Magic of TV fading for advertisers

Advertisers are warning of a "tipping point" in the value of TV time that will affect spending habits this year.

Estimates on the number of people using television (PUTS) - fell in the second half of last year, although the ad rates remained buoyant.

The advertising and media buying agencies - which work for advertisers - are still big fans of television. They see it as a good medium that allows them to deliver emotional messages en masse.

But they are starting to question how many of their advertising messages actually reach consumers.

How many are being lost because of channel-switching or are filtered out by personal video recorders like MySky and My Freeview that allow people to fast forward through ads?

Association of New Zealand Advertisers chief executive Lindsay Mouat said a fall in the number of people using television in the second half of 2013 has brought the issue to a head.

"We are reaching a tipping point" Mouat said.

Such a tip would mean a shift for New Zealand advertising.

Mouat - who would clearly like to see rates lowered - believes that the magic spell has been broken.

According to figures from rating agency Nielsen for last November the number of PUTS was down 12 per cent compared with November 2012.

The main reason for the falloff in people using television last year is obvious enough. Consumers have many more entertainment options online and not all of them have broadcaster advertising attached to them.

The slump in advertiser spending on TV began in 2008 with the global financial crisis.

The year ahead for the main players

Sky TV

Rupert Murdoch's News Ltd has abandoned its investment in Sky. It has stepped up plans to take on a new range of digital competitors including the great consumer hope - Netflicks.

The company has embarked on its belated rebrand including an attempt to improve the content for its sports brands.

Coming up this year is an upgrade of the MySky personal video recorder enabling downloaded content to be viewed on TV and moves to provide much more content on the internet.

MediaWorks

After years weighed down by excessive debt, MediaWorks (owners of TV3 and Four) has big opportunities and challenges in 2014.

Its out-of-pocket former bankers swapped debt for equity to trade their way out of problems and recover some of their losses. Receivership forced an end to expensive programming deals with Hollywood studios.

The new MediaWorks company is buying programmes on the spot market meaning it is no longer encumbered with surplus B grade content.

It may well turn out to be a smart move - releasing MediaWorks from restrictions that TVNZ still holds on to.

But its management team will need to be nimble to ensure it gets the right content.

There are questions about the future of Four - and whether its UHF frequency could be used for a pay TV digital venture.

MediaWorks says it is committed to local content and the Government is committed to taxpayer subsidies of commercial TV programming including its high-rating talent show X

Factor.

A key issue will be how it handles increased focus on reality shows and whether the company maintains its focus on news and current affairs.

TVNZ

MediaWorks has its problems but at least its raison d'etre is clear.

The problem facing TVNZ is that there is little point in its existence other than its own survival. It has neither embraced public good broadcasting nor succeeded in making serious profits. News and current affairs standards slumped with the only positive signs being changes to TV One's ill-fated Seven Sharp.

That should bring it back into the daily current affairs arena it abandoned last year. Once current affairs was the major reason for tuning into TV One but last year it became a reason to tune out.

The most encouraging signs have been in the shift to digital television and a strong offering at tvnzon demand.co.nz.

However, while it is popular with viewers tvnzondemand.co.nz has yet to prove its worth commercially.

- John Drinnan of the New Zealand Herald

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