Revenue decline during the period was exacerbated by social-distancing restrictions hitting the travel and automotive industries. Both sectors traditionally spend significant sums on advertising.
The temporary suspension of the AFL and NRL competitions- which typically generate large amounts of advertising dollars – also contributed to the revenue pinch and has forced media companies to undertake cost-cutting measures.
Nine has renegotiated its major sports rights deals and accelerated a cost-cutting program in its television division. Seven, which is trying to cut its $541.5 million debt pile, has similarly renegotiated sports rights and sold assets including Pacific Magazines, its WA headquarters and the overseas parts of Seven Studios. It has also reduced staff hours and axed jobs. Ten has similarly asked staff to work reduced hours and cut jobs.
While the last few months have been difficult, the market is showing slow signs of recovery. June data shows a 29 per cent fall in revenue among the three broadcasters to $195 million, an indication that the rate of decline is slowing. Nine booked about $74 million in advertising for June, giving it the largest share of commercial revenue (37.9 per cent). Seven made about $72 million (36.9 per cent share of the market) while Ten generated $49 million (25.2 per cent share) in revenue.
Seven’s chief revenue officer Kurt Burnette said he was pleased to see the rate of decline improving. “We are seeing further signs of that continual improvement into the current quarter. This clearly shows the resilience and effectiveness of TV and BVOD as key mediums advertisers return to for their messages,” Mr Burnette said.
Nine’s chief sales officer Michael Stephenson said the market had weathered the worst of the pandemic. “In the absence of State of Origin and NRL we’re delighted with another strong share result. Number one in June, number one for the quarter, number one for the half and number one for the full financial year,” he said.
“Working closely with our partners, we have seen an incredible resilience over the last few months as brands looked to TV and its platforms to deliver important messages at mass,” a Ten spokeswoman said. “While the market continues to be short, we are starting to see good signs of a recovery.”
Nine told the market two weeks ago that it expected a 1-8 per cent decline in underlying earnings for the full financial year because of the pandemic. Other media companies are yet to update market guidance.