Reinventing Seven: Has the network got what it takes to return to number one?

Last year didn't go exactly to plan for Seven, but have they done enough to turn it around? In order to sort fact from fiction, Mumbrella’s Zoe Samios sat down with the Seven West Media executive team to discuss the year just gone, and the year ahead.

On page 98 of ‘What Killed Channel 9’ by Gerald Stone lies a quote from former Seven CEO David Leckie.

“We thought Seven should become like Nine, but we’re not Nine. We’re heartland Australia. The key to our success is being comfortable with what we are,” he says.

Leckie, who resigned as CEO of Seven West Media in 2012, was credited with turning around the fortunes of Seven in the mid-2000s, helping the network move away from its nickname ‘Channel Second’ and shifting towards more consistent ratings successes.

The quote is top of mind upon entering a large narrow boardroom at Seven’s soon-to-be-gone Pyrmont office.

It’s been five years since the programming boss of Leckie’s era, Tim Worner, took the helm of Seven West Media, and today he’s seated alongside chief revenue officer Kurt Burnette, chief digital officer Clive Dickens and national program director Angus Ross.

From left to right: Clive Dickens, Tim Worner, Angus Ross and Kurt Burnette

Seven did not finish last year on a positive note. Following press coverage over Worner’s affair with former staffer Amber Harrison, the company finished the year with a number of unsatisfactory programs, the announcement of $25m worth of job cuts and its first loss to Nine from a revenue perspective in 13 years.

“I’ve been on record as saying that the back half of 2017 was something that we weren’t proud of,” says Worner. “It was a performance that we found unacceptable. We set about devising a plan to address that and we’re seeing that plan now.”

For Worner, Seven’s success over the last six months has been “lost” on the industry. As Nine moved from ratings success to success and CBS took over Ten, Seven fell away from the headlines, despite rating well throughout the Pyeongchang 2018 Winter Olympic Games and the Commonwealth Games.

Source: OzTAM, Metro, 2018 Ratings Weeks (7-35), 1800-2400, Commercial Shares. Data: Consolidated 7 (Live + As Live + TSV7) prior Wk 35, Overnight (Live + As Live) Wk 35.

This year, Seven rated number one during the 17 days of the Winter Olympics in every market and every key demographic. The network claims a total of 16m viewers were reached and 103.8m total minutes were live streamed.

As of last Sunday, Seven Network’s total share sits on 30.7%, up 1.1 percentage points from last year, while Nine Network is on 27.4% and Network Ten sits on 17.3%.

On top of that, Worner claims the record ratings and share still exists without the Commonwealth Games.

But “it’s a bit of a nonsense” thing that the network paid for a “fantastic piece of content”, and can’t claim a win off the back of it.

“It should be recognised for the job that it did for the business. Why do we exclude it? Why is that common practice?”

Something made clear from this conversation is just how passionate Worner is about the television ratings. It’s anticipated, given his background, but it becomes evident how much a fall in ratings bothers him. So how did they fall behind?

According to programming boss Ross, Seven “didn’t have enough options”.

“When you combine that with a couple of underperforming programs you don’t get left in a pretty space, so the planning into rectifying matters for 2018 obviously started during period,” program director Angus Ross says.

So off Ross and his team went, focussing on making the most of the content the network had purchased – the Winter Olympics and The Commonwealth Games – as well as ‘reinvigorating’ existing shows.

The year kicked off with a revamp of MKR, which ended up delivering total video audience of 1.97m viewers for each episode. According to OzTAM data, MKR saw an 85% year on year increase in video player measurement (VPM) viewing, through on demand platform 7Plus.

Another show Seven was proud of was House Rules, which delivered a total video audience of 1.48m viewers per episode.

But the circuit breaker for Worner was The Commonwealth Games, which helped reinvigorate My Kitchen Rules.

“If you have a look what’s happened since then, we were able to one – produce a spectacular coverage of The Commonwealth Games which really resonated with audiences right across Australia and then two, harness the momentum that we were able to generate in those 10 days or so and really it ride it through,” Worner says.

If there was one thing the second half of last year underlined, it was that all the television businesses are “hit driven businesses”.

Seven’s first half success was ‘lost’ on the industry, says Worner

“If you’ve got content that people want to watch, they want to make an appointment to watch it, everything gets a lot easier very quickly,” he says.

“That has really been underlined and going forward to have the footy and the cricket year round, that is going to be the foundations of this company going forward.”

