TV bosses warn investors of continued market squeeze for the rest of financial year
Two of the three major commercial networks, Seven and Nine, have warned investors that the TV market has and will continue to feel the squeeze in the second half of the financial year, flagging a “short” market with “limited visibility”.
Warburton and Sneesby
Seven West Media’s managing director and CEO, James Warburton, spoke at the Macquarie Australia Conference in Sydney yesterday, while Nine Entertainment Co’s CEO, Mike Sneesby, is scheduled to present tomorrow. The latter posted an introductory comment on the ASX this morning.
A similar outlook towards the market was conveyed in both trading updates. Warburton flagged that the Total TV market has declined by about 11% in Q3 FY2023 and was expecting a similar Q4.
Meanwhile, Nine’s updates suggested that the metro free-to-air market declined by around 15% in Q3 and was also expecting a similar Q4.
However, both were upbeat about the outlook of broadcast-on-demand (BVOD) services, which have become the offering that TV media owners like to talk about the most in recent years.
Warburton expected BVOD to maintain double-digit growth in the second half-year. While Nine did not comment on the market outlook, it said its own service 9Now saw nearly 22% revenue growth in Q3.
With the launch of Total TV measurement Virtual OZ (VOZ) this week, media owners have been rubbing their hands in anticipation to explore more areas of monetisation across all screens with advertisers.
In response to these conditions, Warburton said Seven had identified $15-20 million “in new additional temporary cost savings”.
Nine, meanwhile, said its Total TV advertising revenue is expected to be down in the very low single digits (%) for FY2023, and maintained the February guidance of a Total TV cost growth that’s slightly below 7% of the financial year.
Seven West Media’s share price closed at $0.39 yesterday and Nine Entertainment Co closed at $2.03.
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Darcy Song was a reporter at Mumbrella, covering media owners, adtech and social platforms. She left in October 2023.
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