Ten’s profits-slide signals the coming squeeze

network-tenThe difficulties faced by the TV networks have been underlined by this morning’s AGM results for Network Ten, which has seen its revenue drop by 10%, its profits slip by 25% and a tough outlook for the coming year. In early trading, its shares were down about 5% as a result.

Of the commercial free-to-air broadcasters Ten arguably finds itself in the most challenging position.Its peak time audience share has usually lagged behind its rivals – this year it took about 20%, compared to Nine’s 25.6%, and Seven’s Olympic-driven 27.7% – but it has previously made up for it by delivering to advertisers in the younger, more desirable demographics.

But this year saw further declines in its night-time audience share including in its key 18-49 demographic. This was in part because of the failure of the now-axed Big Brother and new signing 90210 to deliver.

The new free-to-air digital channels offer a further threat. Ten has already said it will launch One, its digital sports channel early next year. And while this will allow it to make more use of rights it has already paid for, its free-to-air rivals will also be launching new offerings.

And this is where the biggest threat comes from. Up to now, Nine and Seven have not been able to chase the younger demographic too hard for fear of alienating their family and older audiences. But when they also have digital channels, they can use those to go straight after Ten’s heartland.

Today’s AGM heard that there have been staff reductions on “an ongoing basis”.


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