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Ten’s Wake Up call: why news cuts won’t save the network

The problems at the Ten Network go well beyond its ill-fated breakfast show. Poor programming decisions are cruelling the No. 3 network, write Myriam Robin and Glenn Dyer.

The end came yesterday, and after weeks of speculation, it surprised no one. At around 12.30pm, staff at Channel Ten were told the network would axe, after just six months on air, its hyped entry into breakfast television. Wake Up’s last show will be on Friday. Also facing the chop are 150 jobs from its news division, with voluntary redundancies for journalists, editors, cameramen, engineers and floor staff. Gone will be three daily news broadcasts, as well as bureaux in the United States and United Kingdom.

It’s the third time the news division has been cut in recent years, even though, industry insiders told Crikey, it’s been the standout performer at the network. Job losses since the first round of redundancies in 2011 total close to 500. Each time the cuts have concentrated on the news business, with only the first round of cuts really justified after management’s jettisoning of the up-market news philosophy epitomised through the hire of George Negus (the extra staff taken on for that had to be culled).

A former senior Ten journalist told Crikey it would be increasingly hard for the news division to keep up with its rivals at Seven and Nine, even though it was performing admirably so far. It’s a sentiment that echoes that of news and current affairs director Peter Meakin, who described his staff as “heroes” in an interview in this morning’s Australian. “For years they’ve been churning out great product with less resources than their competitors,” he told the newspaper.

Meakin joined the network in February and according to insiders is now reconsidering his position at the network. To Fairfax yesterday, he said “it’s up to [the board] whether they need an admiral when they don’t have a fleet”. Meakin was hired to boost the network’s news division, and is instead forced to preside over cuts.

In interviews with Fairfax and News this morning, CEO and chairman Hamish McLennan blamed the regulations, and the tax-dodging of companies like Google, who compete with television stations despite being burdened with no similar regulations. “This is in part why the media laws need to change, because we’re not operating on a level playing field,” he told The Australian. That’s a long way from the reasons outlined in his memo to staff yesterday, which said in part:

It is a tough period for Ten and we need to take some painful, but necessary, measures to restructure the business. Our existing business model needs to change and we need to achieve greater efficiencies, tighter cost management and greater focus in terms of the parts of the company in which we invest. A review has been conducted to establish a new structure for Ten and to better allocate our resources, with the aim of improving our performance….We are in a constant, fierce battle for the attention of viewers and we need to ensure we are investing in the areas that will deliver the greatest potential in terms of audiences and revenue.”

That was a more accurate assessment of the company’s current problems. Fragmentation and concentration is affecting everybody, but Seven and Nine, not to mention the ABC and SBS, are all hacking ahead, trying to battle industry-changing factors.

The failure of Wake Up was unsurprising. At its best, it had a tenth of the audience of Seven’s Sunrise and Nine’s Today. ”It just wasn’t sufficiently different,” said Fusion Strategy’s Steve Allen. Before launch, executive producer Adam Boland, lured from Seven where he had engineered the ratings-topping Sunrise, said breakfast television was in danger of becoming “a little stale”.

But the changes he rolled out consisted of a different studio location (at Manly Beach instead of in the CBD), a different style of studio (the hosts sat behind a news desk rather than on a couch), a heavier reliance on audience participation through social media, and a trio of younger, fresh hosts. The hosts didn’t rate — Natasha Exelby was dropped from the program after just three weeks. But even then the remaining hosts — James Mathison and Natarsha Belling — took time to find their feet, or in Allen’s words, “they just weren’t very intuitive with each other”. He describes Mathison’s early performances as “wooden”, and the early programs were “clunky” (Crikey’s reviewer at the time wasn’t impressed either).

Sunrise and Today are 200-pound gorillas who, asWake Up went to air, defended their ground brilliantly.”

But the key problem for Wake Up was Sunrise and Today. Usually competitive, both programs shifted things into overdrive when Wake Up launched. This was to be expected but, Allen says, few expected the “ferocity” of how they defended the $100 million in ad money available. “Sunrise and Today are 200-pound gorillas who, as Wake Up went to air, defended their ground brilliantly,” he said. “They spent millions in that first month — cash prizes, promotions, cross-promotions with advertisers … They just locked Ten out. And it stayed locked out.”

Indeed, Studio 10, launched at the same time, usually had higher ratings than Wake Up, leading to a curious situation where ads were cheaper after breakfast on Seven and Nine, but more expensive on Ten. The whole thing wasn’t helped by Boland leaving the show after two months on air due to ill health, which he described on Twitter yesterday as one of a number of things that let down the Wake Up crew.

Wake Up’s demise, along with this third round of job cuts, does nothing to shift a persistent pessimism among industry watchers over Ten’s future, with many shifting the blame straight to the top. Indeed, Ten’s biggest problem hasn’t been high recurring costs, but shows that have flopped.

Ten has just three programs that can be said to be performing: Offspring (which returned last week on Wednesday nights), the various news broadcasts, especially the 5pm state-based bulletins, and The Project (daily 6.30-7.30pm), which has perked up in the past six weeks after a weak start to the year. The Biggest Loser, So You Think You Can Dance Australia, MasterChef Australia and a host of other local and imported material have flopped or fallen short of expectations, costing the network millions of dollars in unrecoverable production costs and lower than expected revenues.These programming missteps have cost Ten credibility with viewers and advertisers, as well as independent production companies.

Things have become so bad for Ten that its viability is now in doubt. These cuts were made because of the fall in revenues since March 1, and because of the fall in prime-time ratings, not just from 7-8.30am. Revenue is weaker this half-year (starting March 1), instead of steadying and then edging higher as was expected. The company’s share of industry revenue is down to 19%, according to a monthly index of revenues. Two years ago it was closer to 27%.

Spreadsheets aside, some maintain Ten’s problems are about the people in charge. A highly experienced television journalist told Crikey this morning that television is, at its heart, a people business. “People make television and people watch it,” he said.

No one in it purely for business reasons is ever going to make television work. Kerry Packer realised that — he treated it like a business but knew it wasn’t any ordinary product. But the current management treats it like any other product business. It doesn’t work like that.”

4
  • 1
    zut alors
    Posted Thursday, 22 May 2014 at 1:33 pm | Permalink

    The problem is misguided management decisions. TEN’s wealthy owners & significant shareholders (eg: Rinehart) seem capable of understanding balance sheets but have no insights into the entertainment industry or their audience.

  • 2
    The Pav
    Posted Thursday, 22 May 2014 at 3:37 pm | Permalink

    The key point is that it wan’t different….I haven’t seen any numbers but I’m guessing The Project is doing OK as it is different

  • 3
    Stuart Coyle
    Posted Thursday, 22 May 2014 at 4:01 pm | Permalink

    TEN’s age of entitlement is over.

    To misquote an old song: “Internet killed the video star”

  • 4
    Stuart Coyle
    Posted Thursday, 22 May 2014 at 4:18 pm | Permalink

    I also wonder who watches TV between 7 and 8:30am? The unemployed and pensioners wont be able to afford TV soon.

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