As the Nine Network looks for a new CEO,
there’s news from the ad industry that’s sending a tremor through TV
land: Nine is offering discounts to advertisers in an attempt to
staunch the losses of ad revenue in the July-December period of this
year.

Nine sales boss, Vance Lothringer was reported to be
offering major advertisers a 5% discount on what’s called the “back
half” – the six months from July to December, the most lucrative time
for TV revenue, covering the run-up to Christmas, Father’s Day and
Spring.

Complicating Nine’s position is the inflexibility built
into its rate card, which was introduced late last year for 2005. It
tried to eliminate bonus spots and apart from small discounts for big
clients, fixed maximum rates for various timeslots, without regard to
higher or lower ratings.

So Nine was left unable to maximise successful programs like Super Nanny, and the surge in 60 Minutes ratings this year, and had to fight with advertisers stuck in underperforming programs like the News, A Current Affair, Survivor and Starstruck.
In fact, Nine has all but eliminated the premium it had built into its
rate card over Seven and Ten. That’s one of the reasons why Nine’s
revenue growth has reportedly been softening faster than others.

By
offering discounts, Nine is signalling the abandonment of the old rate
card and willingness to do a deal (all aimed at regaining that premium
by any way possible). It’s a sign the ad market has softened badly,
with Nine being hurt by the loss of share to Seven, even though it
leads the year narrowly.

Peter Fray

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