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Sunday, March 31, 2013

Ten-demonium

The Twitter hashtag for this post is #tendemonium.
This site often asks the hard questions. Now here's one that could have titanic shifts in the Australian media, and could possibly spark a rash of changes throughout the television industry. What would happen if the Ten situation got worse, and what is the remedy? It's this question that is now simply a case of Ten-demonium... It's the Ten-demonium that could see the Ten we all know head towards another 1990-style situation: when the network underwent costcuts but couldn't prevent it going into recievership. But it is a tale that has taken many turns, especially as Ten's demographics keep changing, all while their bread and butter for so many years, the youth: are increasingly turning to the internet first. This Is...

It could simply begin with one question...

Could Ten survive 2013 intact?
Two years ago, there was a major raid on Ten's shares, by Lachlan Murdoch and James Packer, as well as by mining magnate Gina Rinehart. When all these new investors came in, Ten's shares were healthy, especially coming off the GFC, which saw CanWest leaving Australia a year earlier, at $1.60 a share. Fast forward two years, numerous capital raisings, and five CEO's later, along with poor commissions by the network, as well as dropping AFL telecasts, that has seen ratings slide, the share price is now, much lower than Ten had during the GFC, hovering around 30c a share. The big question could be, if a major crash or stock market correction in the stock market were to happen within a year or two, or there is another bear market (financial speak for a slow decline in share markets) will Ten's shares plunge, and see the investors in the network desert it, much like it's viewers have, and pull Ten towards receivers hands? As for Ten's survival: It's a harder case to fathom for most viewers, although it could pick up some sporting rights that remain, like Cricket Australia, Tennis Australia (i.e. the Australian Open), and the Olympics for next year and beyond, but there is yet another factor in Ten's tale.

It's news to me: The news division ripped apart.
At the same time people were buying into Ten, the network was preparing for a major tilt at a reformed news strategy. Gone was Neighbours (off to Eleven, where it revived itself) and in came George Negus at 6, and more local news at 6:30, in Feburary 2011. It didn't last, with the second local bulletin being amalgamated into the 5pm news in April, with George Negus moving to 6:30, all while Ten were keeping to their word, that it was in for the long haul... until October 2011, Negus at 6:30 was axed, while a month earlier, the late news (that had served Ten since the Gulf War 20 years earlier) had been dropped (only for Ten to revive it in 2012) along with revived local weekend news, and the 7pm Project became "The Project", and moved to a 6:30 start in November. 2012, however began for Ten with high hopes, with the Project moving to 6pm-7pm (and gaining a Sunday edition) and the local 5pm news was cut back to a hour. The other new factor was Ten launching a news product at breakfast, called "Breakfast", which included a import from NZ, Paul Henry. The ratings for Breakfast were poor, and some changes were made in August last year: including a bungled axing of "The Circle" (ending a morning television tradition on Ten dating back to the 1980's) and shortening of Breakfast. Eventually Ten realised their senses, and axed Breakfast in November... and that was only the beginning. Soon after, Ten let go of many people in the news department (in a lowlight in a bad year for journalism in Australia in general, when many experienced hands left the newspaper industry) even though the news department was Ten's best performer, and eventually decided to go with solo news at 5pm, axing the network's most credible people: the anchors themselves: like Ron Wilson and Bill Woods in Sydney, Helen Kapalos in Melbourne (who went on to Seven to present a Sydney-Melbourne edition of Today Tonight),  Craig Smart in Perth(a recruit from the ABC, who only came to Ten Perth in 2011) and Bill McDonald in Brisbane (who also went to 7, to become their lead male anchor in Brisbane: a deal done under the tightest secrecy that Brisbane's TV stations had seen since John Schluter joined Seven in late 2006). It now leads us to the question: how far will Ten go, in destroying their once proud and envied news service, which gave us household names like Kay McGrath, Tim Webster, Jana Wendt, Tracey Spicer and Anne Fulwood, along with potentially a further costcut that we should hope never happens: wielding the axe to Ten's local news, in the capital cities: which could replaced by "2 minute noodle" local updates... much like Southern Cross did to many of their Ten-affiliated regions when the ABA introduced a local news quota in regional Australia, after Southern Cross axed it's remaining local news services in Ten markets in late 2001.

