The free-to-air multi-channels are currently garnering over 10 per cent of all-day viewing. Did you expect them to be garnering that sort of share at this point in time? Are you surprised by the success that they've had?
I’m not surprised at all. I think the level of viewing they are currently attracting is a really healthy sign for the multi-channels, it’s a result of the content they are using, and the way they are being promoted and leveraged off of the primary channels. I think one of the key points that contribute to me not being surprised is that it’s all free. It's Freeview. It is accessible to all.

They're referred to as the multi-channels, but in my view, it’s actually ONE, 7TWO and GO! - they're channels in their own right. Yes, they happen to be part of a broader channel strategy and investment by the networks, but they’re individual channels. And for some advertisers, we use the secondary channel and not the primary channel, depending on our needs. I think all of that forms part of why we’re not surprised, and in our view moving forward there’s every reason to believe that non-primary channel viewing will increase.


Do you think that the multi-channels have impacted on pay TV's growth? Have they provided an extra reason for people to consider whether they really need pay television, given there is more choice out there?
It's hard to answer that without numbers in front of me, but anecdotally, I think having more channels does create at least more consideration for the choice. But in saying that, prior to the multi-channels being launched, pay TV's subscriber numbers were relatively sort of ‘flattish’ anyway. From a pay perspective, what it really signifies is that the current pay-for model, and the pricing and the access and the engagement with the Australian population, has probably gotten to the point where it’s plateaued. So for pay to really take further steps, I think the model potentially needs to be given a bit of a rethink, pricing needs to be given a rethink, and that may stimulate pay. But I think what the multi-channels have done is easily find a way into people’s lounge rooms because they are free. The level of digital set-top boxes and digitally enabled televisions in households is at a higher level of penetration than pay TV, so it stands to reason that acceptance and engagement is there.


We're hearing that the multi-channels have been quite successful in attracting smaller advertisers who previously dismissed TV as being too expensive. Are you seeing this too?
If you look at the advertisers on the channels you can see that are new advertisers to the sector engaging in that way. I think pay TV has been a catalyst for attracting new, smaller advertisers to television and I believe the same strengths and benefits come through from multi-channels as well. It is an easier, more cost efficient means for advertisers who want to be on television, to be on television. That has broadened the customer base, in terms of number of customers.


The networks have also said they are also pleasantly surprised at the uplift from their existing clients on their main channels. How are existing advertisers using the multi-channels to build reach, and to target different audiences?
I think it's a little bit of both. From the reach perspective – for the initial period, and with the new panel through OzTAM as well, it wasn’t so much about incremental reach but more about maintaining reach levels. What we have seen is that the panel’s stabilised over a period of time, and reach is now at a point where we’re looking at ways to find incremental reach and new weightings for primary and secondary channels. I think it’s a really commonsense, logical view on the TV marketplace: with more channels, time spent viewing hasn’t dramatically increased, which means a re-profiling of what they’re viewing is taking place. As an agency, we identified and actioned very early in the piece that the advertising dollars needed to mirror and mask what we felt would be happening in the market, which is what is happening. So, from a reach perspective, maintaining reach, in some cases growing reach, is definitely the case.

From a specific demographic perspective – I think the multi-channels have largely been created to do that. It gives the networks the ability to further target over and above what they’re doing on their primaries within shows. We’ve seen themed nights on some of the channels, and obviously ONE has a very specific focus on sport which I think will be a real positive for that proposition as sporting rights become open and available for them to enhance the content.

I think the range and the quality of the content is best measured by the fact that the channels are getting audiences – I think that’s the ultimate measure. And we’re seeing advertisers leverage that audience through advertising. Lots of things are cost-efficient, it’s not just the multi-channels – the primary channels can be cost efficient too. TV is TV. So when you demystify the labelling of what these channels are, it’s actually – television. More television, more choice, more coverage, more content; and it all plays within the same expectations for efficiency and ROI. Nothing changes – our clients still want efficiencies, they still want a return on investment, and the multi-channels, in many cases, provide another opportunity to create that return or efficiency.


