Ten To Jump Gun On Multi-channelling Launch
Sydney Morning Herald
Thursday October 16, 2008
NETWORK TEN is preparing for a jump on its broadcast rivals with an announcement on November 17 detailing its multi-channelling blueprint for next year.
The three commercial networks have been silent on their plans for introducing digital channels next year but Ten's network sales director, Vance Lothringer, told the Herald yesterday the broadcaster would reveal its plans next month. The news is likely to hasten announcements from Seven and Nine for their digital launches next year and comes as Nine and Ten call for media buyers to allow them to bid on the $300 million in advertising forecast for pay TV next year. "Why should they be treated any differently," Mr Lothringer said. "The last time I looked I get my pay TV through my telly. With multichannelling coming on, it's going to get very blurry and murky. It will eventually happen."Nine's network sales director, Peter Wiltshire, has been the most vocal in advocating open access to pay TV's advertising allocation, although he admitted the response from buyers had been "moderate". Some argued Nine was pushing hardest because of its plans to achieve a 35 per cent share of the metropolitan TV ad market next year."It needs to change from a three commercial network discussion," Mr Wiltshire said. "As small as pay TV and SBS are, they're emerging and the [rate] negotiations platform [for 2009] needs to look at a broader measure than free-to-air TV. We're obviously interested in competing in the $13 billion advertising media space but there is, on the immediate horizon, the obvious emergence of SBS and pay TV."Network Seven ruled itself out of the revenue push on pay TV. "Pay TV has a place but in terms of revenue it's irrelevant," said Seven's chief sales and digital officer, James Warburton. "Pay TV is completely irrelevant to us. We are interested in the $10 billion advertising market [excluding classifieds and directories]. Why would you want to scoop a glass of water out of a very small pond?"Key media buyers were also less than enthusiastic. "Basically pay TV is still massively under-commercialised when you look at its audience share," said OMD partner Peter Horgan, who handles media buying for Telstra, a co-owner of Foxtel. "If they [TV networks] want to talk revenue share, there will be an ugly conversation on audience share. It's not a one-way conversation." GroupM Trading director James Parkinson agreed. "The facts are simple. Advertiser investment into subscription TV lags their audience value significantly. Money follows audience across every media channel. Subscription takes about 7 per cent of the revenue and delivers in excess of 20 per cent of the audience. They have plenty of revenue growth scope. A consolidated push from the networks, who seem far from unified at the moment, works firmly in subscription TV's favour." Mr Wiltshire said the biggest attraction for buyers of pay TV was the low prices charged by Foxtel and Austar for advertising air time. "Niche audiences in every media market never attract the same margins as mass audiences," he said.
© 2008 Sydney Morning Herald
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