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TV networks hit by $300m revenue drop

Free TV logoThe scale of the challenge facing Australia’s TV networks has become clear, with new figures revealing that around $300m left the market in the last year, a decline of nearly 8%.

Ad revenue was down from $3.8bn for the financial year 2007-08 to $3.5bn in the financial year just ended, a fall of 7.8%, the figures compiled by Free TV Australia revealed.  

And in the shorter term, ad revenue for Australia’s three main commercial TV broadcasters dropped by well over 20% in the first six months of this year compared to the previous six months. In the first half of this calender year, ad revenue to the three broadcasters was just under $1.5bn. In the last six months of 2008, Nine, Seven and Ten had enjoyed revenues of just under $2bn.

The Sydney market has seen the most dramatic drop in the last six months – down from $566m in the last half of 2008 to $427m in the first half of this year – a decline of almost 25%. In Melbourne the decline was nearly as bad – down more than 23% in the same period from $419m to $322m.

However, a factor that makes the figure seem particularly dire is that the first half of each calender year tends to bring in less revenue than the second. But even comparing the first half of 2009 to the first half of 2008, there have been dramatic falls. Overall ad revenue is down nearly 12%, while Sydney is down almost 15% and Melbourne nearly 13%.

Six months ago the period-on-period drop had been 4.4%, suggesting that the worse may not yet be over for the TV networks.

In terms of share, despite a strong ratings performance, Seven had the toughest six months, with its revenue share dropping from 41.3% for the six months to the end of 2008 to 38.5% for the first half of the year. In the same period, Nine’s share jumped from 30.8% to 33.2% – however Nine CEO David Gyngell had publically set a target of 35%. Ten’s share also rose – from 27.7% to 28.3%.

The disparity between ratings performance and share is partly explained because the share tends to lag a few months behind ratings, and Nine had something of a ratings resurgence during 2008.

Revenues for Jan-June 2009:

METRO

  • Sydney 426,899,905 -14.797%
  • Melbourne 321,514,203 -12.602%
  • Brisbane 207,022,937 -8.879%
  • Adelaide 92,412,903 -11.377%
  • Perth 123,338,504 -12.051%

TOTAL METRO $1,171,188,452 -12.638%

REGIONAL

  • New South Wales 161,137,195 -9.182%
  • Victoria 54,568,830 -11.715%
  • Queensland 94,064,561 -7.630%
  • South Australia 13,278,199 -10.117%
  • West Australia 19,579,931 -8.437%
  • Northern Territory/ Tasmania 32,858,078 -5.842%

TOTAL REGIONAL $375,486,794 -8.890%

TOTAL STATE

  • New South Wales 588,037,100 -13.328%
  • Victoria 376,083,033 -12.474%
  • Queensland 301,087,498 -8.492%
  • South Australia 105,691,102 -11.221%
  • West Australia 142,918,435 -11.573%
  • Northern Territory/ Tasmania 32,858,078 -5.842%

OVERALL TOTAL $1,546,675,246 -11.757%

(The % change is compared to the six months ended 30 June 2008)

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