TEN boss: ‘We had the wrong shows, wrong strategy’
Hamish McLennan says TEN had the wrong shows and some programming will time to work out of the system.
- Published by David Knox
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TEN CEO Hamish McLennan says shifting the network’s focus from 18-49 to 25-54 will take time and he has inherited some programming “which will take time to work out of the system.”
He also laments that the network that first had Big Brother and X Factor let them go to other networks, which are now punishing them in the ratings but signals that more Sport, Reality Television and News, under Peter Meakin, are coming.
However TEN’s AGM is also coming next month.
McLennan, who began at TEN in March,  has given an interview to Business Spectator‘s Alan Kohler, Robert Gottliebsen and Stephen Bartholomeusz touching upon programming, revenue and strategy:
AK: Explain to us what was wrong with the strategy – you said the strategy previously was wrong. What was wrong with it? Explain that.
HM: Look, we historically have gone for a 16 to 39-year-old demographic. It was adjusted to 18 to 49-year-olds. But the simple fact was that the orientation of the business was focussed around the youth market and statistically if you just look at the numbers, the biggest body of viewers – and the most profitable body of viewers – are 25 to 54-year-olds. But we were chasing a market that was just declining in overall numbers and we were producing shows like Being Lara Bingle, I Will Survive and The Shire that were alienating our older consumers, and those kids don’t watch free-to-air television the way perhaps we did when we were young. There’s not a lot of money to actually capture them anymore – they’re ripping stuff off the net and watching YouTube. They just don’t consume free-to-air television the way they used to. We were just chasing the wrong demographic.
Interestingly, when you look at some of the shows that had worked very well for us in the past – like Masterchef – the viewers were falling well into the 25 to 54-year-old demographic and picking up a wider pool of people. We were chasing the wrong demographic and we had the wrong shows – hence the wrong strategy. Now putting the focus back on programming like live sport, I can’t underestimate the value of things like the cricket, which we’ve secured at the right sort of price as we did with the Winter Olympics. It’s live programming that doesn’t get PVR’d (recorded on personal video recorders).
At its core Ten still has very good roots. Its DNA is very, very strong. I’m impressed by the quality of people, we’ve just got to reorientate the ship around a more profitable market and that market is 25 to 54-year-olds. And let’s not forget too that we also launched our digital channel, Channel 11, which was also cannibalising the mother ship, which was Ten. So we had strategically two channels that were fighting against each other with even more fierce competition and it wasn’t working for us.
Stephen Bartholomeusz: Hamish, you’ve made quite a big investment. You referred to the Big Bash, so there’s a big investment in sport – Big Bash, Commonwealth Games, Winter Olympics and The Breakfast Show. How big a gamble is that? I mean, if it doesn’t pan out in the next 12 months, where does it leave you?
HM: You have to back up your strategy with programming. I would just highlight that when you look at programs like the Commonwealth Games, that was a deal that was done four years ago and comes at a very, very high cost – much higher than what the Winter Olympics will cost us. The simple answer is that you can’t sit on your hands and do nothing. We’ve inherited some programming which will take time to work out of the system and I think that anyone who has a very clear view of our internal financials understands there are some contracts that we just need to work out.
We’ve got some formats that have been around for many years. A lot of them are good franchises, but we just need to start making better choices around what works. I think what pains me is … this is the network that invented Big Brother, had X Factor in its first year and launched Australian Idol and I think we let those franchises go and we were too quick to dismiss them and then move on to other things. So it’s going to be a return to shows or brands that will work for us. Reality-style programing does work very well on this network, we just need more time to do more of it and get focussed on what works.
We did an analysis last week where if you look at the top 60 programs in the country, 75 per cent of them have been around for more than a few years. My point being, that once you get a franchise you’ve got to work damned hard to make sure that it works and you’ve got to be focussed on making it fresh and new. I think that we’ve been too quick to walk away from what’s working. Some of those franchises, like reality television, you can embed advertising more easily and there are great client opportunities to do integration, and those things will all drive a more profitable outcome for the network. And again, if you look at what we’ve done with Studio 10 and Wake Up, they’re formats that we own.
