TEN the biggest loser in earnings

Despite a positive start to the year with So You Think You Can Dance and The Biggest Loser, Network TEN has today reported a 25% slump in earnings for 2007/08 financial year. But TEN lost steam with Big Brother.

The network signalled today it will still hold on Idol next year, ahead of its 2009 launch.

TEN said earnings at its television business fell 11.8% to $209 million, falling short of its own forecast in June, when it warned TV profits would be down about 10% because of the economic slowdown and Seven’s Olympics.

The broadcaster wouldn’t make a forecast for the current financial year, other than to say it was “prudently positioned” to weather the difficult economy and benefit when the market rebounds.

Executive chairman, Nick Falloon, said the network was confident it would “withstand the current contraction in the advertising market and position the company to take full advantage of eventual improvements in the external environment.”

He said the TV division achieved controlled cost growth (ex selling) of four per cent, which was well within previous guidance of five per cent growth for the year.

“This was achieved despite continued investment in key program franchises, including So You Think You Can Dance Australia, the rugby World Cup and new content from our US supply deals, as well as the launch of and on-going investment in TEN HD,” he said.

Its normalised profit dropped 24.7% to $89.6 million in the year to August. Adding a one-off tax gain of $183.9 million, its net income climbed from $66.1 million to $273.5 million.

Source: smh.com.au, news.com.au

17 Comments:

  1. George, for someone that seems to have intimate knowledge of the business, you are wrong.
    All Media share prices have plummeted – not TEN in isolation. When McAlpine left shares were around $3.30, which is around a 50% drop…in line with Seven and PBL. Together with Seven and Foxtel, TEN makes $$ off AFL. V8’s were actually bought over the odds by Seven and unless you have insider knowledge, there is no way that 7 will write $36.6m a year into this sport as per your prediction. Staff turnover happens in all businesses. Some people need to go to benefit the company. As per my original post, investment in infrastructure is a must and this is what TEN is obviously doing. They are turning over a profit…tell me one business that has closed while they are doing that?

  2. Slydog, If ten were a Macca’s franchise it would have closed a while back.Have a look at the current CEO’s report card since he took over.Share price has gone from $4.40 down to $1.15,payed over the odds for the AFL,gifted the V8’s to seven(they are on track to write over 220mill for a 70mill investment) and lost his National,Sydney and Brisbane sales directors along with plenty of sales staff working for other media companies.It’s not all about programming you have to sort out how much you pay for the meat and buns and who is at the counter selling them.

  3. Sephiroth_FF…what a great intelligent comment that is – shut down TEN completely. In case you missed it, TEN posted $89.6 Mil profit. Why, pray tell, would you interpret that as a hole? TV is an expensive business and you seem to think that any nuffy can waltz in and run a Network? Maybe you’re the person for the job…you seem to know all the inner workings of this McDonalds franchise..

  4. Well I’m not a fan of Australian drama but Rush doesn’t look anywhere near as bad as The Strip. I mean what were they thinking with that? The whole point in making Australian drama is to make it AUSTRALIAN. It basically looks like a poor-man’s CSI:Miami with Aussie accents.

  5. I think it’s fair to say that drama is actually Ten’s strength right now. And they certainly haven’t blown a heap of money with the shotgun approach that Nine has taken to new programming. I sympathize with Ten – chasing the important younger audience (a lot of which is turning away from TV) is a tough challenge. And a show like Rush, for example, certainly deserves an equal or greater audience than something like The Strip in my opinion.

  6. You know what should be done with 10? It should be shut down completely. There’s no way they can dig themselves out of this hole. Just be done with them and bring some new free-to-air SD channels in but this time, actually run it like it’s a network and not a McDonald’s branch.

  7. I’d have to disagree about the “cheap Aussie comedy” thing. Barring Thank God You’re Here and the recent Good News Week, pretty much every comedy show Ten has done has stunk. Some decent, ambitious and most importanly FRESH drama wouldn’t go astray though.

