Source: Michael Bodey, The Australian

THE
first major media deal since the contentious Howard Government’s media
reform packages was introduced is one step closer to completion.

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Prime Television has added two more radio stations to its growing regional radio network by spending $33 million dollars for two Sunshine Coast stations, and is planning to buy more stations in areas where Prime broadcasts as the Seven Network’s main regional affiliate.

Prime purchased Hot 91.1FM and Zinc96FM on the Sunshine Coast from the privately owned AMI Radio, run by former managing director of DMG Regional Radio Rob Gamble.

Gamble will invest the proceeds of the sale into Prime shares, and his management team will lead the enlarged radio group, which will join already has stations in Cairns, Townsville, Mackay, Rockhampton and Gladstone, and run out of the Sunshine Coast.

“They have paid a pretty big price for a couple of stations on the Sunshine Coast but we would not have got that if it was just a ‘here’s the keys’ deal,” Mr Gamble told The Australian.

“They have someone to head the network on a long-term basis, an instantaneous senior management team and they’ve bought two FM stations in a great market so they can rationalise the price on three fronts.”

Gamble has said that Prime are not interested in the Queensland radio stations put up for sale by Macquarie Media Group after purchasing Southern Cross Broadcasting, who own regional affiliates of the Ten Network.

He stated that this was due to the stations being in lower-growth markets.

Prime chief Warwick Syphers said the company had been committed for some time to expanding its Queensland radio network.

“Hot 91 and Zinc 96 in a very short time have attracted a phenomenal listening base due to the experience, commitment and talent of its staff and management,” Mr Syphers said.

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Lara Sinclair July 05, 2007, The Australian:

THE earth is moving for Australia’s media sector: the Seven network will win the TV ratings for the first time since the late 1970s, and two leading media groups are significantly increasing their power in a joint deal this week.

Advertising buyers and analysts have unanimously awarded the year to Seven, saying it has an unbeatable lead just 18 weeks into the official 40-week ratings year.

That news came as Seven yesterday revealed it had increased its stake in The West Australian’s publisher West Australian Newspapers from 15.1 per cent to 16.1 per cent.

Asked if Seven’s main owner Kerry Stokes was planning a full bid for WAN, a spokesman merely said: "We saw an opportunity in the current market to further enhance our investment."

Nine’s ratings dominance was once the cornerstone of Publishing and Broadcasting Limited’s position in the top tier of media players.

But this week’s deal to break up Southern Cross has not only re-elevated Fairfax Media to the role of a media aggressor (and given Macquarie Media some much-needed scale), it’s also raised the question of how important a television network will be in the new cross-media landscape.

Under the terms of the proposed $1.35 billion deal, Macquarie Media will buy Southern Cross, then keep the regional TV stations and sell to Fairfax its metropolitan talk radio stations and production group Southern Star for a net total of $480 million.

Southern Star makes some of our best known TV programs, such as Seven’s Deal or No Deal.

But the radio purchase prevents Fairfax from owning a TV station given the two-out-of-three rule under cross-media limits, as it will operate radio and print in city markets. Deutsche Bank backed Fairfax chief executive David Kirk’s decision to tune in to talk radio ahead of TV.

"In our view, radio was the sensible choice given the structural issues facing the metropolitan television industry, with fragmentation from online and pay television and high levels of competitor behaviour leading to cost increases," analyst Andrew Anagnostellis wrote yesterday.

That is not to take the gloss off Seven’s ratings and revenue-winning performance under chief executive David Leckie, which looks certain to put paid to a golden run at Nine that (excluding the 2000 Sydney Olympics, which advertisers leave out) lasted unbroken for more than two decades.

"Even Seven, who are the experts at clutching defeat out of the jaws of victory, can’t lose," said TV ratings analyst Peter Cox.

In prime time, this year Seven has won 37.5 per cent of the audience compared with 34.5 per cent for Nine and 27.9 per cent for Ten. Seven has won 17 of the 18 official ratings weeks, excluding Easter, and when Nine topped a week it was by one-tenth of a share point.