So it’s very early days. It took a couple of years for Sunrise and Today to really drive great growth, so you’ve got to get new audiences acquainted with your network. We own the IP on those shows. They’re a great opportunity for us to then cross-promote throughout the day through to the evening schedule, and that will work for us. And I think when I anecdotally look at those shows, whilst it’s very early days, they’re quality programs that I’m proud of and it’ll just take time to build.
You can read the full article here.
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58 Responses
Hamish McLennan is basically trying to do a better job of Grant Blakely and Nick Falloon tried to do in 2009/10. Maybe we can get better content as far as sport goes on ONE. Yeah they do need to utilise there CBS back catelogue deal more not just repeat same old shows over and over again. I dont mind the simpsons re-runs on 11 it is a youth orientated channel after all. I dont want Labby and Stav on tv and 11 should have kids content in the afternoons. If TEN give people the kind of content they are searching for TEN will be back on top on no time. Sport is a good idea. What Hamish has said just goes to show that Lachlan does not know and had never known how to run a TV network his dad he is not.
TEN went downhill when CEO Lachlan Murdoch axed the AFL
AFL was so good on TEN Saturday day & night and ratings proved that people were watching.
The state the network finds itself in now is directly linked to the very poor decisions made by Lachlan Murdoch.
I loved watching ‘I will survive’, it was a true original, it was just on the wrong network at the wrong time. Ten need a good music show, promptly.
I have been following TEN for the past 5 years.
For some reason I have an obsession with seeing TEN win something. Why? Because they never ever do win anything. Its a miracle when it happens.
It seems like nothing that they are doing is right.
Therefore, their last chance of success is this summer with the olympics and the cricket. If this doesnt work, then im afraid its over for them.
I hope not…
One more thing, they need to get rid of The Simpsons quickly. They should have thought more about that then the morning timeslots.
@pertinax – you have a very interesting point. But why would you want to pursue the 16-34s when they do not have enough spending power like the older demos? Sure you can get your products across to their heads but how many would actually spend money on the products? This is, of course, a general statement but with younger people finding it hard to even own a home, that tells me they do not have the big disposable income like the oldies. Thus, Channel 10 is adopting a different strategy. Anyway, only a general observation hope you don’t mind.
@Siri 10-17am today
Thank you for reading my original comments and replying to them, and perhaps I should have begun my first reply/comment to you with ” As one DOT(dumb old timer) to another but smarter old timer( no malice intended), as I am having trouble understanding the gist of your 10-17am post, especially when I wonder how far back and which era did you search? and which balance sheet revenue and EBTIDA???? are you referring, and did you detect any trend movements pre and post Lachlan Murdoch’s era.
I am also confused with and if you support the vested interests, especially after the Paul Henry tenure ended after so much damage and much to late (sorry I did not know how to spell terror), and lets not forget News Corps involvement with Meet The Press, and the lording of Rupert Murdoch by Joe Hilderbrand on studio 10, possibly enough is enough.
Who spends the most money is only on factor. It’s who advertisers want to target that determines how much they will pay.
16-34s command a premium because they buy new consumer goods, follow trends, are influenced by advertising and were hard to reach through other media so advertisers would pay more to reach them on TV. Ten used to make a large profit and get higher revenue per viewer targeting them while Seven and Nine chased a larger, broader audience.
They are however a small audience, watching TV in different ways and being targeted by Ten, Eleven, Go!, SBS2 now. So targeting only them is not a viable strategy any more.
While we are all smarter Programmers in hindsight, there are definitely some wise comments here (including some from shareholders). The most encouraging news for TEN amongst these is that clearly: People. Still. Care.
I’ll keep my comments as brief as possible..
