Although from 1980 to 2000, commercial television revenues grew by 3.8 per cent, since 2000, alternatives to television, including the Internet, Pay TV, DVDs and games, have gained in popularity, attracting both new audiences and advertisers, according to ACMA.
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This has seen revenue growth for the commercial television industry slow to an annual average of 0.6 per cent and profitability decline since 2000.
In the 2005-06 financial year the commercial television industry reported total revenues of $3,989.7 million, generating a profit (measured as profit before interest and tax or PBIT) of $620.4 million.
The study also found that industry PBIT increased between 1992 and 2004 at an average annual rate of 6.7 per cent. The exception to this trend was a period of unstable PBIT around 2000. Recently, over a two-year period from 2004-05, PBIT has fallen by an average of 27.8 per cent per annum.
Even though the ACMA study did not take into account IPTV, it does underline a 2006 story in Smarthouse, which predicted that “IPTV entrants as well as Internet video services will give free-to-air and pay-TV operators a run for their money, warns IDC”.
Quoting an IDC study, the report found that “consumers were increasingly turning to the Internet for video sources – though initially this is through P2P file sharing networks, other legitimate sources such as ReelTime or the Australian iTunes store”.