The small party Olivia Gillen threw after her exams last year is part of a $2.5 billion-plus problem for Australia's free-to-air television networks.
The 19-year-old film student and her friends got together for a 15-hour marathon of RuPaul's Drag Race, a reality show in which drag queens compete to be "America's Next Drag Superstar" (screened in Australia on Stan, part-owned by Fairfax Media).
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Young people are killing TV
The seemingly unstoppable migration to internet streaming is costing broadcast television billions.
Group binge viewing parties are among the changes in viewing habits that are causing massive losses for Australian television networks. Gogglebox-style family viewing sessions are on the wane as younger viewers especially abandon broadcast for broadband. The networks have written off more than $2.5 billion in asset values since 2015, with more to come. Network Ten is conducting an "impairment review" which may prompt further write-downs. Its share price hit a record low earlier this month.
The kids are switching on all right, just not in the way the networks might prefer.
![RuPaul (centre) with celebrity judges on <i>RuPaul's Drag Race</i>.](/web/20170325114212im_/http://www.brisbanetimes.com.au/content/dam/images/g/r/f/8/h/3/image.related.articleLeadwide.620x349.gv65wh.png/1490363811542.jpg)
Tamatea Kohu, also 19 and a classmate of Olivia's at the Australian Film, Television and Radio School. He watches "easily" four hours of screens a day, but can't remember the last time he sat down with his family to watch TV. "Maybe three or four years ago?
"I tend to consume a lot more short-form content these days, on YouTube via smaller channels," he says, because the content is "far more interesting than anything you see on the big mainstream channels that are coming from the TV industry".
Younger viewers still love TV shows, as the phenomenal, enduring success of the likes of The Simpsons and Family Guy attests. But they expect to be able to watch what they want, when they want, on a device of their choosing. They've abandoned the networks' schedules ("appointment television"). They don't go to media outlets. They make their own viewing appointments with friends, streaming programs when they feel like it.
"People just aren't watching with that sense of flow from one program to another," says Stuart Cunningham, Queensland University of distinguished professor and a leading media industry academic. That's why live sport is becoming "more and more important to traditional television", he says, "because so much else can be watched at any time".
![AFTRS students Olivia Gillan, Nivetha Ramkumar, Tamatea Kohu and Nicola Macindoe. They're switched on, but not in the ...](/web/20170325114212im_/http://www.brisbanetimes.com.au/content/dam/images/g/v/4/h/n/z/image.related.articleLeadwide.620x349.gv65wh.png/1490363811542.jpg)
TV viewers are getting older, according to industry figures. The average age of an ABC viewer is 66, for SBS it's 61, 52 for both Seven and Nine, and 46 for Ten. Television remains a "tremendous brand, socially and culturally", says Cunningham, but if the once ubiquitous water cooler question "What did you watch on TV last night?" now "only occurs between people in their 60s", then "that is a problem", he says.
The desire for on-demand viewing is so strong that networks have had to overcome their former squeamishness about it, says Chris Stenhouse, CEO of Switch Media, which makes software for broadcasters, including products that facilitate and enhance the viewers' on-demand experience. "Previously broadcasters were reluctant about this but now they may even release [programs to a streaming service] before broadcast", he says.
![](http://web.archive.org./web/20170325114212im_/http://www.smh.com.au/cqstatic/gv667g/web_futureTV.jpg)
Switch Media is behind the mobile apps for Freeview Australia which deliver content from all the free-to-air networks to viewers' devices. It has also developed a product that allows ads to be inserted into live and broadcast streams so smoothly that ad-blocking software has difficulty detecting them.
![graphs showing TV and internet user numbers](http://web.archive.org./web/20170325114212im_/http://www.smh.com.au/cqstatic/gv66jt/web_digitaldisruption.jpg)
"They're fighting a rearguard action" says Steve Allen, media analyst of Fusion Strategy, about the networks. The current Freeview TV ad in which a boy is hanging out to watch a show with a girl, only to learn she's already watched it "at the bus stop, on the bus, at school, in the car, at Dan's house, when I was walking the dog" is part of the battle. Mr Allen estimates free-to-air advertising revenue is down about 5 per cent in the last six months.
But television is still the viewing choice of the overwhelming majority of viewers, he points out. He is scornful of the "rubbish methodology" used to measure audiences outside the ratings system, which he says exaggerates the impact of on-demand viewing, for example by counting all views even when they only last "three seconds".
Even so, "TV is a legacy business and the people who manage it have had to manage the decline of one massive part of the asset base while reinvesting in another part of the asset base which is where the viewers are", says Cunningham.
According to Nielsen Consumer & Media View, 7.1 million Australians used subscription video on demand services in 2016. That includes 2.8 million Netflix subscribers and the users of Stan, ABC's iView, SBS on Demand, Seven Play, Tenplay and 9Now. There was a 48 per cent increase in visitors to the Netflix website via a desktop, laptop, smartphone or tablet in the year to December. That included an 82 per cent growth in access via smartphones. Compared to the rest of the population, Netflix users were 89 per cent more likely to be 18 to 24-year-olds.