1. TEN might have been rating third and delivering strong financial results a couple of years ago, but that was when it had a major sport in AFL. The state the network finds itself in now is directly linked to the very poor decisions made by Lachlan Murdoch when CEO.
2. Remember the many comments from people wanting The Simpsons back from ELEVEN on TEN at 6pm because it used to rate in that slot years ago? Well.. it’s back and it’s not. Neighbours is on ELEVEN and that’s exactly where it should stay. It won’t rate any better on TEN. Those that think it will are being foolish.
3. You can’t say programmes like Wake Up and Studio 10 are failures when they’ve only been on air a week. Judge them in 6-12 months time. And I wouldn’t consider The Bachelor a failure. Sure, it’s not rating over the magic million but it definitely has a…
Yes I read an article somewhere that Channel 7 is chasing the 40-64 group and it shows on their balance sheet in respect of advertising revenue. Not to take away the ratings success of Channel 9 lately,I don’t think that by topping the key demographics means they are the most profitable. And as for Channel 10, good luck to them – it is going to be a very tough journey for them in the next couple of years.
My major gripe with CH10 is what they did to NCIS. I’m still disgusted & shocked that they took it off.Then the debarcle of repeats & returning it but
no one knew what was going on!
You lost 500,000 viewers you can’t get back! And you had better leave it where it belongs! Don’t give us the rubbish “Oh, it doesn’t rate!” That’s your fault!
It’s just a pity you don’t value a show that rates solidly! And you still couldn’t fast track that!
*rant over*
Based on this piece of interview, does that confirm the notion that the younger demographics are not as profitable as it used to be? Should TV stations be targetting the older demographics (which Channel 7 has been predominantly doing well but copped a lot of criticism of being the OLD TV station?). From a consumerism/business point of view, I still think the older demographics have more disposable income but for some reason, a lot of people are writing the oldies off.
Seven said at its Upfronts that 40-64 spent the most $$.
Given Ten is teetering with its bank and its four major shareholders have proved incapable of improving its performance it may well go into receivership within the next year. The terms of the latest Commonwealth bank $200 million loan, yet to be approved by shareholders are onerous. It won’t deliver anything like the cash that Ten requires for new programming as you have to factor in much of this programming not doing well. If a dignified departure for Murdoch, Packer, Gordon and Rinehart could be engineered then with new owners and new management Ten may have a chance to rebuild. But unless the financiers intervene then the egos of this quartet will ensure death by a thousand cuts.
Rinehart did not choose to back this time, but will vote in favour.
There isn’t much Ten can do. The reality is that in the age of digital there are only a handful of shows that people watch live with ads. Even Nine’s lineup is pretty thin after News, Sport, The Voice and TBBT.
In the analogue days Ten got 20% on the back of US shows and rights to formats from overseas and the ABC 17%. Now ABC1 spends a lot more and gets 13% while Ten gets 12%. Network Ten can pick up 3% for repeats and dumped shows on Eleven and One but that isn’t much revenue.
Murdoch’s hiring of Warburton to run a low cost station targeted at 16-34s with both Ten and Eleven was a debarcle. But Blackwell and McLennan’s strategies of going after 25-54s have fared no better.
Ten can only show what they can buy with an ever dwindling budget.
Showing Wonderland in favour of the 2nd series of Puberty Blues wasn’t a good idea.
Advoc 8 – After reading your comments I searched back to see how the Network was performing pre-Lachlan era.
The Annual report states revenue of over $900m and EBITDA of $208m !!!!
“Wrong Strategy …hmmm – Right Numbers”
I am sure shareholders would prefer that to the serial writedowns, embarrassing programming decisions, lost revenue and brand damage.
Nobody remembers Ten had The X Factor in 2005 because nobody watched it. It bombed.
The idea that Ten could have kept going with a failure for 5 years until singing contests became popular is just crazy.
Ten concentrated on BB and Master Chef which were big its for it.