Southern Cross Austereo: how much is affiliation to a damaged brand worth?
For this story's seed: we take you back, to November 2001: not long after Southern Cross Broadcasting took over Telecasters Australia (then owners of Ten affiliates in regional QLD and Northern NSW, along with two 7 affiliates, 7 Central via satellite, and 7 Darwin). As a costcutting measure, Southern Cross axed locally-produced news in Cairns/Townsville, the 7 Central/Darwin news service produced out of Townsville as well as the local news for Canberra, and shed a swathe of staff. Then in 2003, Southern Cross signed a 10 year affiliation agreement with Ten: that is due to expire... in June 2013. When the original deal was signed, Ten had AFL, Big Brother and Australian Idol, all ratings generators. Now, Ten has no Idol, no AFL and no BB: while the capital city network has had many turkeys in the last few months, to the point viewers and observers alike are seeing Ten turn into a damaged brand, even moreso if investors desert. Ten needs Southern Cross more than Southern Cross needs Ten: and it needs to make it very clear in any future affiliation deal that there must be at minimum 30min of continuous local news every night (especially if Ten eventually axes local news in the capital cities) in key regional markets by Southern Cross (those markets being: Canberra, Newcastle, Gold Coast (as a locally produced alternative to TVQ's news), Cairns/Townsville and Darwin (a joint venture between 9 Entertainment Co, and Southern Cross) : a simple demand that some of those communities want: news produced in their community, not elsewhere, or interstate. But there is also another factor that could come into play...

The case of the "glorified multichannel"
I fear, that Ten will eventually become less of a flagship, and more of a multichannel, as we arrive in a fully digital environment at the end of 2013. As the digital switchover progresses in metropolitan areas: Ten needs to watch the ratings patterns (already demonstrated by Southern Cross in Canberra) in the three smallest capital city markets, Brisbane, Adelaide and Perth, which will all switchover from analogue within a two month period (between April and June this year), for implementation nationally, after Melbourne and Sydney switch in December. This could include offering better first-run content, than multichannels (esp. as they will have to have some Australian production soon), including a major spend on Australian drama, to bring Ten back as a force, like it was in the 1980's, when the network had turned the Australian mini-series, into to a artform, thanks to local successes, like Bodyline, The Dismissal, and Bangkok Hilton. Another way to bring Ten back from the "glorified multichannel" positioner, is to invest heavily in content that 7/9 have abandoned, such as local news. It doesn't just need it at 5pm, but throughout Ten's schedule, including utilizing the breakfast slot for local news relevant to the market, not a carbon copy of Sunrise or Today as well as the late night news time period and returning weekend local news. This would be a real news revolution, as 7/9 would struggle to compete with programs catering to local tastes, where as Breakfast was seen as a one-size fits all approach. As for countering the internet: the old saying goes...

You can't beat them, join them: A better strategy to make Ten innovate the internet.
Why a better strategy for the internet? Just ask Foxtel: when they developed in the slipstream of it's Olympic coverage (which utilized a highly praised iPad app, to relay all eight channels while doubling as a second screen), Foxtel Go for iPad, and offered to their subscribers most of their channels, directly to their tablet via their WiFi or 3G connection. What Ten simply needs is a similar app that not just offers their three over the air channels via WiFi/3G to any tablet or phone: (iOS or Android), but offers app-exclusive channels, with content that can deliver choice of a second screen, or a new dimension. How this theoretical app would work, would be that Ten would launch local apps for each metro market, for both iOS and Android, then negotiate with various ISP's and mobile operators, to allow the app to run un-metered, to allow for maximum usage by the masses. Ten, 11 and One, on these apps would be relaying their local Ten station, including local ads (hence separate apps for each metro market), and two channels would be created especially for these apps: a retro channel, offering older Ten content, plus timeshifted stuff from all three channels, and a rolling Ten news channel (similar to what is on VAST, except restricted to Ten content) , replaying Ten's local bulletins from around the nation. Along with this, it would integrate Ten's catchup TV into the apps, potentially allowing Ten to continue series via the online medium, over non-ratings period, and most importantly, if Ten don't onsell the internet rights to the 2014 Commonwealth Games, they can use the theoretical app to deliver up to four channels of Comm Games coverage, 2 terrestrial relays, two app-exclusive channels. But with this comes a big question: In a era of convergence, will Ten end up looking different in the years to come...
 
The Convergence Review recommendations slowly being implemented.
The two big recommendations by the federally set-up Convergence Review (which sought to look into how Australia's media regulations may need to change in the next few years, to adjust to a fully convergent media environment) are 1. Dropping the 75% reach rule, which restricts how much a television broadcaster can have access to in terms of the total Australian TV audience: and 2. dropping the 1 to a market rule for television (which prevents the merger of two commercial networks). Two opportunities exist, once the 75% rule is axed, while another, only exists if the 1 to a market rule were to be axed.

