Seven has launched its live streaming service and Nine will soon follow suit. But Nic Christensen asks whether the TV networks may be making a mistake not collaborating for the benefit of consumers.

If television was invented today would we have to buy a separate set for each network we wanted to watch?

Maybe they could agree on being on one device but the way things are looking at the moment you’s definitely need different plug-in or channel connector for each one – you know – to help build out and reinforce “the unique advertising ecosystem of the Seven/Nine/Ten/insert name here experience”.

That might sound like hyperbole but in many ways it’s analogous to what the TV networks are doing with the multitude of streaming apps they are making consumers download and what that is doing to the consumer experience.

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In the last week, we have seen the bosses of the two biggest TV networks finally cross the digital threshold.

Importantly they have done two things:

acknowledge traditional TV audiences – while still massive – are falling. clearly signal that they believe their long term future is in live video streaming be it to the home TV, mobile, tablet, desktop – wherever the consumer is.

As one senior TV executive told me this week for the likes of TV warhorses Seven’s Tim Worner and Nine’s Peter Wiltshire to make those public declarations it is “a very big fucking deal”.

Why the audience fall in television is important

There is a clear reason why the major free-to-air TV Networks are now pushing live streaming and, despite the rhetoric, it’s not just that they suddenly woke up one day and wanted to be geared to a digital world.

Their TV audiences are dropping significantly – particularly in under 45 year olds, who are moving online.

Take a look at this media agency analysis of Oztam audience figures, which shows how the number of people in key advertisers demographic of 18-39s and 25-54s have been falling over a decade. Note the major acceleration in these declines this year:

The key thing to take away from these charts – which show the average audience in prime time for all the commercial channels combined – is the audience decline among 18-39 year olds. In 2006 they were 24 per cent of the viewers -today they are only 15 per cent of viewers.

Among 25-54 year olds the results are similar but the falls are slightly less, down from 28 per cent to 21 per cent.

In both cases it is important to note that by far the biggest falls came this year. That’s no accident.

Has the dawn of video streaming caused that decline?

According to media buyers it’s hard to be certain of the precise cause of these falls but it’s clear the likes of Netflix are having some impact as is competition for eyeballs from a multitude of devices and other services.

A point the major TV networks, by and large, now concede.

But what is also clear is that television audiences are getting older, as these statistics from Roy Morgan show, there appears to be an inverse relationship between age and the number of hours of TV or online you spend on the respective medium.

Unsurprisingly young people prefer online and TV is strong among over 50s with the crossover mark appearing to be the 40-44 year old range.

Free to air increasingly has a problem because the key issue issue for media buyers is they are not getting the reach and frequency, important in the context of TARPs (target audience rating points), the measure of a specific target audience viewing a program at a time.

To quote one senior media buyer: “The (TARPs) waterline has dropped and now we have to go to the well more and more (read: buy more TV spots) to get the same results.”

If you look at Nielsen numbers for program stock – which is the top 100 programs ranked from the highest to the lowest – it clearly shows how that waterline drops.

Among 18-39 year olds:

Among 25-54 year olds:

While, surprise surprise, program stock among those aged 65 years old plus is holding up relatively well:

Television’s measurement challenge

Nine’s Peter Wiltshire argues that we don’t actually know the size of the falls in TV audience.

“There is no doubt that technology is changing behaviour,” he said this week. “Yes there has to be some audience change – and we have seen some falls in free-to-air this year – but without being able to capture where those audiences are through lack of measurement it has been hard to articulate the change.”

That may be true but I’d also argue that in the immediate term Seven, Nine and Ten needed to do something to cushion the falls and change their narrative to one where they were doing something about the situation, lest the media agencies start moving money out of linear television.

So we suddenly have an industry road to Damascus moment and a new focus on live streaming, across all devices, and you can expect to hear a lot from OzTam soon about cross media measurement to help reinforce this message.

Based on what I’ve heard at the recent Seven and Nine presentations the OzTam cross media technology, isn’t quite there yet in terms of deduplication of audiences – in other words ensuring we actually learn how many actual people watched The Block or X Factor across linear TV, timeshifted viewing, mobile, tablet, desktop etc – but eventually it will be.

Certainly this is something welcomed by the Australia’s top media buyers.

The boss of the Omnicom Group, which has $1.8bn in media billings, Leigh Terry told me: “As viewing becomes fragmented beyond the lounge room, as reading has moved beyond the printed newspaper, the real challenge will be the measurement and then value attributed to eyeballs via different device.”

“All are not created equally,” he warns media owners.

Terry also goes further citing the success of MCN in pushing to programmatic data trading, something Seven and Nine are now rushing to implement too.