Media recession takes TV ad spend below $4bn for first time

The Australian TV industry has seen its revenues fall below $4bn for the first time in modern media history, new numbers from industry body Think TV have revealed.

The value of the total commercial TV advertising market including Seven, Nine, Ten, Foxtel and the regional networks (but not SBS) fell to $3,985,067,736 between July 2018 and June 2019.

Across the financial year, the number was down 4.08% on the previous 12 months. It is the first time since the Global Financial Crisis that the TV industry has slipped into recession.

However, the rate of decline slowed slightly in the second half. Previously released numbers showed that the TV ad market slowed by 4.56% from July to December 2018. The new numbers showed that the fall reduced to 3.57% from January to June 2019.

TV’s fall in ad spend is broadly in line with that seen across the wider media industry. Yesterday, the commercial radio sector numbers confirmed it was also in decline.

Think TV CEO Kim Portrate said in a press release: “The advertising market is feeling the effect of decreased consumer and business confidence as well as global political uncertainty and these results reflect this.”

The one bright spot for the TV market was in digital viewing, with broadcast video on demand growing by 32.24% across the year, albeit off a relatively low base, to revenues of $127m.

Portrate said: “Despite a dip in revenues in-line with broader market performance… what an impressive result for BVOD which continues to attract advertisers as well as audiences hungry to consume high-quality content on the device of their choosing. These figures confirm TV’s continued effectiveness for Australian marketers.”

Mumbrella understands that while Seven and Nine have approached a revenue share of the free to air market of nearly 40% each, the squeeze has been particularly acute for Ten, which has slumped closer to 20%. However, Think TV no longer officially publishes the revenue splits, so those numbers are unconfirmed.

Seven’s chief revenue officer Kurt Burnette told Mumbrella: “The level of decline we saw in television is in line with the total advertising market. BVOD grew by 30% and that is a bright side.

“The results do show the resilience of television advertising.”

Burnette said that news and sport remain the mainstay of TV schedules, and pointed to next year’s Tokyo Olympics as a major driver for Seven’s planning.

Ten’s revenue challenges were exacerbated by the transition away from sales house MCN back to an in-house sales team.  Ten’s chief sales officer Rod Prosser said: “There’s no doubt that the advertising market is challenged at the moment, but TV has proven its resilience time and time again. It continues to be the most effective medium out there, providing the broadest reach.

“We’re looking at a stronger second half with some of Australia’s biggest shows. Australian Survivor is having its best season ever and The Bachelor Australia is continuing to deliver the goods.

“We’re also seeing incredible audience growth in BVOD which is having its biggest year ever, opening up more opportunities for advertisers to creatively engage audiences. TV has become an ecosystem of platforms now and looking at it holistically, we’re optimistic about the market for the rest of the year.”

The Think TV numbers do not come as a particular surprise, with monthly Standard Media Index figures – which capture spend on behalf of clients by media agencies – having told a similar story across the past year.

Nine is currently Australia’s best performing TV company on the ASX, with a market capitalisation of $3.19bn.

Seven West Media’s share price is currently in the doldrums, slumping to an all time low today of 40c, giving it a valuation of $580m.

Regional player Prime Media Group is also trading at a historic low, with a market capitalisation of just $75m.

Southern Cross Media Group – which includes Austereo’s regional TV and radio assets – has seen its share price grow over recent months and is now valued at $915m.

Source: Think TV (click to enlarge)

  • August 8: This story has been updated to reflect an amended number from Think TV which initially said that the total market was worth $4,055,682,226, rather than the correct $3.985bn.

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