Media agency Mitchell & Partners estimates Nine would need to improve its average weekly audience volumes by at least 10per cent – compared with its performance to date this year – in each week that remains to beatSeven. For that to happen, Seven would also have to be the big loser. "Seven will now clearly win the ratings year although Nine won’t go down without a fight," founder Harold Mitchell said. "The tragedy is they’ve got a a lot ofgood programming in the pipeline. They needed to have it last year."

Total Advertising & Communications chief Barry O’Brien said Seven’s success in fixing its Sunday night line-up, as well as its ability to promote new content in high-rating programs, was crucial to its improvement this year.

The network’s peak night commercial audience so far this year is 1.4 points ahead of where it was last year. Nine is down by 0.6points and Ten has dropped a share point.

"If they don’t win it this year,they’ll never win it," Mr O’Brien said.

Nine would not concede the year but stopped short of publicly claiming it could still win.

The network, which prefers to calculate share based on the 6pm to midnight timeslot (a more advantageous measure to Nine but less important to advertisers), said the gap during the past four weeks was just 1.1 points and predicted Seven would drop a share point when some of its US programs – such as Desperate Housewives and Lost – finish.

Nine claimed it would win this week, following yesterday’s State of Origin rugby league match and tonight’s launch of Sea Patrol.

"We are confident that our mix of shows will hold strong appeal for our viewers and will ensure a strong lift in ratings for the network," network programming director Michael Healy said.

But MediaCom chief Annie Parsons said Nine must show program-by-program growth to get any traction going into the annual rate negotiations with media buyers. "The measure would need to be program-by-program growth and the strike rate they get with their new programs," Ms Parsons said.

Revenue figures for the six months to June are due out this month. Buyers claim Seven will have about 38 per cent of the market (up from 36.4 per cent during the same half last year), with Nine on 33 or 34 per cent (down from 36.6 per cent) and Ten on 28 or 29 per cent (up from 27 per cent).

Seven will studiously not claim the No.1 position.

According to OMD head of trading Peter Horgan, that is partly a reflection that no one will replicate Nine’s winning streak, nor will it ever mean as much as it once did.

"People recognise that to hang on to that dominant No.1 position for 20 years is going to be hard," Mr Horgan said.

"There’ll be so many more pipes into the home that need to be filled with content."

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Southern Cross Broadcasting (SBC) has released the details regarding the Macquarie Media Group (MMG) deal:

   
* Macquarie Media Group (not to be confused with Macquarie Radio, owners of 2GB) have offered $17.41 (incl. 36c special dividend) per share, for the shares in SBC that they do not already own
         
* In conjunction with the $17.41, a dividend for the period ending to June 30, 2007 of 37c a share will be payable
         
* Value of the deal – $1.37 Billion (incl. of MMG’s 13.8% share)
   
* The board of SBC have unanimously recommends the deal in the absence of a better offer and is currently under review by an independent expert to ensure it is in the best interest of SBC shareholders.
   
* A meeting will be held in October for SBC Shareholders to vote on the proposal, MMG will not be eligible to vote
   
* The deal is subject to regulatory approvals from agencies including the ACCC, ACMA and Foreign Investment Review Board
   
* The deal is subject to a number of caveats, including the completion of the sale of NWS9 to WIN Corporation
    * A break fee of 1% will be applicable under a number of conditions, including the solicitation of a competing deal.
   
* MMG and Fairfax Media (FFX) have entered into an agreement, seperate to the SBC / MMG deal, for the purchase of selected SBC assets after the completion of the MMG purchase.
         
* These assets include, but are not limited to the Metropolitan Radio Stations owned by SBC, Southern Cross Group and Satellite Music Australia
         
* MMG will retain ownership of SBC’s regional television assets

Source: MediaSpy

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by David Dale, Sydney Morning Herald

Yes, television as we know it is a dying medium. But the death throes are so gradual that we won’t see its burial in our lifetime.

This column has just come into possession of figures that let us offer a progress report on the slow shrinkage of Australia’s most massive medium.

