ABC/Foxtel, Stewart/Colbert: 2010

Without any fanfare, or even a press release ABC2 will commence screening The Daily Show. With The Daily Show at 19:15 each weeknight, followed by The Colbert Report at 19:40, ABC2 are to screen two of the finest topical comedy programs currently produced in the US. The aquisition of the program is symbolic of the diminishing value of pay television in this country.

Today in The Australian, Channel Seven CEO Kerry Stokes commented:

“I’m not privy to the pay-TV numbers, other than what everyone sees, but I think that any problems the sector might be experiencing go straight back to the economy,” he says.

“They are a consumer electable and I think consumers have been a bit uncertain in the past six months. My personal opinion is that Foxtel is going to continue to grow strongly over the next five years.”

“We’ve made a $400m bet on pay-TV and we would be prepared to double it if we got the chance because we’ve got faith in it,” he says. “The pay model, we think, is very sound.”

Is he right with this line of thinking? The second half of 2009 saw the subscription uptake stall, with the launch of FTA digital multi-channels held as a significant factor in consumers decision making. One cannot underestimate the threat that the new digital multi-channels do pose. Audience numbers are increasing. Just today Channel 9 made the following announcement:

Sunday night saw GO! make history as the first multi channel to hit a double digit share at a 5 City Level in the key 6pm – Midnight timezone with a massive 10.1% share for 16-39s.

This 10.1% share for 16-39s meant that GO! was 1.1% ahead of the combination of both ABC Network 5.9% (ABC1, ABC2 and ABC3) and the SBS Network 3.1% (SBS1 and SBS2) for the night.

With such a substantial rise in the quantity of viewing options, the value of pay television has certainly been diminished. Especially with the entry cost to digital television being as low as $30 for an entry level STB.

2010 has been mooted by many as being the year that we start seeing the rise of IPTV services. Last week Sony announced a suite of IPTV channels to be launched as a platform for its new Bravia units, iiNet are long-rumoured to be set to launch a substantial service, Telstra are set to launch their T-Box product, and there are many more potential offerings on the horizon. Between the FTA digital multi-channels and all of this IPTV competition, will pay television providers really be able to offer enough content to appease their customers? There seems to be just enough content now to make paying $40 a month just a little bit more questionable.

Foxtel has lacked imagination with a great deal of their programing offerings, particularly where scripted television is concerned. Several of their channels simply aped the well known brands of their FTA competition (the newest channel 13th Street being the most adventurous offering they have had in years). There are very few marquee programs exclusive to the Foxtel platform. And to lose any poses a serious threat to subscription television.

The Daily Show is one of these marquee programs.

The Daily Show is not one of the driving reasons for pay television takeup, but it most certainly is a strong brand that does a lot to enhance the value of the add-on The Comedy Channel. With ABC now offering it across the digital-only ABC2 channel, no doubt some subscribers will be questioning the value that pay television offers them.

There is no question that FTA broadcast viewership is in decline, but unless subscription services like Foxtel and Austar can make significant ground in enhancing the perceived value in their services, they’re certainly facing a harsher future than their FREE to air counterparts.

Jon Stewarts The Daily Show is an excellent fit on ABC2. It has a strong following among viewers and is seen as a respected brand by younger viewers. The ABC’s gain is certainly Pay TV’s loss.