Free-to-air broadcasters facing falling advertising revenues may be offered a glimmer of hope by new technology designed to stop viewers blocking online ads.
Increasing numbers of viewers are switching from traditional TV to on-demand streaming, and many use ad blockers to screen out interruptions, hitting the appeal of online services to advertisers.
In response, Australian company Switch Media has developed a product called AdEase.
Public broadcaster SBS has signed up and Switch Media say they have a verbal agreement with another network, which they expect to be formalised by the middle of 2016.
The technology injects advertisements into the video stream before it reaches the viewing device, meaning ad blockers see a single video signal and cannot remove commercials.
SBS content director Marshall Heald said the technology, which is already on the broadcaster’s AppleTV service and will be rolled out on mobile apps within months, would make investing in Australian content more attractive.
“The seamless stitching of ads makes the transition invisible to ad blockers,” Mr Heald said.
“It’s a huge leap forward.”
Network Ten has signed up for a similar program from US-listed Brightcove.
Almost a fifth of Australian internet users were using ad-blocking technology in 2015, according Dublin-based tech company PageFair, a 10 per cent increase on two years prior.
The prospect of protecting ad revenues would be a huge boost to Australia’s free-to-air commercial networks, as earnings slump and the TV advertising market contracts.
Total advertising revenue for free-to-air broadcasters in the six months to December 2015 dropped by 1.76 per cent on the prior corresponding period, according to Free TV Australia.
The commercial trio Nine, Ten and Seven reported combined full year losses of nearly $3 billion in 2015, largely due to writedowns on their broadcast licences.
Switch Media chief executive Christopher Stenhouse told AAP his company’s anti-ad blocking technology could help stem the tide.
“All the websites that rely on ads to fund themselves are now at risk, looking at losing 20 to 30 per cent of their revenue because of these ad blockers,” Mr Stenhouse said.
“This guarantees for the forseeable future the revenue for the advertisers again … the ads will be there and you will be obliged to watch them.”
As well as the boost for broadcasters, Mr Stenhouse said TV consumers would benefit from a less “clunky and annoying” online viewing experience.
“The show will fade, just like sitting at home watching TV, and then instantly it plays the ad and then fades and goes straight back,” he said.
“Some people will go, `damn it, I can no longer skip the ads’, but it’s going to give them the content they want to watch.”