Ross adds it’s also important to look at the suite of channels. “We are aiming for as many eyeballs as possible,” Ross says.

“What we did last year was we made a very concerted decision in targeting 7mate to be the number one multi-channel. Part of that involved going and picking up a bunch of programming from 20th Century Fox, in light of the collapse of their arrangement with Ten. “

And yet despite the success of 7mate and other programs, Seven’s new shows, Australian Spartan, Single Wives, Back with the Ex and later Dance Boss, weren’t delivering the mass audiences that everyone had hoped for and were hammered across headlines for it. Interview with Andrew Denton premiered with 578,000 metro viewers and finished with 473,000 metro viewers. This week the network launched Take Me Out, which averaged just over 600,000 for the premiere episode.

“It’s particularly hard when you are trying to launch a brand new format that you’ve created yourself,” Ross says.

“That’s the hardest job of all as opposed to picking up an existing format from overseas where a lot of learnings have already happened, but we do have a track record in format creation and being able to launch shows.

“We just we keep persisting but it’s tougher. You’ve got to stick with shows longer than you used to. And in our case because of Seven Studios, if it’s something that we have originated and therefore own and control ourselves, those rewards are really strong.”

Seven Studios, which is the production house of Seven Network, is spoken about fondly. Worner believes it’s an advantageous department for the network and its success in the long run. It’s even led to the launch of a co-production with Netflix in recent weeks.

But even with Seven Studios, Ross’ job is still as challenging as Nine programming boss Hamish Turner’s and Network Ten’s chief content officer, Beverley McGarvey’s.

Despite trying to move away from the ‘roast chook’ image, Ross explains that being “too cool for school” has never really worked for Seven.

Veering away from the ‘roast chook’ image hasn’t always worked for Seven, according to programming boss Angus Ross

“We’ve always skewed very female in the majority of our programming and sometimes – we still call ourselves roast chook – and when we veer away from that we don’t always get the results we expect. We’re a big broad network driven by total people and people 25-54 and that’s the sort of programming that resonates as opposed to I guess too cool for school.”

One of the ways Seven has looked to extend its offering to advertisers and consumers in the last year is through the revamped 7Plus – formerly known as Plus7 and living on the Yahoo7 joint venture. 7Plus is an on demand service for consumers, and those who sign in are provided with more in depth coverage of a particular event or a behind the scenes of a drama, for instance.

But the network has been criticised for its platform, which does not enforce compulsory sign in. When it launched addressable advertising last year, questions were raised as to how it had the data to target consumers, without compulsory sign in.

“There’s a trust issue that has to be maintained and consumers want to understand what they’re getting back in return,” Seven’s chief digital officer Clive Dickens explains.

“What we’ve done with our membership is make sure that people who are signed in over the coming months will actually get additional features, additional benefits and additional content which is much more reasonable value exchange.

“This has been a three year approach to bring back our content in-house but in a way that makes the most sense for our shareholders rather than a big bang.”

Controlling video assets makes sense in the modern media landscape. But Worner does not regret the venture it commenced with Yahoo more than a decade ago.

“For a large part of that decade it was an excellent move and proved to be a profitable arrangement. But just with the change in viewing patterns it’s become clear that for Seven West Media, it’s going to be more and more important to control our content online and to have 100% control,” he says.

Seven pulled its streaming platform from Yahoo7 at the end of last year

“Our challenge is to continue to match the speed of change going in our marketplace inside our company. There is an undeniable change in viewing patterns therefore we have to change our company to make sure we are taking the very best advantage of that change in viewing patterns.”

Dickens says the 7Plus platform has seen strong growth since launch. Currently, 7Plus’s unique audience sits at 2.468m, compared to 9Now’s 2.670m and Tenplay’s 1.649m.

“Yahoo7’s audience is about 10m Australian a month that use it, Seven’s audience – excluding Yahoo7 – is 5m. Go back three years, Yahoo7’s audience was 10m and Seven’s [online] audience was zero.

The year in broadcast video on demand. 7Plus includes7Plus,  7 Tennis, 7 Olympics, 7 Gold Coast 2018, 7Sport Application (M), YahooTV, Yahoo Video & Yahoo Video Application (M). Source: Nielsen Digital Panel, January – June 2018, P2+, PC, Smartphone and Tablet, Text 

“Working out how audiences and advertisers navigate your advertising and product ecosystem is really important.”

But Seven has not only been competing with its free to air rivals. It has also been forced to compete against the program offerings from subscription video on demand services such as Netflix and Stan.

