Restoring media buyer confidence will ‘take time’, admits Ten boss McLennan



Ten has declared it is “absolutely committed” to closing the gap between its audience share and advertising revenue share but admitted it will take time for media buyers to regain their confidence in the network following the “unpredictability” of its scheduling and poor ratings.

Executive chairman and chief executive Hamish McLennan told an analyst briefing this morning that a “collapse” in its ratings at the start of the year – when The Biggest Loser and So You Think You Can Dance tanked – hit revenue and undermined market confidence.

But more stability in its scheduling, and a ratings boost since May thanks largely to MasterChef and The Bachelor, have paved the way for a greater sense of optimism, he said.

McLennan, speaking at the release of Ten’s financial results which saw the network cut losses by 41 per cent to $170m, said Ten captured an audience share in the capital city free-to-air market of 22.8 per cent but an ad revenue share of 20.5 per cent in the year to August 31.

Closing that gap “is an urgent priority,” he admitted.

“What we suffered from at the beginning of the year were two shows that were commissioned against an old strategy in a different time that caused a collapse in ratings. Because of that collapse, revenue share came off which was disappointing but understandable,” he said.

“We had a very good ratings bump from May onwards but there is just a lag in terms of a perception and how the market views you. It takes a while to catch up.

“It takes a while for the message to get across that we have ratings momentum and that we have new fresh vibrant shows that people want to place their money on. Looking forward, when we say we are going to launch a show, the media buyers are now more accepting that we will be able to nail it.

“What is also important is that we are bringing proper stability to our schedule. Monday to Friday between 5pm and 7.30pm we have a solid block that is growing ratings wise and that is resounding with media buyers.

Screen Shot 2014-10-16 at 12.56.55 PM“If you look at it from their perspective, while we have had good shows, we have been really inconsistent [in scheduling] and if you are placing media buying orders with Ten, or had been, because of our unpredictability that has just created uncertainty.”

McLennan said that without ratings “you don’t revenue growth”, adding it was expecting strong audience figures for the Big Bash cricket which kicks off in December and from I’m A Celebrity and Shark Tank which begin in the new years.

The reality shows offer “rich integration for advertisers” and are proven overseas, he said.

Asked whether Ten would close the audience and ad revenue gap in the 14/15 financial year, McLennan said: “We fully expect to close at a higher share. There are no guarantees but we are absolutely focused on doing that.”

Meanwhile, McLennan downplayed any early move into the video on demand market (SVOD) and predicted “a lot of blood will be spilt” as companies throw cash at the sector. Some players “will never see a return”, he warned.

“Some companies will commit a lot of resources to it and not succeed. We are not going to rush onto it,” he said. “We have spoken to everyone and everyone is talking to each other but we are not going to commit huge amounts of capital just yet.

“We are going to hold back and see how it plays out. There will be winners and losers, and we privately have a view about what is going to happen, and I think it will get messy for some players. Some will spend a lot of money and never see a return.

McLennan said in some instances around the world, Netflix has stimulated interest in local dramas around SVOD which has complemented the “linear network TV broadcast quite nicely”.

“What is really critical for the success of any SVOD platform in having good local drama and we have good local drama.” he said. “We think that is going to be a valuable component going forward. We’re quite relaxed.”

He refused to rule out a venture in the next 12 months but added: “We’ll keep our cards close to our chest. We are prepared to play, but we are not prepared to commit vast sums of money.”

McLennan also said he was also not prepared to overpay to acquire more sporting events despite the probability of strong ratings.

“We are not going to blow our brains out on AFL or NRL if we are think it’s going to be loss maker. We will be selective and strategic and see if we can carve out a role with AFL and NRL and be a little bit cheeky along the way.”

He said Ten had proved the doubters wrong with the Big Bash and predicted revenue and ratings growth this year.

Steve Jones


Get the latest media and marketing industry news (and views) direct to your inbox.

Sign up to the free Mumbrella newsletter now.



Sign up to our free daily update to get the latest in media and marketing.