Post by Skip on Feb 27, 2005 19:42:46 GMT 10
Seven takes early lead in TV battle
Date : 27/02/2005
Reporter:
ALAN KOHLER: Well it's just two rounds into television's 40-week slugfest known as the ratings period and already the champs at Nine are looking a bit groggy. Investors seem to be impressed with Seven bouncing off the canvas, making it the current glamour stock in the sector. But can Seven keep it up against the young and lean Ten and the hulking heavyweights at Nine? Andrew Geoghegan reports.
ANDREW GEOGHEGAN: As with any team that's been in the ascendancy for so long, there's no room for complacency.
STEVE ALLEN: For any network to be number one year after year after year you have to be a bit paranoid. You can't let any one of your competitors take any advantage of anything that you're not doing well enough.
ANDREW GEOGHEGAN: Having lost the opening rounds of the 2005 ratings season, paranoia is said to be rampant at the Nine network.
Seven, a consistent runner-up, used record ratings for its Australian Open coverage to leverage its new line up of shows ahead of the start of the TV season proper.
ROGER COLMAN: We're talking about a relatively seismic shift in terms of what Seven is doing at the moment.
ANDREW GEOGHEGAN: This time last year the network failed to make it into the top 10. This year the top three shows belong to Seven: Desperate Housewives, Lost and Dancing with the Stars.
While the season has only just begun, media analysts recognise that Seven's programming schedule has strength and depth and is well placed to capitalise on another year of strong ad revenue growth.
ROGER COLMAN: And their back end for the rest of the calendar year looks pretty good. We're talking, Channel Nine earning around $300 million and Channel Ten, depending on how the ratings go for this fiscal year ending August, between 300 and 350 million, and Channel Seven reporting a TV group earnings of around $145 million. So what Seven grabs off those two other networks, probably 50 million to $100 million earnings lumps, is what the story is about.
ANDREW GEOGHEGAN: Last November Seven Executive Chairman, Kerry Stokes, warned, accurately, that earnings would be down 20 per cent as advertising
dollars followed viewers to shows such as CSI on Nine and Australian Idol on Ten, and advertising revenue figures reveal just how much ground Seven has to make up. While revenue for capital city stations grew 10.5 percent in the second half of 2004, Seven retained the smallest share, despite recovering from a poor first half. This is particularly disappointing, given the ratings bounce it received from the Athens Olympics.
STEVE ALLEN: Seven is definitely a loser, more so than we expected and more so than, I think, the market expected, given they've got Olympics in the half and there is normally an incremental 50 or $60 million, or greater, in the Olympics. It's disappointing that 10 pipped them and 10 was the only winner really.
ANDREW GEOGHEGAN: Of course the other loser was Nine. Its share of advertising revenue fell significantly in the December half.
Hurting it most has been its deteriorating performance in the key news and current affairs timeslot between 6 and 7 o'clock weeknights.
STEVE ALLEN: They are very determined not to lose the crown of being the number one news, current affair network, and it is one of pillars that they have historically built their network proposition on.
ANDREW GEOGHEGAN: Looking to stem the loss of viewers in the biggest market of Sydney, Nine executives opted for generational change, installing a younger newsreader in an effort to attract the dominant 6 o'clock demographic, grocery-buying women, a tactic that's showing little sign of paying off.
But media analyst, Roger Colman, expects Nine will respond to the Seven challenge as it's done before, by spending its way out of trouble.
ROGER COLMAN: And of course Channel Nine, as they did in 2001 and what they did in 1992, really go berserk in terms of promotion, new programs, recasting schedules, until they get back to a clear number one position; that's always their aim. So we'll see a fair bit of expenditure by Channel Nine and Ten in the half years, finishing in June for Channel Nine and August for Channel Ten.
ANDREW GEOGHEGAN: But increased expenditure is already hurting Nine's bottom line. Costs were up 7.5 percent in the December half as the network attempts to fend off the competition. Likewise at Seven, costs are expected to rise between 5 and 7 percent this financial year as the network continues to develop and market its primetime shows.
ROGER COLMAN: The best value is the Seven Network and the simple reason is that their magazine arm is performing gradually, their TV arm is likely to get a revenue boost from the June quarter onwards, as I mentioned, the debt is pretty
well under control, they've got some pretty good assets, and Kerry Stokes, historically, has been the second best media trader after Kerry Packer.
STEVE ALLEN: What the market really expects of Seven, more than anything else, is deliver us audience growth and you'll start to get growth in revenue. As to the cost side, we're not that concerned about it.
ANDREW GEOGHEGAN: Steve Allen, Head of Media Planner Fusion Strategy, believes success at Seven will enable CEO, David Leckie, to manage the network in much the same vein as he ran Nine before he was sacked.
STEVE ALLEN: Now he's in the seat and he's starting to produce some ratings, he'll probably go through, I imagine, another series of slimming it down and focusing the costs on areas that are producing results.
ANDREW GEOGHEGAN: Containing costs has made Ten the most profitable network. Its schedule is made up of just 14 or 15 shows targeting the 16-39 demographic, although it's facing problems with the local version of Queer Eye for the Straight Guy, axed after just three outings, while the X Factor is underperforming.
STEVE ALLEN: Our prediction, our forecast for this year, is that Nine will stay number one, but with a significantly reduced margin.
ROGER COLMAN: Whilst Kerry Packer is alive, Channel Nine will recover.
ANDREW GEOGHEGAN: However, with former Nine executives padding up at the rival networks, there'll be plenty of incentive to knock over the TV champions.