Opportunity 1: WIN merger with Ten. The 75% rule when it's lifted, will present a major opportunity to Bruce Gordon and Win Television: a instant pot of cash if you will, just by selling the metropolitan Nine affiliates Win picked up in 2007, to Nine Entertainment Co, to allow for better management of the metropolitan Nine Network. But how to spend the $300-400m the Win network could get for the two affiliates? Simply, use Win's collective history of making waves in the industry, whether it was DDQ-10 (now part of the Win network) buying TVQ-0 in September 1987, or Star Television, becoming WIN Queensland in December 1990, and taking the 9 affiliation away from a stunned QTV, to launch a major move that could have ramifications throughout the industry. Quite simply, Win would buy the Ten's in the capital cities for a bargain, if the Ten share price collapses post-75% elimination: after all Bruce Gordon already owns 14% of Ten. But here's the kicker: Win would then flip their stations (that can do so i.e. all the third network digital joint-ventures that Win partakes in, in Mildura, WA and Tasmania would need to have their stake sold) to Ten O and O's and possibly bid for SC's Northern NSW outlet: once eyed off by WIN after the DDQ/RTQ switch to Nine after it handled initial playout for Win in southern QLD.

Opportunity 2: Southern Cross Austereo merging with Network Ten: Another one for the 75% rule's end, a merger between the largest Ten affiliate, and the main network. Southern Cross Broadcasting ten years ago, controlled all avaliable Ten affiliations at that time in aggregated Australia, along with a talk radio network. In 2007, Southern Cross's TV assets was bought by Macquarie Media (who eventually changed their name to Southern Cross Media), and the talk network was onsold to Fairfax. Eventually, another major radio purchase was going to happen: 2011's purchase of Austereo, and although the now greatly expanded Southern Cross radio business is a behemoth in the younger demographics, the television side of the business is being let down by their Ten affiliates poor performance. This is where a potential Southern Cross Austereo/metro Ten union would benefit, from the brains in the metro radio division, being contracted for television to provide all new content, along with stronger management: After all, Southern Cross has "grown up" since the Austereo acquisition: having to deal with so many more talents directly along with the controversies, that came with the acquisition of the home of Kyle and Jackie O and Hamish and Andy. Southern Cross can make Ten back into a stronger broadcaster (especially if it can see opportunities to follow in Austereo's footsteps (like when it unified facilities for the Today/Triple M networks in the 2000's), and look to bring the Ten stations in Brisbane and Perth into brand new facilities with the local SCA radio stations) and it needs to be upfront about it, before it thinks of other ideas.

Opportunity 3: Seven and Nine buying into Ten.
The third and final opportunity is a radical move steeped back over 20 years, from when the television sector in Australia was almost on it's last legs. A concept was mooted in 1990, that never made it past the drawing board, after the recievership of the Seven and Ten networks, was the weird idea of merging the two bankrupt networks and condense the Australian TV industry back to 2 commercial stations in the process. Thankfully it never happened, but what if the 75% rule, and the 1 to a market rule for television was axed? It would simply let Seven and Nine eat Ten whole, and run the network as a joint-venture. In a digital era, bandwidth is as valuable as a programming deal, and Ten could be in the firing line. How a joint-venture 7/9-owned Ten would look like, is simply that two channels (10 and Eleven) would be dedicated to becoming a dumping ground for unwanted content from 7/9 along with the unwanted Ten content that didn't make it to 7/9, with the main channel airing a token news bulletin, to keep the regulator happy. The current One would then be converted to a Sky News Australia relay, and the TVSN datacast would be converted to a relay of Sky News owned APAC. But the regulator may not approve of a reworked Ten, in this fashion and instead reallocate the Ten bandwidth to a new third commercial network, to prevent a 7/9 duopoly of television content where one has to always match the other... just like Coles and Woolies do in the retail sector.

But, as we close this: Ten have undergone more moves. James Warburton is gone as CEO after a return of the poor performance of the main channel in late 2012, at the start of the 2013 ratings season, with Hamish McLennan being installed in the CEO spot: Adam Boland, being installed as a director of Morning Television, with no morning television to preside over as yet, and there's the prospect that Southern Cross could be leaving Ten in the dust, and go for affiliation, even a merger (provided that the 75% rule is removed) with Nine, when it's deal with Ten is up in June, leaving the Win network, who has already a slice of the network's pie, likely to bolt to Ten... Whatever happens, it will be a case, of Ten-demonium: that is about to turn from unthinkable even five years ago, to living, breathing reality.

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