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Aug 28, 2012

Lach, stock and both barrels: who's killing Channel Ten?

Five years ago, the Ten Network -- thanks to its focus on the advertiser-friendly young demographic -- was the country's most profitable network. Now it's the least profitable. So what happened?

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The champagne was flowing, Sydney Harbour was sparkling and Lachlan Murdoch was full of optimism.

“To be brutally honest, a couple of years ago Ten had lost its mojo,” Murdoch, the Ten Network’s then CEO, told the crowd at the station’s glittering programming launch last August. “But we have rediscovered it, we have reinvested in it and we have re-energised it … Ten is back.”

Things, as anyone who’s turned on a TV set over the past year is well aware, haven’t gone to plan.

Ten’s line-up — think Everybody Dance Now, The Shire, Breakfast, Being Lara Bingle — has flopped as badly as Breakfast host Paul Henry’s infamous Sheila Dikshit gag. Advertising revenue is in freefall. The company’s share price has almost halved since January.

Five years ago, Ten — thanks to its focus on the advertiser-friendly young demographic — was the country’s most profitable network. Now it’s the least profitable.

Some in Canberra worry about the health of Ten and what its demise could mean for media diversity. Media buyers are panicked; without a strong Ten, Seven and Nine can hike up their ad rates. The question echoes across across the media landscape: who’s to blame? Who’s killing Channel Ten?

The answer: there’s plenty of blame to go around.

David Mott, Ten’s programmer for the past 16 years, quit on Friday. While there’s no doubt Mott should accept his responsibility for the flurry of flops, insiders say the popular veteran has been let down repeatedly by Ten management.

“They’ve forced the one guy who knows what he’s doing out of the business,” said one producer.

First there was the affable, burly Grant Blackley who served as CEO from 2005-2010. Blackley, and executive chairman Nick Falloon, oversaw the network’s $20 million foray into serious news and current affairs featuring grizzled TV veteran George Negus. Many said it couldn’t, wouldn’t work. It didn’t.

“They changed direction when Blackely was running it away from the model of attracting the under-40s,” John Steedman, head of media buying agency Group M, told Crikey. “They lost their viewers and have tried to get them back but they’ve moved to other channels.”

Blackley also oversaw the disastrous launch of One, a sports-only digital channel, and ticked off on last year’s mega-flop The Renovators. “I’ve never seen a show crater an entire network like that one did,” said a producer. “That show pretty much destroyed Channel Ten and they’ve never recovered from that.”

Then came Lachlan Murdoch. He gets points for pulling the pin on Negus, trimming costs, and shifting the digital focus away from sport to entertainment. But he also oversaw this year’s programming strategy — including the calamitous Breakfast. Many will never forgive him for not stumping up enough cash to win the rights to The Voice or Big Brother, both of which have been hits for Nine. The word in TV circles is that Nine outbid Ten for Big Brother by a paltry $1 million.

“How do you make a $10 million business?” goes a joke doing the rounds in media land. “Give Lachlan Murdoch a $100 million business.”

Insiders say he was too focused on minutiae — the font on a title graphic, for example — rather than the big picture.

There were high hopes for James Warburton, who took over as CEO in January after sitting on the sidelines for a year after a bruising departure from his role as sales boss at Channel Seven. Warburton, an ambitious, energetic character, had been seen as an eventual successor to David Leckie.

But the shows he’s commissioned — including Everybody Dance Now, axed after only two weeks — have performed abysmally. Ten failed in its bid to secure the highly profitable NRL sports broadcast rights. Warburton was not available to be interviewed by Crikey.

“James always wanted to be a programmer,” said one Ten insider. “He was good at sales and believed he knew all about programming. James wants complete control and wants to do everything. He doesn’t want anyone else involved.”

“He’s not an instinctive programming guy,” said one producer. “He’s a bad decision maker in a job where you need to make solid decisions,” said another.

Those making programs for Ten say Warburton and co are obsessed with audience research findings rather than intuition about what will and won’t work.

“You sign a contract with Ten at 12, then you’re having a review at two and another at four,” said the creator of one of Channel Ten’s best-known shows. “They’ve put all their eggs in the research basket.”

Factors out of Ten’s control are also at play.

“US content deals are producing far fewer surefire hits than they ever have before and that was a massive part of Ten’s business model,” said Peter Horgan, CEO of media buying agency OMD.

And the advent of multichannelling has allowed Nine and Seven to use their second channels to nab Ten’s younger viewers with repeats of US comedies such as The Big Bang Theory and Two and a Half Men.

Although the situation looks grim, wise heads say things can turn around. Channel Nine, only a couple of years ago, was considered a joke and now it’s a ratings triumph. One or two big hits can change momentum.

The only problem? There isn’t one in sight.

Matthew Knot —

Matthew Knot

Crikey media editor

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19 thoughts on “Lach, stock and both barrels: who’s killing Channel Ten?

  1. JacetheAce

    Warburton is a salesman, not a creative and no amount of wishing himself to be one will get him there if he doesn’t have the talent for it; and by the looks of Ten’s schedule he certainly doesn’t. As for Murdoch, well, let’s just say someone got lucky in the gene pool stakes. Money only gets you so far in life if you don’t have the smarts to back it up. But, at least Ten isn’t One Tel (at least, not yet). Murdoch’s ‘attention to detail’ has been noted in various other roles he has performed when he was with News Ltd/Corp.

    I presume Mott was disposed of because Ten wants to grab Adam Boland who created Sunrise; although it seems the spike of interest in breakfast television has past. It’s the only thing that can explain the continued presence of Ten’s breakfast show, which is probably outrated by the Russian news on SBS. Mott was, by and large, a good programmer; it’s only in the last two years that the output has really stunk up the joint. Ten is streets ahead of Nine and Seven in the drama department, with Nine relying on the interminable Underbelly and Seven on its cheapo Rafter/Blue Heeler/All Saints rubbish for years. Now that Nine has had success with Howzat, expect a raft of mini-series based on cultural icons of the 70s. Up next, the warts and all of Hey, Hey It’s Saturday. At least Ten has given us Offspring from John Edwards (who was also responsible for FOXTEL’s Love My Way).

    Ten is seriously in danger of falling behind even SBS on some nights. For that, the entire management team needs to be replaced, because that is simply unacceptable on any level.

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