Is this the end for Ten?

Free-to-air broadcaster's market share slumps

Mike King

Mike King is a Fool.com.au Investment Analyst and Writer. He caught the investing bug more than a decade ago, at a time when the U.S. had invaded Iraq and fear reigned in the markets. His initial success as the markets took off encouraged his passion and thirst for knowledge. With 13 years behind him at one of Australia's largest domestic banks, Mike's passion for stocks led him to join a boutique funds management firm, where he stayed for four years. A seven-year stint in equity research at one of the largest investment banks in the world followed that, giving Mike a thirst to pursue his passion further. Mike holds a Diploma in Applied Finance and Investment and a Graduate Certificate in Financial Planning. His passion is to help retail investors invest better, and that passion was one of his primary reasons for joining The Motley Fool Australia in late 2011. Mike has written thousands of articles since joining, including for Fairfax Media, Yahoo!7, Ninemsn and has also appeared on ABC's The Business. You can see all of Mikes' holdings here

Published May 16, 2013 10:58 am AEST

In an ominous sign for Ten Network Holdings (ASX: TEN), Nine Entertainment posted a 38.5% share of advertising on free-to-air television in April, up 5.5% over the previous year.

The Ten Network fell further behind, losing 5.1% to a 19.7% share of the ad market. The Seven West Media (ASX: SWM) owned Seven maintained its top spot of 41.8%, down slightly by 0.4%. Nine's performance was boosted by reality TV shows The Voice and The Block. Ten has been losing market share for some time now, although the broadcaster did manage a 25.1% market share in March, a rise from 23.5% in February, and 20.2% in January.

Ten's current regional affiliate, Southern Cross Media (ASX: SXL) has been considering defecting to Nine, likely due to Ten's recent programming and market share performance. Ten is reported to still be in negotiations with Southern Cross, but the outcome is far from certain.

As part of its planned comeback, Ten has reportedly lodged a $500 million bid to wrest the Cricket Australia contract away from incumbent Nine. The Age reports that the offer includes $400 million for all forms of cricket currently shown on Nine, plus a further $100 million for the Big Bash League, which is currently broadcast only through pay TV provider, Foxtel. The Nine Network still has 'last rights' to match Ten's offer, but has been reported to pay just $45 million per year over the past seven years to Cricket Australia.

Cricket currently attracts around $60 million annually in advertising on free-to-air television, suggesting Ten's bid will be loss making, unless it can generate higher ad revenues. However, Ten is probably more interested in gaining market share, and may be happy to concede revenues in exchange for audience.

Foolish takeaway

Should Nine come up with a matching bid for the Cricket Australia contract, Ten's slide in market share appears set to continue. While Ten recently grabbed the rights to the 2014 Winter Olympics, it doesn't have the same audience appeal as the cricket.

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