Date : 27/02/2005
Reporter:
ALAN KOHLER: Well it's just two rounds into television's 40-week slugfest known as the ratings period and already the champs at Nine are looking a bit groggy. Investors seem to be impressed with Seven bouncing off the canvas, making it the current glamour stock in the sector. But can Seven keep it up against the young and lean Ten and the hulking heavyweights at Nine? Andrew Geoghegan reports.
ANDREW GEOGHEGAN: As with any team that's been in the ascendancy for so long, there's no room for complacency.
STEVE ALLEN: For any network to be number one year after year after year you have to be a bit paranoid. You can't let any one of your competitors take any advantage of anything that you're not doing well enough.
ANDREW GEOGHEGAN: Having lost the opening rounds of the 2005 ratings season, paranoia is said to be rampant at the Nine network.
Seven, a consistent runner-up, used record ratings for its Australian Open coverage to leverage its new line up of shows ahead of the start of the TV season proper.
ROGER COLMAN: We're talking about a relatively seismic shift in terms of what Seven is doing at the moment.
ANDREW GEOGHEGAN: This time last year the network failed to make it into the top 10. This year the top three shows belong to Seven: Desperate Housewives, Lost and Dancing with the Stars.
While the season has only just begun, media analysts recognise that Seven's programming schedule has strength and depth and is well placed to capitalise on another year of strong ad revenue growth.
ROGER COLMAN: And their back end for the rest of the calendar year looks pretty good. We're talking, Channel Nine earning around $300 million and Channel Ten, depending on how the ratings go for this fiscal year ending August, between 300 and 350 million, and Channel Seven reporting a TV group earnings of around $145 million. So what Seven grabs off those two other networks, probably 50 million to $100 million earnings lumps, is what the story is about.
ANDREW GEOGHEGAN: Last November Seven Executive Chairman, Kerry Stokes, warned, accurately, that earnings would be down 20 per cent as advertising
dollars followed viewers to shows such as CSI on Nine and Australian Idol on Ten, and advertising revenue figures reveal just how much ground Seven has to make up. While revenue for capital city stations grew 10.5 percent in the second half of 2004, Seven retained the smallest share, despite recovering from a poor first half. This is particularly disappointing, given the ratings bounce it received from the Athens Olympics.
STEVE ALLEN: Seven is definitely a loser, more so than we expected and more so than, I think, the market expected, given they've got Olympics in the half and there is normally an incremental 50 or $60 million, or greater, in the Olympics. It's disappointing that 10 pipped them and 10 was the only winner really.
ANDREW GEOGHEGAN: Of course the other loser was Nine. Its share of advertising revenue fell significantly in the December half.
Hurting it most has been its deteriorating performance in the key news and current affairs timeslot between 6 and 7 o'clock weeknights.
STEVE ALLEN: They are very determined not to lose the crown of being the number one news, current affair network, and it is one of pillars that they have historically built their network proposition on.
ANDREW GEOGHEGAN: Looking to stem the loss of viewers in the biggest market of Sydney, Nine executives opted for generational change, installing a younger newsreader in an effort to attract the dominant 6 o'clock demographic, grocery-buying women, a tactic that's showing little sign of paying off.
But media analyst, Roger Colman, expects Nine will respond to the Seven challenge as it's done before, by spending its way out of trouble.
ROGER COLMAN: And of course Channel Nine, as they did in 2001 and what they did in 1992, really go berserk in terms of promotion, new programs, recasting schedules, until they get back to a clear number one position; that's always their aim. So we'll see a fair bit of expenditure by Channel Nine and Ten in the half years, finishing in June for Channel Nine and August for Channel Ten.
ANDREW GEOGHEGAN: But increased expenditure is already hurting Nine's bottom line. Costs were up 7.5 percent in the December half as the network attempts to fend off the competition. Likewise at Seven, costs are expected to rise between 5 and 7 percent this financial year as the network continues to develop and market its primetime shows.
ROGER COLMAN: The best value is the Seven Network and the simple reason is that their magazine arm is performing gradually, their TV arm is likely to get a revenue boost from the June quarter onwards, as I mentioned, the debt is pretty
well under control, they've got some pretty good assets, and Kerry Stokes, historically, has been the second best media trader after Kerry Packer.
STEVE ALLEN: What the market really expects of Seven, more than anything else, is deliver us audience growth and you'll start to get growth in revenue. As to the cost side, we're not that concerned about it.
ANDREW GEOGHEGAN: Steve Allen, Head of Media Planner Fusion Strategy, believes success at Seven will enable CEO, David Leckie, to manage the network in much the same vein as he ran Nine before he was sacked.
STEVE ALLEN: Now he's in the seat and he's starting to produce some ratings, he'll probably go through, I imagine, another series of slimming it down and focusing the costs on areas that are producing results.
ANDREW GEOGHEGAN: Containing costs has made Ten the most profitable network. Its schedule is made up of just 14 or 15 shows targeting the 16-39 demographic, although it's facing problems with the local version of Queer Eye for the Straight Guy, axed after just three outings, while the X Factor is underperforming.
STEVE ALLEN: Our prediction, our forecast for this year, is that Nine will stay number one, but with a significantly reduced margin.
ROGER COLMAN: Whilst Kerry Packer is alive, Channel Nine will recover.
ANDREW GEOGHEGAN: However, with former Nine executives padding up at the rival networks, there'll be plenty of incentive to knock over the TV champions.
