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The night Foxtel broke up with the television establishment
Welcome to an end-of-week update from Unmade. Today: Foxtel turns its back on the TV industry with the launch of a breakaway audience measurement system, and the Unmade Index falls to the lowest level since it started.
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Why Foxtel is divorcing the TV industry
Tim Burrowes writes:
It was one of those moments where the audience glances at each other to check they’re understanding correctly.
After two decades of consensus, Foxtel is walking away from the OzTAM ratings system.
On a night where most people were anticipating the main headline would be about Foxtel’s forthcoming aggregation service Project Magneto (or Hubbl as it is now officially known), there was a much bigger piece of news.
Foxtel is leading the push for a breakaway audience measurement service. We’ll come on to the politics in a moment - and there are a lot of them - but first, to what was announced last night.
Foxtel did its Upfronts in Sydney Harbour on a rainy night on Cockatoo Island. Like many of this year’s upfront events, the content took a back seat to more fundamental announcements about how media will be traded. The sausage preceded the sizzle.
The key announcement came from Foxtel Media CEO Mark Frain.
Foxtel will put its weight behind a new viewing measurement system. Initially it will be based on data from Foxtel’s million set top boxes, analysed by Kantar.
But the bigger move, which will reshape the TV measurement landscape for the first time since 1999, is what comes next. Foxtel has been working behind the scenes with the US-based measurement provider VideoAmp.
And Foxtel has already been building partners to join its coalition. SBS, Samsung TV Ads and “a number of global players” are already on board, Frain told the Turbine Hall audience. This breakaway group will be known as the Video Futures Collective.
So to the politics.
Those who were around in 1999 still recall how wild things got when the industry switched ratings providers away from Nielsen and created OzTAM - short for Australian Television Audience Measurement.
Hear the story of OzTam in the audio edition of Media Unmade:
The switch saw Nine lose audience compared to the old system. Proprietor Kerry Packer knew because he’d quietly paid Nielsen to continue with its surveys.
It was one of the final straws in the end of Packer’s relationship with Nine’s then boss David Leckie. Leckie ended up working for Seven - and turning around the network - after Packer got rid of him. The butterfly effect.
In truth, OzTAM has never been a true JIC, or joint industry currency, in that it is owned only by the big three networks - Seven, Nine and Ten. That always rankled a little with Foxtel, and perhaps fellow OzTAM subscribers SBS and ABC. The equivalent organisation in the UK, BARB (Broadcasters Audience Research Board) is also co-owned by the peak body for advertisers.
Nonetheless, until streaming became mainstream, OzTAM broadly worked as the source of truth for measuring audiences. Based on a panel of 1,400 households, OzTAM calculates the audience for every show broadcast. For all the talk of reach being what matters, the 8.58am ritual of checking the overnights is still sacrosanct.
When everything is streamed, it should be possible for data to be far more precise. Whether that means no more panels remains to be seen though.
Foxtel has been falling out of love with its fellow broadcasters for a while.
With OzTAM slow to launch a Total TV number, taking in combined audiences across broadcast, streaming and catchup, Foxtel began doing its own calculations, and suffered embarrassing headlines back in March when it got them wrong.
As Frain told the audience last night:
In February, it came to our attention that some of our audience data was being queried. And so began a seven-month forensic review of OzTAM’s methodology in collecting data in the Internet Delivered Sample.
“Resolution didn’t come quickly. It was frustrating for you and for us.
“Drama often obscures the real issues. And the real issue is that, in October 2023, we should all be able to confidently measure and transact digital currency in a digital world.
“We sit on data from over 1 million set top boxes and 3.1million digital customers, and we’d be negligent if we leave this data idling for another minute.
“I’ve spoken to enough of you to know that the limitations of a 1,400-household OzTAM panel has opened the door to alternative solutions.”
And so began the breakup.
To be clear, the full break up is not yet official. Foxtel has resubscribed to OzTAM for another year, but is unlikely to stay beyond that.
Instead, the reality is that the industry will now have to deal with two TV currencies. It was a prospect Nine’s chief sales officer Michael Stephenson warned against at this year’s Future of TV Advertising Forum, saying it would “create complete chaos for everybody”.
At the same event, Seven’s national sales director Natalie Harvey put it even more strongly: "We know that if there's multiple platforms and multiple audience data points that people are using in sources of measurement, that chaos will ensue. And it's not a path that we can go down.”
Note that both of them used the word chaos.
The development has echoes of another damaging war involving audience metrics. The newspaper industry - led by News Corp (funny that, considering they’re the majority owners of Foxtel) created its own metric to take on Roy Morgan Research. EMMA - Enhanced Media Metrics Australia - never found its place and folded in 2021 after eight unsuccessful years.
This time the situation is much more complicated. OzTAM is owned by the big three traditional players. The global streamers - Netflix, YouTube et al - want to keep their data in their own walled gardens, and where they are measured, will likely prefer a global standard.
Where Ten’s owner Paramount lands on this will be fascinating. The Paramount logo made it onto the screen last night, as one of the users of Video Amp data in the US.
Foxtel is already far more of a streamer than it is a broadcaster.
Its split from the rest of the television industry is now inevitable. The only question remaining is whether it will be an amicable divorce.
Unmade Index goes from bad to worse
Seja Al Zaidi writes:
The Unmade Index lost another 2.01% yesterday, dropping to the lowest point since Unmade started tracking Australia’s listed media and market stocks at the beginning of 2022.
The index landed at 572.3 points, meaning Australia’s media and marketing stocks have now lost 42.7% of their market capitalisations in less than two years.
Yesterday’s decline was mostly fuelled by poor performance on the part of the three biggest stocks on the Index.
Domain had the biggest drop - 4.07% - and majority owner Nine followed, dropping 3.19%. As a result, Nine’s market capitalisation fell below below $3bn, its lowest point this year.
Southern Cross Austereo fell 2.20%, and Ooh Media 1.14%.
At the smaller end of the table, Enero Group rose 2.9%, IVE Group 2.46% and Sports Entertainment Group 33.33%.
Time to leave you to your Friday.
I’ll be back with Best of the Week tomorrow.
I’m heading to the US later this morning. I had been due to take QF3 to New York, but Qantas is gonna Qantas, so that flight is cancelled. Instead, I’ve the pleasant prospect of navigating Los Angeles arrivals during the Friday morning rush, switching terminals and finding wifi to send BOTW before grabbing my connecting flight. If it doesn’t arrive on time, you’ll know that plan didn’t work out.
Have a great day.
Publisher - Unmade