James Warburton says Seven has still seen a ‘massive transformation’ despite its content being the ‘hardest hit’ by COVID-19
Seven’s plans for a content-led transformation, revealed last year by then-new CEO James Warburton, are well underway, Warburton has confirmed. This is despite the network being ‘the hardest hit’ by COVID-19 restrictions, which saw it lose two planned tentpole programs and caused big delays to others.
“From our perspective, obviously you can see the results. We were willing, we needed to transform the company, you saw all the dialogue when I first arrived. COVID-19 really accelerated the transformation in some senses, but you can clearly see the effect of the results,” he told Mumbrella.
Warburton, who had just presented Seven West Media’s results to investors, said that despite the clearly challenged market, Seven was a better business than it had been 12 months prior.
Warburton, with Big Brother host Sonia Kruger, is confident in the future of SWM
“At that time, the company had been impacted by challenging market conditions, it was a traditional business, run the old way and it faced significant headwinds. While our content spine remained solid, we were losing our ratings dominance due to a stale and stagnant primetime entertainment offering that was failing,” he told investors yesterday.
“With the Seven Studios strategy of creating our own shows and IP ahead of our audience ambitions, we had shut our doors to the external production community and we were introverted in our search for new and fresh ideas. As a result, we weren’t embracing some of the best ideas the market had to offer, through tried and tested international formats and content.”
But now, Seven Studios is up for grabs, and has been sold in the UK, and Seven is leaning into new, revived content, like Big Brother and Farmer Wants a Wife. Farmer, says Warburton, was never meant to be a Sunday and Monday show, it was set up to run Wednesday and Thursday as a tester, but as COVID-19 hit, Seven’s plans changed.
“We’re probably the hardest hit, we lost two and a half tentpoles. We lost Australia’s Got Talent, Holey Moley, and half of Plate of Origin, plus the Olympics and the AFL and Home and Away were both suspended,” he said.
But Warburton is happy with where Seven is now. It has its lowest television cost base since 2007 and lowest headcount since 2003. It’s reduced the debt which ‘prevented the group’s potential to pursue new growth initiatives, explore M&A and provide the flexibility to navigate significantly challenging market conditions’, and Big Brother gave it its highest reach in the key advertising demographic of 25-54 since the 2016 Olympics.
Seven’s broadcast share following the launch of the new content strategy [click to enlarge]
“We’ve fundamentally changed the construction of the audience profile in the demographics moving forward, which is great, and we feel good about Plate of Origin which launches next Sunday, then SAS Australia which is being filmed at the moment.”
Seven also teased four new tentpoles commissioned for 2021 which it will unveil at its upfronts event later this year.
Warburton says the former Seven West Media was bloated with growing costs, driven by ‘excessive complexity, layers of middle management and investment in the wrong areas’. When he replaced former CEO Tim Worner, who received a $2.57m termination payment following his surprise departure last August after six years at the helm, he set about reducing Seven’s debt through selling off assets, including TXA which is currently in process with Goldman Sachs, SWM Ventures, and reviewing the West Australian news business.
Part of that was a review from former Fairfax boss Grey Hywood, which was recently completed. Warburton said it was too early to comment on the review, but said the future of WAN would be ‘turbo-charging digital’ and championed the business increasing its digital subscriber figure.
As for the future – Warburton is confident that while the industry is currently struggling, decline in July was less than that of earlier months and with Seven in a new, lower cost base, position, the business is ready to capitalise when the improvement comes. He wouldn’t comment on revenue expectations, but says the content is in the right place.
“Every dollar we’re putting in is to drive audiences, drive revenue,” he said.
“It’s hard, realistically it all comes back to when the borders reopen and when the country can really get going again, I think that’s the fundamental piece that’s still delivering a little bit of uncertainty. We can see the market improving, we see some good improvement through the end of this year and things could turn very quickly as we get into next year.
“Our view is that the market needs to, and will, consolidate, but our focus is on transforming our company to ensure we can capitalise on this.”
7 are stretched enough as it is… can’t imagine a leaner team will help in the long run.
User ID not verified.
What is a ‘tentpole program’ please? A show about camping out?
User ID not verified.
What about 7 actually broadcasting some quality local drama programs like ABC & SBS?? If they can afford it, why can’t commercial TV networks? Then I might start watching 7 again. Even the AFL games shown are the leftovers from Foxtel!
User ID not verified.
… If a TV network can’t survive during COVID-19, it shouldn’t be in business.
It seems a bit unfair to the other networks who’ve delivered high ratings during a period where Seven is failing – due to bad management (as stated by James above for the previous years).
Let’s not forget, a record number of people are staying home and watching TV during COVID lock-downs.
This should be a bumper year for Seven, even without it’s missing Olympics and other tent pole shows.
User ID not verified.
Ratings don’t mean anything if nobody’s buying advertising space
User ID not verified.