Turbulent times for Channel Ten

Posted on May 3, 2017 12:00 am

Call it Network Ten or Channel 10, the network has definitely confirmed an ailment affecting broadcast media business has finally caught up with it. Last week, I shared my views when ESPN, an American broadcaster announced its restructuring plans that left tens of people jobless and as someone who follows this industry closely, when Channel 10 announced a half-year net loss of $232 million last week, it didn’t shock me.It’s not been easy for Australia’s traditional television industry with studies showing audiences are falling amid competition from internet streaming services.The decline in the number of people watching traditional television has not just occurred since the advent of online streaming services. The trend has been clear for some time now in multiple studies from audience monitoring firms in Western countries.The main reason for the change in television viewing habits is the internet, which has led to a large uptake of new screen media devices such as computers desktop and portable, smart phones and tablets. But what will happen if Channel 10 doesn’t get funding it needs to stay afloat? Your blogger can only hope it does because he love watching Sandra Sully and Stephen Quartermain of this world.Channel 10 may lose the Big Bash if financial struggle continues. Losing the rights to the high rating Twenty20 competition will be a devastating blow to its future. There’s speculation already that Channel 9 will pick it up and pay Cricket Australia about a $250 million for a five year period.What Channel 10 troubles tell is that established media organisations are under a threat and those who will be affected most are free-to-air industry not only in Australia but across the world.Streaming platforms growing audience is far different to that of stations like Channel 10, which are seeing their prime-time plummet. As an industry watcher, I’m not surprised by this decline in television viewing because broadcast television continues to lose in a changing market and in my view television is no longer the only effective platform for the delivery of large and engaged audiences to advertisers.Studies have shown that streaming ads or online ads were far more effective than TV ads in driving sales. It is no surprise then that Channel 10 has been shattered by broadcast industry wide ranging challenges. According to its financial report released last Thursday, growth of revenue was not enough to offset higher costs and a tough advertising market. Channel 10 woes are not an argument based solely on the falling audiences, the platform, nor the devices the channel’s viewers can access it. It’s about content. Content is still king as its been the case with Big Bash but online platforms have the ability to do something that commercial broadcasters like Channel 10 cannot manage and that includes offering niche content to a mass audience within and outside their geographical areas.

Unless channel 10 can secure funding, this logo may not be with us for long
Unless channel 10 can secure funding, this logo may not be with us for long

Some of the most popular online videos regularly garner millions of views. Compare that to Channel 10 show Eyewitness News that averaged less than 300,000 viewers across five state capitals last weekend according to daily data on Tv viewership. There are also plenty of online content producers getting hefty views on their videos that Channel 10 will die to have. For Channel 10 and others to survive, they need a different approach to niche content. When it comes to online streaming, it gives user information that can help understand your viewer better and place the content that does have broad popularity and can target its content to specific subscribers.The approach by commercial television broadcasters like Channel 10 to satisfy a mass audience is no longer ideal. Its the era where personalised viewing is the desired model for consumers.The rise of on demand services is changing viewing habits and the influence of social media all mean it is becoming harder to reap profits from advertising and retain strong, reliable audience figures.Media landscape has changed dramatically with streaming, online and fragmented audiences creating a whole new ball game. Channel 10 is said to be facing increasing pressure to bring in more viewers with fewer resources and thats the difference between it and say, online creators who are successful. Online programs differ from what is on Channel 10 and its competitors with many having a shorter format and, more importantly, online presenters engage with viewers as if they were speaking directly to them. This isn’t the case when you think of Channel 10 shows like I’m A Celebrity and Australian Survivor. The content on video on demand platforms could, for the most part, be described as niche, an area commercial broadcasters don’t engage with. Channel 10 need to present broad programming to get as many people as possible viewing at the same time. This is fundamental to a business model based on advertising, which is gauged by viewers as has been the case with Studio 10, a mid morning program which has has proved immensely popular with viewers. Also, Channel 10 has tried to target youngsters with The Project and other reality television shows. There is no doubt MasterChef will be a hit for the foreseeable future and it has shown Channel 10 can still gain a large audience for niche content. Channel 10 need to remember that young people are deserting the living room television in droves. Young Australians have gained many more entertainment options in just the last few years thanks to the explosion of smartphone and tablet ownership and Australian market is among them, after all, it is among the top three countries with highest iPhone penetration in the world.Those youngsters in Sydney, Brisbane, Melbourne, Perth and Canberra trooping online for content have grown up in a world of ubiquitous screens, online video delivered by broadband and mobile apps. Improving internet speeds in Australia thanks to national broadband network, both at home and on the move, are also probably playing a role and traditional media companies like Channel 10 will continues to be affected by technological changes. My view is that Chanel 10 need to build up its production and selected show rights holding businesses to diversify away from advertising which in the long term will be a way to secure itself for a time where broadcast television is less lucrative. Its clear that those who own rights to popular content have a bright future, even if those who only distribute it may not. The challenge for Channel 10 should also seek young audiences and convince its advertisers to follow viewers away from the main screen in the home. Undeniably, these are difficult times for Channel 10 and other major media companies some of whom have announced job losses like ESPN and ABC in Australia.

Contador Harrison