Ten Network's gains in audience share and new partnership with sales house Multi Channel Network have led to a strong 7.5% increase in television revenue in the past financial year.
Ten revealed its revenue has grown to $676.4 million in the 12 months to 31 August 2016. EBITDA returned to positive territory with 138% to $4.5 million, a big improvement on the $12 million loss last year.
Importantly, net debt was reduced by $77 million and net loss attributable to members more than halved to $156.8 million from $312.2 million last year.
This is an impressive result in an advertising market that declined by 2.9% in the same period and in context of rival commercial TV networks reporting revenue declines. Nine Entertainment was down 6% to $1.29 billion and Seven West Media was down 2.8% to $1.7 billion.
A short advertising market
Despite this, TEN chief executive Paul Anderson is under no illusion about how challenging the FTA TV market is and remains cautious about the outlook for FY17.
"The advertising market remains extremely short in terms of forward bookings, something I'm sure you've heard before," he says. "In regards to our programming, we are going to continue to invest in our content and distribution channels to maintain our revenue and audience momentum.
"We've demonstrated that discipline in strategic investments in prime time content are necessary to continue to improve our performance."
When probed about contracting ad market bookings, Anderson adds: "We've continued to grow our absolute dollars and share every month and that has continued into September. But there's no doubt the market is short and bookings are short.
"We have no visibility over what we think the market will do for the next six or 12 months. Our sincere hope is that post the election and Olympics we get back to some normality but clearly September hasn't shown that."
Television costs have been trimmed to 5.1% from 5.5% a year ago, while the television broadcasting licence fee cost the network $125.3 million.
This year's results don't include costs associated with new show Australian Survivor, but Anderson says Ten's shows are less costly to produce than shows on rival networks.
"Our television costs are expected to increase in mid-single digits in the 2017 financial year. We currently have a project under way to review all costs across the company with the aim of minimising this increase," Anderson says.
"Our content costs per hour are lower than costs of similar shows on other networks. We've got a very good track record of managing that and we've got further plans because the cost of domestic content cannot continue out of whack with general revenue conditions."
Audience share gains
What has underpinned Ten's success is strong gains in audience share with its commercial TV audience up to 29.5% in the key 25 to 54s demographic - Ten's best share since 2012. Ten's main channel increased its commercial audience share by 1.1%.
Ten also prides itself on having the highest social media talkability with a 10% gain to 12.7 million followers across all of its social channels.
These gains are down to a strong programming slate, led by solid audience gains in the KFC Big Bash League, I'm A Celebrity...Get Me Out of Here, The Bachelorette, Family Feud and Gogglebox.
"In July this year, TEN achieved its 17th consecutive month of year-on-year revenue and revenue share growth," TEN chief executive Paul Anderson says.
"Our content strategy is working, with TEN increasing its audiences on television and across online and social media platforms. We continue to invest in differentiated content in a disciplined manner and we now have a domestic content schedule across the entire year, bookended by the KFC Big Bash League."
Ten has also grown it's AVOD Tenplay, which had a 32% increase in unique video visitors and a 23% increase in segment views. Downloads grew 24% to 2.77 million, highlighting the growing importance of catch up TV.
In May 2016, Ten signed a new five year affiliation agreement with WIN Network and downsized its agreement with Southern Cross Media to supply programming in regional Australia.
These results don't indicate how the changing alliance will affect Ten's national audience share but they will add a significant rise in affiliation fees as WIN has demanded a larger slice of advertising revenue.
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