In 2003, an average of 3.795 million people in the mainland capitals were watching Seven, Nine, Ten, ABC or SBS between 6pm and midnight every night. This year, an average of 3.506 million are watching prime time television on any night.

That decline has been masked by the battle between Seven and Nine and the apparent resurgence of the ABC. In 2003, Seven was averaging 972,000 viewers in prime time. Now it’s averaging 1.025 million, while Nine has dropped from 1.180 million to 958,000. The ABC looks to be going through boom times because of the success of Spicks and Specks and The Chaser’s War on Everything, but in reality it has dropped from 593,000 in 2003 to 566,000 now.

The table below shows the full story.

So here’s the situation: Since 2003, while the population of Australia rose by one million, the number of regular viewers of free-to-air television in the mainland capitals dropped by 289,000.

What, you are bound to ask, are those people doing instead?

Watching DVDs? Definitely. In 2003, Australians bought 30.8 million DVDs. In 2006, they bought 63.6 million.

Going to the cinema? Apparently not. In 2003, we bought 89.8 million tickets to the flicks. In 2006, we bought 83.6 million. The movies may be passing through a brief blockbuster-led recovery at the moment, but after these school hols, it’ll be back to the doldrums for the movie distributors.

Surfing the net? Definitely. The Bureau of Statistics reports that in 2003, Australia had 5.08 million active subscribers to the web (of whom less than 10 per cent had a "non-dialup” system), while in the first quarter of this year there were 6.43 million (of whom two thirds used broadband). Most Australians are now in a position to bypass the commercial stations and illegally download American TV shows before they are shown here.

Playing video games? Definitely. GfK Marketing reports that in 2003, Australians spent $751 million on games software, while in 2006 they spent $925 million (mostly PlayStation 2 stuff).

Watching more Pay TV? Yes, but not enough to counterbalance the losses of free TV. In 2003, an average of 410,000 people in the mainland capitals watched subscription TV in prime time, while now, Pay’s average audience is 672,000.

Reading more books? Hard to tell. The latest available figure on total book sales in Australia, provided by the Bureau of Statistics, was 79.9 million volumes in the financial year 2003-2004. Having nothing more recent to compare, we must leave this question for a future column. It’s nice to live in hope.

Average audience in the mainland capitals, 6pm to midnight

Station ……     2003 …..     2004 …….     2005 …….     2006 …….     2007*

ABC ……..     593,694 ..     636,971 ..     586,916 ..     563,251 …     566,203

SBS ……..     172,095 ..     172,593 ..     226,957 ..     196,857 …     196,309

Seven …..     971,793 .       934,046 .     1,007,591 .     1,018,416 .     1,025,021

Nine …..       1,179,758 .   1,126,743 .     1,088,735 .     1,068,199 .    957,999

Ten ………     877,796 ..     893,997 ..     811,727 …     815,807 …     760,531

All FTA .       3,795,137 .    3,764,350 .    3,721,925 .     3,662,531 .   3,506,062

All Pay ….     409,524 ..     416,963 ..     509,929 ..     592,122 …       671,922

* 2007 averages are over weeks 7 to 24. Others are over weeks 7-48.

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Newcastle and the Hunter Valley (Australia) have an interesting media and advertising mix. A population of approximately 1/2 million people is serviced by:

3 commercial television stations
2 non-commercial television stations
4 commercial radio stations
several community radio stations with some commercial aspects
1 local daily newspaper
numerous free weekly newspapers
1 monthly lifestyle magazine

…..and at least 26 advertising, design, media placement or production agencies.

It’s a busy little market.

Media Hunter is designed to keep you up-to-date on the marketing options in the region. It will also endeavour to provide marketing and advertising strategies for businesses looking to make the most of their marketing budgets and deliver effective advertising.

While much of the information will be mostly relevant to this region, the marketing and advertising advice provided could be applied almost anywhere. It is the result of years of marketing experience in small business, media representation and ownership of Newcastle-based Sticky Advertising.

So, please enjoy…Media Hunter.

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