‘My network rules’ as Ten bounces back

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SWM.AX1.90+0.0250
SXL.AX1.375+0.0550
TEN.AX0.26-0.0050

Ten Network Holdings (TEN.AX) has posted its biggest share of the metropolitan television advertising market in almost a year, suggesting the company is on the comeback trail.

Ten recorded a 25.1% market share in March, up from 23.5% in February and 20.2% in January. That’s still a long way off Seven Network’s – owned by Seven West Media (SWM.AX) – share of 41.1%, according to Standard Media Index (SMI).

Ten’s new chief executive Hamish McLennan has implemented a new strategy for the free-to-air broadcaster, eschewing the youth segment it previously focused on. Cost cutting, programming execution and a slightly older audience mix are the right ingredients to turn around the fortunes according to Mr McLennan.

Ten recently reported a $243 million loss for the six months to the end of February, which included $304 million of writedowns on its TV licences. Revenues slumped due to several significant ratings flops last year such as The Shire and Being Lara Bingle.

Mr McLennan suggested those types of shows were aimed at younger viewers and alienated a lot of the network’s regular viewers, hence the ‘back to basics’ approach.

As an example of that approach, The Australian Financial Review (AFR) is reporting that Ten has entered exclusive negotiations with Cricket Australia. The struggling broadcaster has reportedly bid $350 million to take cricket rights away from incumbent Nine Network and Fox Sports. Nine still has its last rights clause which gives it the option of trumping Ten’s bid, although the AFR believes the two networks could collaborate and divide up the coverage.

Ten is also in negotiations with its regional affiliate Southern Cross Media (SXL.AX), which is considering defecting to Nine, likely due to Ten’s recent programming and performance. That is expected to be resolved in the near to medium future.

Foolish takeaway

Unfortunately for Ten, as well as the other free-to-air networks, the TV ad market continues to fall, as other entertainment avenues such as pay TV and internet TV increase their market share. That makes it even tougher for Ten to stage a comeback, although it appears to be doing a lot of things right so far.

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