How Will New Media Affect Television?

Abstract

The next two decades will force major changes on existing media and leave them with a significantly smaller share of voice, mind and advertising dollars. Pay TV in various forms will be the main challenge, but the Internet and other interactive media also seem certain to change traditional media use and advertising practices.

In the United States, cable television has taken large numbers of viewers from free-to-air TV, and is expanding its share of advertising revenue. Pay TV's prospects in Australia are promising, though the largely American program content of advertiser-supported channels may limit their appeal. Pay TV may be in as many as 20 per cent of homes within three years, but its impact on television viewing levels will be only a fraction of that. Free-to-air viewing may decline by as little as 4 per cent by 2000, while television revenue may be unaffected by Pay TV.

In the medium term, digital technology will make various forms of interactivity practicable for both free-to-air and Pay TV. This may prove to be more significant than competition for advertising dollars, as it will allow both media to compete for marketing expenditure currently made outside normal advertising media.