as well as increasing costs.
The government funded broadcasters could be forced to merge and have their combined budgets cut thanks to declines in spectrum licensing fees paid by for-profit rivals based on their advertising revenue.
Morgan Stanley advised the government might need to consider targeting streaming services with similar licensing fees.
Falls in advertising revenue would also hurt Australia’s major sporting codes, who have gotten used to consistent and exponential growth in the amount it can charge for broadcast rights.
Viewers have flocked to Fox Sports Kayo streaming service, which recently passed 200,000 subscribers in less than six months.
Morgan Stanley expects 70 per cent of Australian households to have at least one streaming service within five years, almost double the approximately 40 per cent which already do.