We have once again seen the financial cost of the changes inflicted on the Nine Network by James Packer, John Alexander, the late Kerry Packer and their appointed executives in Eddie McGuire, David Gyngell, Sam Chisholm, Chris Anderson and others.

Nine recorded its lowest ever share of TV revenue of 30.81% in the last half of 2007, which was in third behind Ten on 30.84% and way behind Seven on 38.35%. That compares to first half shares of 39.18% for Seven, 32.72% for Nine and 28.10% for Ten.

Taken over the full year, Seven had an average share of 38.76%, which was above its all people audience share for the year of 37.5%. Nine had an average of 31.76%, which was below its all people share of 34.2% and Ten’s share of 29.47% across the full year was above its all people share of 28.3%.

Eighteen months ago, Nine was the leader, thanks to the Commonwealth Games in the first half of 2006 with a share of 36.58%, with Seven on 36.42% and Ten on a depressed 27%. If Nine had been able to maintain that share of 36.58% in the December half, its revenues could have been upwards of $100 million greater than they were. But Seven and Ten have grabbed that share and turned it into their premiums.

Seven lifted its all people share half a per cent last year, and managed to maintain a premium share of ad revenue over audience share for the full year. Ten boosted its revenue share by enough in the second half to give it a small premium, despite a loss of 5.3% of viewers in all people while Nine shed 9% of its all people viewers over the year and shed ad revenues as a result.

As TV revenues in the five major metro markets rose 9.03% over the year, Nine went backwards at a rate of knots. Nine’s average revenue share in 2006 was 34.69% — more than 8% above the share average for the following year.

It was a long-stated ambition of Kerry Packer for Nine to boost its ad share to a point where it exceeded its audience share: it never quite made it, despite its long dominance up to 2005-06. Ten in fact was doing that while Seven was dragging the chain. Now Seven has done that easily, with much of the kudos due to former Nine management who were driven out of the company by the Packer’s Alexander and others.

Now Nine is looking at a loss this half from its main three stations in Brisbane, Sydney and Melbourne because of higher spending on programming. Pre-tax earnings are running at an annual rate of $150 million according to insiders, much of that earned in the December half thanks to strong advertising for the Federal election and in the lead-up to Christmas.

In 2007, total TV advertising reached $3.788 billion, up 8.1% from $3.504 billion in 2006.

Peter Fray

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Peter Fray
Editor-in-chief of Crikey