You are probably thinking why would you want to?
When advertising revenues are migrating online, and structural changes are occurring in the industry, you probably think investors should be avoiding the industry.
We have written several articles on the challenges facing Australia's three commercial free-to-air networks, including the pool of advertising revenues shrinking and consumers choosing other activities, rather than plonking down on the couch in the evening to watch free-to-air programming.
But the networks may well be facing up to those challenges, by providing more digital content, free digital backlogs of their programs, websites, and integrating their digital and free-to-air offerings, so users can follow the shows they are watching, with online websites, competitions, blogs, take a look behind the scenes and special previews.
Seven West Media Ltd (ASX: SWM) appears to be at the forefront of this movement, with its partnership with Yahoo!, and commanding market share of the advertising pool. The company which owns the Seven Network also announced today that it had won the Australian broadcasting rights for the Olympics up until 2024. That includes the Summer 2016 games in Rio de Janeiro, the winter games in China in 2018, the Tokyo Olympics in 2020. The deal also includes an option for Seven to cover the 2022 winter games and the 2024 Olympics.
Media reports suggest Seven paid $200 million for the package, much lower than the International Olympic Committee (IOC) had been hoping for, after Nine Entertainment (ASX: NEC) and Ten Network Holdings (ASX: TEN) dropped out of the bidding.
Seven is expected to broadcast the games entirely on its own platforms, such as through its online sites, digital channels and online sites, rather than sell off partial rights to other broadcasters such as Foxtel, SBS or Telstra Corporation Ltd (ASX: TLS).
Trading on a prospective P/E ratio of under 10, and paying a 5.8% fully franked dividend, Seven West is one company to watch.
