The Network Ten share price has been bouncing around a bit, more
influenced by the cross media speculation than the events on the TV
screen each night, and so it was Tuesday when the price recovered around
7c to $3.97 after news from a Senate Estimates committee that Ten could
be sold by its Canadian owners.

The share price is well under its recent high of around $4.40 a share.

The news – Ten sale now possible, says Coogan – came as figures were released from the Free To Air TV industry
showing that Ten’s revenue grew the fastest in the back half of 2004,
the most lucrative for the commercial networks.

Ten saw its revenue rise 14.05% compared to the second half of 2003. It
was a clear second to Nine in the metropolitan TV markets with a 31.47%
share of metro revenue, up from 30% in the first six months of the year.

Seven was third and a lucky last as it seems advertisers gave it more
revenue than its ratings performance justified.
Certainly without the Olympic ad income Seven would have been in real
trouble.

We’ve already seen some evidence of the improvement at Ten with the
company reporting a sharp rise in first quarter earnings (to the end of
November) at the annual meeting in November.

Executive chairman, Nick Falloon said that the company had had its first quarter ever, with revenue of $302
million, up 20% after TV revenues jumped 18% on the same quarter a year
earlier – the official statement is here.

The latest figures, prepared by KPMG confirm that and also indicate Ten
should have a pretty good December and January.

Ten was the best performing commercial network last year in terms of its
revenues, profits and more importantly ratings.

It moved passed Seven briefly in all people, but Seven pipped it at the
end of the year. It was the clear winner in its target 16 to 39
demographic and also did very well in the 25 to 54 group, the most
important of all the demographics and where 80% of ad revenue is located.

But this year there’s no chance Ten improving on its all people share
after the revival at Seven.

Ten is doing well in maintaining its lock on the 16 to 39 group, but
Seven is proving to be pretty competitive with Desperate Housewives,
especially Lost and programs on Sunday night like the Category 6 mega
storm disaster epic.

It also continues to do well in the 16 to 54 but Seven and Nine have
that battle to themselves, so after the brief lift last year, it’s back
to the 16 to 39s this year with its ‘Bigness” promos and programs like
X-Factor, Big Brother and Australian Idol.

Ten has been the best of the trio at holding down costs and that is
going to be the new mantra this year with ad revenue growth expected to
slow to the range 5 to 7%.

That is down from the 10% this year and 12 per cent or so in 2003.

Revenue growth in 2004 slowed as the year went on, from almost 13% in
the first half of the year to just over 10% in the last half. With a mid
range single digit forecast for this year the networks, with a lot of
spending and other costs under their belts, will come under pressure
from their owners to keep a tight lid on costs.

Ten has already reported and Seven and PBL, which owns the Nine Network, will follow in the next week or so.

Seven’s result will not be pretty and much will be said about the future
in 2005, and not so much about 2004, except the Olympics and hits like
Dancing With the Stars.

PBL and Nine should have a reasonable year, but there have been
additional costs at Nine and ACP has the extra costs of the Madison
magazine launch, which happens next Monday.

But after these results are over and done with it will be a very
different year with Nine and Seven in the closest battle for years and
Ten having retreated to its core demographic which it aims to protect at
all costs, and keep a lid on costs.

But the news from the Senate hearing on Monday is now a sign that if the
Aspers want to, a deal can be done in Australia that involves the
Ten Network.

But watch the ratings and the revenue figures (the next release is in
August). The grind of the everyday battle for ratings and sales will be the real story in commercial television this year,
no matter the owners.