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Seven renews content focus, details $170m in cost-cutting

Seven West Media (SWM) is expecting to continue its COVID recovery in the latter part of the year, despite admitting the market remains “short and volatile”.

Speaking at Thursday’s AGM, managing director and CEO James Warburton said the market has improved since it delivered its yearly results in August, with metro free-to-air down 5% YoY from July to October.

SWM managing director and CEO James Warburton

Warburton made it clear that content would continue to be the priority. “Competitive content drives revenue. So far in FY21 we’ve seen strong revenue share performance when we’ve delivered engaging content,” he said.

Seven’s 2020 content schedule was arguably hit harder by the global pandemic than most, particularly with the postponement of the Olympics Games in Tokyo. They will now take place in July of 2021.

Warburton went on to say that SWM has now fixed “the holes in our schedule”, and that although ad revenue is set to drop 5% for the first half of FY21, “cost savings YTD… have more than offset this decline”.

That cost-saving has allowed SWM to reduce its net debt “to approximately $425 million at the end of October with $750 in drawn facilities and $325m cash,” Warburton said.

Diving into the specific numbers behind the cost-cutting, SWM delivered $170 million in permanent gross cost reduction initiatives, with temporary savings initiatives of $51m actioned in March.

Warburton said the majority of those savings would be realised during FY21.

“The combined outcome of these savings has been transformational, resetting the business’s cost base, simplifying its structure, optimising processes, reducing headcount and
addressing uneconomic contracts,” he continued.

“We have started the transformation, but we are not finished. We’re targeting $30 to $50 million in further cost out initiatives in FY21 which will be incremental to the savings actioned in FY20.”

7plus outperforms the market

One clear area of growth for SWM came through its 7plus platform, which trended upwards along with the BVOD market (up 37% in the period from July to October).

7plus outperformed the market over that period, capturing share and growing 62%.

7plus on mobile

Warburton highlighted the extent to which SWM’s BVOD offering had grown in the last 15 months, when it was a distant second.

In that time, Seven “prioritised our digital strategy and reinvigorated our 7plus BVOD platform”.

Warburton declared that SWM’s content schedule on Seven and 7plus was set to be “the most disruptive schedule ever delivered”.

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