Seven’s Australian Open tennis app a smash hit

People are streaming broadcast TV pictures of the Australian Open tennis on their smartphones in record numbers.

Seven plans to launch a paid-for app at the Rio 2016 Olympics

People are streaming broadcast television pictures of the Australian Open Tennis Championships on their smartphones in record numbers.

Host broadcaster the Seven Network has revealed it generated 550,105 online streams via a free dedicated app on day one of the Australian Open, beating the previous record of 488,000 for the 2015 Melbourne Cup horse race.

The TV Everywhere streaming strategy is enabling big media companies to hold their ground against the rise of streaming services such as Netflix, which has rapidly expanded into the local market.

The industry-wide TV Everywhere strategy was slow to catch on in previous years due to a lack of awareness, technical limitations and limitations on digital content rights in the agreements between broadcasters and rights holders like the major sports bodies.

But the amount of content that people are watching on TV Everywhere apps is now expanding as networks overcome initial challenges.

Seven chief revenue officer Kurt Burnette said he expected the broadcaster to smash the present milestone set by 7 Tennis as the tournament progressed and awareness of the smartphone app spread.

“We think we can get that up to 700,000, 800,000. It’s starting to become a meaningful number for the first time,” Mr Burnette said.

But he stressed that the main telecast remained the drawcard for viewers and advertisers.

Although it is too early in the tournament to determine if the popularity of the app is cannibalising the traditional TV audience, initial ratings suggest viewing levels are robust.

“The engine is still the main broadcast that delivers mass audiences, and big emotional moments,” Mr Burnette said.

“The app is additive to the main audience. We think it is adding about 1 or 2 per cent.”

When brands buy a TV spot their marketing campaign is extended to the app, enabling Seven to charge a premium to recoup the cost of the $35 million-a-year, five-year broadcasting rights deal with Tennis Australia.

It is estimated that Seven generates about $40m-$45m a year in advertising revenue from the Australian Open.

The fight to preserve the old-fashioned way of watching TV while exploiting the new is producing plot twists as dramatic as any daytime soap opera.

Executives are worried about the risk of launching online services that could eventually disrupt their core business.

Still, Seven is forging ahead and plans to launch a paid-for app at the Rio 2016 Olympics as part of the most comprehensive television and digital coverage of the quadrennial event yet. “This is going to be a warm-up for the Olympics,” Mr Burnette said.

In August, Seven became the first Australian broadcaster to extend live and free television to any connected device on the go.