  8. Right on Leigh-Roy. TEN’s problem lies in the earlier prime time slots which really don’t give their post 7:30 shows any support. Their biggest issue, which has been their biggest issue for the longest time, is the 7:00pm timeslot.

    They need to address this in a BIG way, otherwise H&A and 2/12 will continue to dominate. Something factual would probably provide the best alternative to an Aussie soap and an American sitcom. TEN needs to start playing the Total People game STAT, otherwise that share of revenue is just going to continue falling….

    There does seem to be a very big anti-TEN sentiment in the current market. Has anyone else noticed that they hardly ever get a mention when they’re doing well, but as soon as the proverbial hits the fan, they’re suddenly the whipping boy?

    Hmmm….

  9. As a supporter of ten, i believe it’s time to step up, and take on the big guns in prime time. This means, changing there evening lineup to include the news for an hour from 6 – 7pm. Surely they could manage 1m for that period of time, then have neighbours either at 7pm or 5.30 as a lead in.

    Getting 1m early on in the night, will help push up the numbers for later shows in the evening. 7.30pm with Idol, and 8.30 with shows like HOUSE….which has backfired of late.

    Today Tonight, ACA, H&E and even 2.5 men are dominating the early prime time slots, which affects tens evening programing. Basically what i’m saying is “you don’t start building a house with the roof” Need to fix 6 – 7.30pm to have a chance of getting a goood share, which means more $$$$$$$$ Simple….er, right?

  10. Doug from Perth: Seven and Nine are probably more guilty than Ten at the constant changing of schedules, particularly Nine in some cases announcing a change and then hours later announcing that change has now changed!

  11. Dump Idol, replace it with cheap Australian comedy aimed at everyone… That’s what’s lacking on Ten (and on Australian TV in general). Reruns of The Comedy Company, Richmond Hill and E Street would get better ratings in primetime than reality TV. Ten has to shake off the “reality capital” image… fast.

  12. Yes, Ten will only be weeks away from annoucing that IDOL will be back next year but it will be totally different and fresh..blah..blah..blah..this will be like the 4th re-tooling in the shows history…the last one apparently involved the Monday night results show being more watchable, but in relaity its more painful (and low rating!) than ever…in any other year, Idol might have got the flick after this year but its a sad indictment of the networks situation when a show thats ratings (Sun and Monday night combined) will probably struggle to average 1million viewers thats its considered successful!

  13. Have to disagree Doug. Monitoring ratings figures is listening to the audience. That’s how Big Brother lasted so long. People say they never watched it, but when you ask them if they saw one of the nuffy housemates’ stupid antics, they’d say yes.
    If programmers left every single poorly performing show “to build audience”, the profit margin reported today would be even smaller.
    The report put out today has to do with more than purely ratings. If you drill down into the report, I’m sure you’ll find that TEN has invested more money into setting up infrastructure for HD and an additional SD channel for 2009 than the other Networks (particularly debt riddled CH Nine). Any company that invests tens of millions of dollars into these areas, as well as acquiring rights to programs that they haven’t done so in the past, is bound to post a drop in profitability in the short-term. $89.6Mil is still a profit not to be sneezed at.
    The real comparison versus Nine and Seven will come next year when all Networks have been forced to invest heavily into areas stated above.

  14. Doug from Perth

    Maybe when TEN starts listening to its audience instead of simply monitoring ratings figures they’ll regain viewer’s trust.

    When Seven and Nine broadcast a show that doesn’t rate as hoped they usually move it to a later slot but at least leave it there to run out a regular course and possibly build an audience (ala Family Guy).

    TEN continually reshuffles or drops shows in the days leading to broadcast making it impossible for viewers to know when things are or are not being shown (without websites such as TV Tonight).

    The loss of viewer confidence in the schedules has driven them away, plus the lack of appropriate or any promotion for shows like Torchwood have lost any audience they may have had.

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