Seven's share of TV advertising revenue in the January-June period was the second highest recorded since the current method of audited figures released on a half-year basis started in 2005. Ten, meanwhile, recorded the worst.
Figures from Free TV Australia
show Seven's share rose to just over 40%. That was second only to the 41.38% recorded in the July-December half of 2008-09 and was up a massive 2.4% from the 37.6% share Seven had in the first half of last year. It was also up nearly 2% from the 38.10% recorded in the December half of last year. Ten's share sank to just over 25.5%, from 28.85% a year ago and 27.03% from the December six month of 2011. Nine's share was 34.45%, up from the 33.55% recorded in the first half of 2011 and 34.87% for the back half of last year.
Seven boosted its share in a market that fell 1.15% to just over $1.8 billion in the six months. Taking into account the first six months of the 12 months to June 2012, total FTA revenue fell to $3.876 billion from $3.993 billion in 2010-11, which was the all-time high. Even though the ad market was rough, the total was still well above the $3.692 billion recorded in 2009-10 when the full extent of the GFC was felt on TV revenue streams.
And while two extra AFL games a week (snatched from Ten) helped Seven in the latest six months, so also did its dominance of the faster-growing Queensland regional market, which grew 3.9% to $104.6 million (which meant it moved past metro Adelaide's $101.5 million, down 4.37% for the first time). Through 7Qld in the regional area and BTQ 7 in Brisbane, the network dominates the fastest growing state in Australia in TV ad revenue terms. The Brisbane market grew 2.6% to nearly $246 million in the latest six-month period. The rebound from the floods of a year ago probably helped Brisbane, as well as the solid rural and mining industries.
The other boom mining state, Western Australia, saw a fall in revenue in Perth of 0.37% to just under $152 million. But regional WA boomed, with revenue up more than 9% in the half year to just over $24.1 million. Seven dominates Perth and WA regions, with WIN (owned by Bruce Gordon) No.2 thanks to the group's solid regional network, which offsets the very weak effort of its Perth station.
Metropolitan revenues were down almost 2% to $1.38 billion, with the Sydney and Melbourne markets contracting by more than twice the overall rate (-3.35% and -2.79% respectively). Revenue in regional markets rose by 1.3% to $434 million, thanks to the strong performance in regional Queensland and South Australia. Regional NSW, the biggest market, fell 2.56% to $188.6 million.
The KPMG figures are based on figures from the networks. They show that data from research group SMI (which collects its information from media-buying agencies) was well astray when it said the metropolitan free-to-air TV ad market fell 4.1% per cent in the year to the end of June. In fact the market was down about 3.6% at $2.96 billion. Ad revenue in the regional market fell by $4.2 million in 2011-12 to $907.42 million.
While revenues remain weak, the TV networks' costs are rising. Big-ticket programs such as The Voice
, My Kitchen Rules
, The Block
, Australia's Got Talent
, Packed To the Rafters
are costing more at a time when the ad revenue is weak to declining, meaning greater pressure on profit margins, or losses. The AFL is costing Seven more and that will impact in the 2012 season, and for some of the season next year.
The real ad revenue data helps explain the profit falls reported by Ten and Seven, and the capital raisings this year by both. The data also underlines the depths of the problem the Nine Network finds itself in with revenue from the Olympics heading for a multimillion dollar shortfall (estimated in the market at $30-$40 million).
What no one has yet considered is the impact of the Olympics on TV ad spending and rates from the middle of August onwards. In past years when the Olympic or Commonwealth games have been broadcast, industry revenue has fallen sharply. All three commercial networks will be hurt, with the Games broadcaster feeling the greatest impact. That will add to the pressures on the network's finances.