When singing contents were in Ten tried to buy The Voice but Nine being the bigger network was able to outbid them.
I gave up reading after the 300th mention of how The Big Bash cricket was going to save the day….the place is a mess, the positive story of the return of Dance and Paula as judge was negated by the choice of host, Carrie is way over exposed on the network, and as we’ve seen the other “stars” on the network aren’t exactly setting the ratings on fire, ie: This week live and A League of their own or whatever that Monday sports show is called
Hamish – maybe you should focus on the future and stop blaming the past.
You have had little time in the TV Industry and you’re first foray has not been great – Wake Up, Studio 10 and buying the Winter Olympics and Big Bash. The later two will fail – will you stand up then to be judged or adopt another blame game ?
I’m at the ‘aged’ end of your target audience Hamish and our household craves for something juicy at 8.30 on Sunday nights as it was back in the day. Why not reserve it for Event Aussie drama. There are lots of swinging voters watching reality at that time that you could win over.
Incredible. So the problem is, he inherited the wrong shows, how then does he explain the long list of flops since he has been CEO, Wanted, Revealed, The Truth Is, League of their Own, Have you Been Paying Attention, This Week Live and The Bachelor! (I’m sure I’ve missed a few too)
Not one hit!
Not one!
Plus add the performance so far for Wake Up and Studio 10!
What a Disaster!
To blame the wrong strategy is essentially to point the finger at Lachlan Murdoch. As CEO, he oversaw the commissioning of Lara Bingle, The Shire, I will Survive and Everybody Dance Now, which he even got his wife to host… and then to top it all, he blamed programmer David Mott.
Most the comments on here are a bit sheep like…now to put the boot in…
1. Who says Hamish is gonna keep/stay in his job, the recent record would challenge this.
2. If ch10 just closed down for 12 months and buggered off…..at the end of that time would anyone really be that bothered?
3. All the folk referring back to past glories of 5-15 years ago are just blindly ignoring the significant structral change within the industry…peruse this page, there are 6 advertising spots, they did not exist 7 years ago
@Siri
As one OT to another, the only sorrow I have with what is and will continue to happen at Network Ten, is for those who helped Ten build the reputation they had deservedly earned,only to be repaid by redundancies for some, and for the many who were so poorly treated and who had to open the ” Door Of Blame” themselves, and take the blame for so many ill-fated and vested interests management decisions.Ironically they chased the loyalty of the demo’s, with the ” Must Have It Now” patience and perceptions that rarely lasts as long as there attention span, and sadly Network Ten simply got out of step at the wrong time during rapid expansion of the Digital Revolution.
Unfortunately these vested interests are still at the helm, and still have their own agenda’s who still dish up the likes of The Bolt Report, Meet The Press and Hilderbrand and lets never forget its the same…
I absolutely agree with the first poster, TEN should get a look in on the UK game show “The Chase” I stumbled across it on you tube and have become hooked…brilliant format, but it is imperative they get the casting correct.
Shaun Micallef might have wanted to move on but Ten weren’t exactly trying to keep him onside by moving his show all around the schedule and occasionally randomly showing repeats.
@ryan – it’s been said a hundred times here, the networks must broadcast their main channel in SD. If they were to simulcast it in HD they would need to drop one of their other channels. And 11 is SD not HD. One is Ten’s HD channel so they are already showing movies, docos, and sport in HD (altho’ a lot of it is upscaled so it’s almost a moot point anyway).
I read about how Eleven cannibalised Ten. I think it was recently pointed out on this site. But I’ll just admit I mainly stopped watching Ten in 2009.
I think they stopped playing Supernatural around then. It was constantly late. The numbers dropped. It went away. They moved House from Wednesday to Sunday. I stopped watching. They moved Medium from Thursday to Friday. I stopped watching. Smallville ended up on Friday. I watched it. They moved it to Saturday. I stopped watching. I can’t tell you what to do. I just hope they don’t do that again if they can help it.