Tough ad market hits Seven West Media profit

Seven West Media today released interim financial results for half year ended 29 December 2018.

Despite a tough ad market revenue and ratings were up but profit at $86m was down 14% for the same period a year earlier. EBITDA of $161.5 million and EBIT of $146.8 million were down 8.8% and 7.9% respectively. SWM includes its print arm including The West Australian and Pacific Magazines.

Chief Executive Officer of Seven West Media, Tim Worner, said: “We promised to improve our ratings and revenue share this half as we focused on the core and we have delivered, despite a softer second quarter advertising market.

“We continue to transform our operating model at pace, driving greater cost efficiencies and increasing our group cost out targets. We absorbed the new cricket costs, maintaining a flat cost base in the half.

“At the same time growth in new revenue streams is outstripping our expectations with 7plus, 7Studios and our investment portfolio all delivering strong growth.

“2018 was a truly outstanding year for our TV business. Seven was Australia’s most-watched Network, and Channel 7 was Australia’s most-watched channel, both for the 12th year in succession. Even more remarkably, Network Seven achieved the highest commercial viewing share in ratings history, and led all the key demographics with our own highest ever shares of each.

“We also performed strongly in the battle for revenue, ending 2018 with the highest share of metro TV advertising, 39.2%. We expect to be number one in both ratings and revenue in the current Jan-Jun half.

“Our acquisition of the Cricket rights, at a lower cost per hour than the Tennis, has paid off with ratings exceeding our projections. Across summer, Seven grew its share of every key demographic throughout the day and in primetime and we scored a 40%+ share of viewing on 39 days – more than any network has ever achieved. We are now broadcasting premium sport every week of the year, and will be for years to come.

“Just over a year after launch, 7plus is surpassing our expectations and had the number one share of commercial FTA BVOD viewing in the final quarter of 2018.

“Seven Studios continues its strong upward trajectory, with EBIT on target for a seventh consecutive year of growth. Our shows are now engaging audiences around the world, with a slew of shows debuting on Netflix in the half to global acclaim.”

9 Comments:

  1. I remember when there were only 3 adds per break.
    Each add is now, one needle in the add haystack.
    Companies would be mad to pay high fees, for such a low profile.
    After an add break, very few people could list all the adds, that were on a minute ago.

  2. The high amounts paid for sports rights to AFL, Cricket and others are the main contributing factors for profit downgrades for 7. Nearly 600mil debt hanging over the SWM head will still be holding back News Corp attempt to buy out Stokes shares.

    • Maybe you didn’t read the article Poida.
      Seven was Australia’s most-watched Network, and Channel 7 was Australia’s most-watched channel, both for the 12th year in succession.
      Even more remarkably, Network Seven achieved the highest commercial viewing share in ratings history, and led all the key demographics with our own highest ever shares of each.

      • Even on a good night they can’t crack 1 million viewers, that means that 24 million other Australians can find something better to do with their leisure time (e.g. online streaming, pay-tv, socializing, washing their hair, watch paint dry etc) – that’s why advertisers aren’t paying as much as they used to, the FTA networks have more and better competition. Advertisers also aren’t falling for the highly manipulated and almost meaningless ratings or demo figures produced by the FTA networks, they didn’t come down in the last shower of rain!

        If I were an advertiser I would be paying my invoices on a TBA date and time, because when you look at the commercial FTA EPG you can see that its full of TBA’s. If the networks can’t decide what to broadcast within a 6-24 hour time frame then how are your target demo’s and targets of advertising supposed to know whats going to be on TV that…

          • Sorry David – yes all FTA including SBS (no advertising on ABC so ABC ratings don’t count as far as advertisers are concerned). So including multichannels say the total combined audience for the commercial FTA’s would bounce around between 1.5 million and 2.5 million max in the evening, then that’s still 22.5 million to 23.5 million who have found something more interesting to do than watch FTA commercial TV, and I would expect some of them would be “second screening” as well – so the advertisers aren’t getting as many eyeballs as they used to despite population growth.

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