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‘CBS wants to control it, it’s as simple as that’: Ten confirms exit from MCN

Network Ten has confirmed it will terminate its contract with Multi-Channel Network, telling an audience at Advertising Week is was not about drama, but rather CBS controlling monetisation of content.

It comes after News Corp’s The Australian reported the venture was set to end this morning, with Ten bringing sale in-house.

Adweek 2018 ThinkTV panel (L-R) Kurt Burnette (Seven), Michael Stephenson (Nine), Mark Frain (MCN), Kim Portrate (Think TV), Rod Prosser (Ten), Nicola Lewis (Group M)

The CBS owned-broadcaster owns 24.99% of MCN while Foxtel, which News Corp owns a majority stake in, and Fox Sports, own the rest. Today on a panel moderated by Group M’s chief investment officer Nicola Lewis, Rod Prosser, general manager for client revenue and partnerships at Ten, and Mark Frain, CEO of MCN, confirmed sales would be brought in house from January 1, 2019.

“What a big day in media again it is. For anyone that has checked Mumbrella in the last three minutes, you’ll know what I’m talking about. Obviously another big day of news within the TV sector and as a group, primarily Rod and Mark, wanted to tackle the elephant in the room and talk about speculation that has been gathering for months and months and that speculation was that Ten and CBS would look to in-source their data capability,” Lewis said.

Prosser said it was about being “pragmatic”, assuring there was “no drama”.

“The reality is this is not about MCN, this is about CBS and Ten.

“CBS’ business is about content generation and the distribution of that content and importantly the monetisation of that content. They don’t have a set up like this anywhere in the world. For them, that last piece which is the monetisation part is very important. They want to control it, it’s as simple as that. It’a nor about performance, it’s not about personalities, it’s as simple as that’.

“We’ve done a lot of great things over the last three years with these guys – nearly four in September and the fact is we’ve grown our revenue and revenue share,” he said.

“We view this as more of a clinical decision and there is no drama and these guys will be working on our business for the next five to six months. January 1 is the date but we thank them immensely for all of the efforts over the last three, three and a half years.”

MCN’s Frain echoed Prosser’s comments.

“There isn’t a market in the world where CBS operates like this,” Frain said.

“They want full control and they want full accountability from their own team to manage their revenue performance moving forward. I will watch from afar with interest the beating Rod that takes from them overseas.

“This decision is nothing to do with MCN performance, it’s nothing to do with the relationship that we’ve got with the Ten business…we have been aligned on many things we have done together,” he said.

“On the baseline performance metric, outside of the innovation, the data, the automation that we’ve brought to the Ten business, MCN had performed admirably.”

In a statement, Paul Anderson, CEO of Ten, said MCN had been a valuable partner.

“Together we have achieved some great results and introduced many industry-leading initiatives. In an industry undergoing rapid change, Network Ten is making a strategic shift in sales to more closely align with CBS across all platforms. I would like to send my sincere thanks to Anthony Fitzgerald, Mark Frain, and everyone at MCN for their enormous contribution over the last three years. We will continue to work closely together to ensure a smooth and stable transition period,” Anderson said.

Ten also announced the launch of its new advertising sales department, with Anderson describing it as a “strategic shift” in sales.

“Our priority is to monetise our premium video content to accommodate changing viewing habits and provide measurable and transparent value for our clients. Controlling the selling function in-house is the best way to achieve that.

“CBS has solutions, experience and systems in many key sales areas, including data, addressable advertising and dynamic trading. Ten’s new Sales platform will fully leverage the expertise of CBS,” he said.

The Network Ten sales department will include a new digital unit, Ten Interactive, which will use CBS Interactive’s technology platform. Ten will also launch a new automated trading platform, Ten Exchange.

Ten’s split comes two weeks after the departure of CEO Anthony Fitzgerald, who was quickly replaced by marketing and sales boss, Mark Frain. It also follows the acquisition of Ten by CBS last year. Since then, rumours had been circling around the future of the joint venture, given Ten had the capacity to bring capabilities in-house.

Not long after that, AdNews reported that up to 30 contractors and full time staff had been made redundant at the business, following the completion of the company’s new technology project.

Earlier last week, the Australian Financial Review’s Rear Window flagged CBS executives had been in town, as the contract deadline neared its end.

It comes the same year as record low television program shares for Ten. In the first offical ratings week Ten’s network share (including secondary channels Eleven and One) was 14.2% while its main channel share was just 9.8%. The week following the number grew slightly to 15.2% for the network and 10.5%. But following I’m A Celebrity Get Me Out of Here, Ten’s main channel share fell to 8.4% while the network obtained a weekly share of 13.2%.

For fiscal year 2018, Ten contributed 23.3% to total revenue share down on FY17’s 24.1%. From January to June 2018, Ten’s revenue share sits at 23.04% of total free to air market.

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