Australia | Jun 02 2006
By Greg Peel
FN Arena has long predicted the slow death of free-to-air television, despite whatever measures the government might use to provide ill-conceived life support to a lame duck. The broadcasting industries in just about every other Western nation fall about themselves with laughter when they discuss what goes on downunder. Decades of prostrating at the feet of Packer and Murdoch has left the country in the Jurassic Era.
UBS expects that the industry has continued its decline in the June half having declined 1.8% in the December half. It has downgraded its growth assumption by 0.2% to negative 2.4%. This represents a further loss of $34m in revenue or $27m in earnings.
The Nine Network (PBL) has undergone somewhat of a ratings resurgence since "Still Number One" was Number Three a couple of months ago. However, take out the Todd and Brant circus and Origin I and there’s not too much to get excited about. UBS has increased assumptions on Network Seven’s (SEV) short term ratings share.
UBS expects Sydney is the weakest link in the growth numbers, echoing similar developments in radio. This would not surprise as one might assume Sydney would be a focal point for the take-up of new technology. The Commonwealth Games, when all said and done, registered barely a murmur on ratings, outside of the Opening/Closing Ceremonies. Was this because Australians quickly tired of the extraordinarily woeful coverage? Or because various other means (internet, mobile phone, digital TV) were preferred?
The June half of 2005 saw 6.5% growth, and December 2004 saw 13%, which puts this year’s figures to shame. UBS believes growth may cycle back in 2007, but it does seem fairly wishful thinking.
As Nine is part of the Publishing & Broadcasting empire, UBS has left that company unchanged at Neutral. Seven loses $1.00 of its target price to $9.55 but remains at Neutral. Network Ten (TEN) loses $0.10 to $2.70 which triggers a downgrade to UBS’s lowest rating of Reduce. UBS suggests Nine and Ten will lose further ratings to Seven.
Nine will be looking long and hard at what it does with the Ashes.