Australian free-to-air networks are fighting harder than ever to combat pay TV and the internet.
While many free to air commercial stations are struggling for ratings growth this year, pay TV is soaring thanks to an increase in take-up.
According to the latest OzTam figures, as of July this year more than 2.1 million Australians - 28% of Australian homes - have pay TV. That's up from 1.55 million five years ago.
Media expert Belinda Smaill from Monash University says viewers are turning to pay TV more than ever since its introduction in the mid 1990s, because they are not being satisfied by free to air.
"We're now entering into a different era for broadcast television, which is a movement away from broadcast free to air
television, towards more niche programming, digital media and increased choice, and the fragmentation of the market, of television watchers," Smaill told AAP.
"So I think there's probably a sense of inevitability about a move away from free to air. This is a point in Australia where this is starting to happen, viewers increasingly want a wider range of choice than what the dominant norm of prime time television can offer."
This week, regional pay TV provider Austar posted a first half net loss but was claiming big wins thanks to growing its subscriptions to more than 700,000 this month.
Foxtel will announce its results in mid-August, and is also expected to show impressive subscriber pick up rates. In viewership, all pay TV providers are enjoying impressive recent ratings.
In the week to July 26 pay TV stations had a 21 per cent viewing share across metropolitan viewing markets in Australia.
That was greater than all the individual free to air networks, except for the Seven Network, which garnered 22.4 per cent of the audience.
The stellar pay TV ratings came largely thanks to sport - with the Bledisloe Cup grabbing an audience of 348,000, the
Panthers-Tigers NRL game 247,000 and the Sydney v Adelaide AFL match picking up more than 150,000 that weekend.
Ratings have also soared this year thanks to programs like the reality show Australia's Next Top Model, which had a large following and much publicity.
Australian Subscription Television and Radio Association (ASTRA) commercial director Ian Garland said the industry was able to attract audiences because it focused on innovation and digital technology and services like viewing on demand.
"It's the ability to give consumers what they want, when they want," Garland told AAP.
"Viewing on demand, interactive features - all those things are really making compelling consumer competition. It comes down to three things innovation, quality and choice."
The free to air networks are also trying keep up with technology, including Seven with its recent push into the digital
video recorder movement with Tivo to rival Foxtel's IQ system.
As people look to the internet for their entertainment fixes, networks are searching ways to engage viewers.
The ABC last week launched an internet TV service called iview, allowing people with high speed broadband - about a third of the population - to access a selection of popular TV shows.
In just its first week, iview had a total of 144,000 visits and 318,000 views. As more and more switch to higher speed broadband, the ABC is confident it will get more users.
While the Seven and Ten networks are down on last year's ratings, Nine has picked up from a lacklustre 2007 and the ABC is enjoying fantastic reception from viewers, thanks to shows like Spicks and Specks and The Gruen Transfer.
Smaill says networks are trying to meet the challenges.
"Broadcasters are doing everything they can to keep audiences," Smaill said.
"They're trying all kinds of new programming strategies and they keep chopping and changing in order to compete with one another and to compete with pay TV."
Smaill also weighed into the debate about the future of television.
"There are some people that have talked about the death of broadcast television," Smaill said.
"I don't see that happening because I think there's huge segments of the audience out there that are of a different generation, or different economic situation who are still going to rely on broadcast television, perhaps the move towards pay TV at a point will reach its maximum level."