Are there any clear advertising benefits that come from the multi-channels being part of the free-to-air platform or being affiliated with a larger network, as opposed to an equivalent pay TV channel?
Really, what we do is we just keep things really simple. And if you look at what the multi-channels have actually done, they have given the agencies the ability to leverage their content themes - whether it's sport, under 30s, comedy, or drama or whatever the genre is, I think that’s one aspect.

The other is just simple coverage. The fact that the penetration of multi-channels into homes is what it is, is the most commonly used reason for using the multi-channels. It’s in people’s homes, it’s being viewed, the measurement is telling us it’s being viewed, and it’s becoming a mainstay....It’s easy to view, easy to access and that simplicity is appealing.


I suppose that speaks to viewer habits - that the multi-channels are becoming regular part of people's viewing repertoires?
What I think multi-channelling is doing for the broadcasters, is getting them used to selling multi-channels across multi-markets. And that really plays into a business model for the broadcasters as aggregators, as opposed to pure broadcasters. I think that’s going to bring with it endless opportunities for the networks, advertisers and viewers.

If you look at this from an aggregator mindset: if we look at the current free-to-air networks and see 7, 9 and 10 have got three channels each, you can look at that as nine channels, or you can look at that as three broadcasters with an audience that falls within that, which is completely able to be targeted in whatever construct or confine you want. There’s no reason why that simple view on the marketplace can’t be maintained, with the only difference being that instead of the networks having three channels, the networks may have 30 channels. And one of those may be a mainstay brand or three mainstay brands that we’ve gotten to know and love, like ONE, 7TWO and GO! as the additions to Ten, Seven and Nine– they are brands in their own right.

But nothing’s to stop the broadcasters creating ‘ONE Drama’, ‘ONE Cooking’ and so on, together with advertisers who are content-savvy and geared to create their own content channels using the aggregators as distributors or as partners.


From a media agency perspective, do you feel the networks are doing a good job of communicating how the new multi-channels are going, what viewing behaviour is like and so on?
Yes, definitely. It’s their new news, and it’s our new news. They’re definitely showcasing that. There is no doubt that we see that the multi-channels are an important, if not key priority within their businesses.


And what about advertisers? Do you feel that there's a good level of understanding amongst clients as to what they stand for, and how the new multi-channels can fit within their broader communications planning?
I think the level of understanding, considering the lifespan of these channels, is amazing. I think that’s a function of really strong and healthy dialogue about this between agencies and the networks themselves. Also, it’s actually not that difficult to understand - it’s three more channels, and the SBS and ABC’s. It's not rocket science. Maybe the comparison is - when a new magazine is launched into market, we get it – it’s a new magazine, and either you use it or you don’t use it.


With the upcoming launch of further multi-channels from the networks, once again there is talk of cannibalisation and fragmentation within the free-to-air platform. How do you think the market will react to the launch of the new channels?
I think fragmentation is now a reality of modern media and communications. So I don’t think anyone is scared of fragmentation anymore. I think it was a little bit scary 10 years ago because there was a re-shape. I think we’re now at the point in the cycle where fragmentation can be your friend. There is no doubt in my mind that the next round of channels will be welcomed, accepted quickly. They’re being introduced with the precedent of the first string of channels being accepted and used so I think they will be quickly adopted and worked with. I would be surprised if anyone in the market feels any differently.


With all of the changes that have been happening, and in particular the digital switchover, how strong is the free-to-air platform right now and how prepared is it for all of the changes you've mentioned?
The platform is strong. I think the platform has another three or so years to do a lot of the hard yards and to prepare for what the opportunity is, and to prepare so it can be key to shaping that opportunity. Otherwise I think the landscape will shape television, as opposed to television being a key shaper. I think there are a number of things that the networks need to do and I think that some of them are doing that, to really be at the front of the pack when all this happens. Otherwise there are other players in the media space who have been born and who are really comfortable in digital because that's where their origins are – that won’t need to be making such a big transition into a new space.

So there’s a lot to do. But all three of the Australian free-to-air networks are strong businesses and off the back of an almost 19 per cent jump in market – which is really the new high water for the first half, we haven’t seen a bigger Jan to June period in television history ever before - there’s little excuse for the TV players to not be using that growth to secure their future.