However for chief revenue officer  Kurt Burnette, changing the marketing strategy won’t help the situation.

“It’s still not cool to sit down and watch a series of Home and Away on 7Plus, but it should be. The numbers are certainly showing that 7Plus is doing similar numbers than a whole multitude of shows on Netflix, but we seem to be missing that point in the market. It is up to us to to bring that coolness back.

“But I’ll tell you what – what is uncool is when you change your marketing strategy and your KPIs on brand performance and results go through the floor. That’s uncool and that’s what’s going to bring coolness back to TV,” he says.

Burnette is trading off last year’s ratings figures going into the second half. But despite this, he says all agencies want is “surety” and he’s confident Seven can continue to deliver that.

“We will be replicating the same sort of numbers that we did Jan to June this year into next year and at the end of the day that’s what advertisers and agencies want to know really, it’s this notion of surety. Consistency is a tough thing to do but surety well that’s powerful,” he says.

“At the end of the day the jury’s probably still out on a few shows and that goes across the board. This game is about hits and not everyone always has hits. Now you’ll start to see over the next few months a couple of other shows that we hope to pop.”

Executives’ concerns over the excessive price of sports rights were splashed across headlines in 2017. And despite those headlines, Nine ended up winning the Tennis Australia rights while Foxtel and Seven locked in a deal with Cricket Australia.

Under the deal, all domestic test matches and Big Bash Leagues games will be simulcasted on Seven and a dedicated Fox cricket channel. Foxtel will have exclusive rights to the One Day Internationals. Digital rights will also be held by Foxtel and will form CA’s digital arm, the Cricket Network, which will see broadcast-quality streaming of matches not broadcast by the two networks available through cricket.com.au and the CA Live Pass.

“There’s been a tendency to underestimate the magnitude of the cricket,” Worner says.

“It is not two weeks of sport in January. It’s four months and over 400 hours of live sport.

“The market hasn’t quite appreciated just how much cricket there is going to be and also it’s going to be quite different – for the first time we’ve got the two most popular forms of cricket on the one network.”

Seven plans to use both forms of cricket to cross-promote one another, something the network thinks will be incredibly powerful. But given the large investment in sport which occurred at the same time as a major ball tampering scandal, it begs the question: can they do it in the ratings?

“It’s just not going to have any effect at all,” Worner says. “In fact I actually think it’s going to build even more curiosity combined with the fact that it’s an all new approach to broadcasting cricket. It’s an all new commentary team. I would say that interest is probably going to be heightened more than anything else.

Tim Worner, James Sutherland and Patrick Delany at the Cricket Australia rights announcement

So where does all that leave Seven Network?

After a strong half, Seven is entering new territory once again. Australian Spartan, Dance Boss and Single Wives didn’t deliver huge audiences, but there’s still a number of programs up Seven’s sleeve.

Worner believes he will see strong year on year growth for the half.

“We’d like to continue to get our every day and every night shows to grow – being Sunrise and Seven News – to keep them growing strongly. And in terms of revenue to improve and I think I’d have to say quite dramatically, improve our revenue share on the back half of last year. With the cricket, we have a good chance of doing that,” he says.

Sunrise and Seven News are both growth areas for Tim Worner

“Our people have done a lot of hard work to match the speed of change and we are now at a point where we are getting ourselves set up for a really good FY19. It doesn’t mean that the hard work is over, because it isn’t. There will be more to do… but certainly we have completely changed our company. It is a very different company to what it was four or five years ago.

“That doesn’t mean the transformation is over or that we are even more than halfway through it. It does mean we have momentum.”

Worner has been previously described by Ross as someone with “reliable gut instincts” and a rare talent. His former boss Leckie described him as the “most successful” programming and production executive in the country in his time.

As the interview wraps it’s clear the programmer in Worner never left him. When asked how he views his business, he describes it as a “storytelling organisation”.

“We’ve got the newspapers in Western Australia and their online offerings. We have a chain of regional radio stations in Western Australia that not many people know about on this side of the country: The RedWave team. We have our two television businesses, so there’s the broadcast network that is the number one network in the country and as I say has its highest share in history to any season to date.

“We have Seven Studios so we’re also the largest producer of television programming in Australia. We have Pacific and then we have Seven West ventures which has shareholdings in businesses like Health Engine and Airtasker.

“We’re very happy with where we are.”

To hear the full interview with the Seven team, have a listen to this episode of Mumbrellacast.


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