The South Australian regional TV market is the smallest in the country: just $29.77 million in revenue in the year to June. That’s around two weeks’ revenue in the rich Sydney market.
So a switch in the allegiance of regional broadcaster, WIN Corporation, from Nine to Seven in that state, won’t cause too much financial impact. But it will send a message to PBL Media that they need to do a deal for the affiliation fee it charges WIN for its regional stations and for Perth, which it bought earlier this year.
The message might not be fully understood by PBL Media’s new owners, CVC (officially as of yesterday), but after a couple of very inconclusive sets of negotiations, you would have to be blind or stupid not to know that WIN wants a better deal.
The switch from Nine to Seven in part of South Australia followed talks between WIN and CVC’s Australian boss, Adrian MacKenzie, late last week. It seems each time there are talks and nothing happens, WIN does something afterwards to emphasise its determination: a bit like kidnappers cutting fingers off their victim to ratchet up the price.
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But CVC might be inclined to tell WIN to put up or shut up. WIN wants a cut in its affiliation fee from 34% to 29%. PBL Media wants at least 40% of WIN’s revenues.
WIN has already dropped several marginal Nine programs from its schedules in regional areas and on the Nine stations in Perth and Adelaide, but it can’t do much more that’s symbolic and largely cost neutral.
It can’t switch affiliation in other states because Seven has Queensland through Queensland and Prime TV is Seven’s affiliate in NSW and Victoria.
WIN does have a regional sales joint venture with NBN, which was bought by PBL Media earlier this year, based in Sydney. Dissolving that would impose additional costs on WIN, which is not the object of the game.
Getting rid of the sales joint venture would be a dramatic and expensive step, but it would concentrate the minds at PBL Media. But to the point of meeting WIN’s demands? Not at the moment.