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Australia

After a series of challenges, Seven has the opportunity for a fresh start

Seven tried to sell the departure of Tim Worner on Friday as an orderly matter of "leadership succession", but it's a succession that was forced upon it by some fundamental issues in the business.

"I think Seven's got some programming challenges, and they've got rating problems as we speak," said media analyst Steve Allen.

Outgoing Seven West Media chief executive Tim Worner, left, and incoming head James Warburton.

Outgoing Seven West Media chief executive Tim Worner, left, and incoming head James Warburton. Credit:Louis Douvis, Louise Kennerley

"Tim's resignation and James Warburton coming in gives them the opportunity for a new start. It won't happen immediately but it gives them a chance for 2020."

One industry observer noted that Seven "lacks any real digital strategy – they have been hamstrung by the Yahoo7 partnership – and failed to evolve."

While the network's website 7news.com.au was a good move, it had come "a decade too late," the observer noted. And on its catch-up service 7Plus, "the only show that works for them is Home and Away", which typically draws around 100,000 online viewers per episode over the 28-day window in which OzTam collects data.

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This last point is perhaps what Worner was hinting at when he said Seven "is a very different company now from the one I joined 25 years ago".

He added that "it's changed faster than ever in these last few years", and one of the key ways in which it has changed is in the increasing importance of non-broadcast platforms in reaching audiences, and selling advertising.

Nine, the owner of this masthead, has had outstanding success in this space, not only but most spectacularly with Married at First Sight. The reality show attracted more than 400,000 BVOD (broadcast video on demand, or catch-up) viewers for more than a dozen episodes earlier this year. Love Island has similarly proven a major drawcard to the platform, which is key to the networks' attempts to woo younger viewers who rarely tune in to linear broadcast TV.

Nine is not alone in having success in this space: SBS On Demand has punched well above its weight, and Foxtel's streaming platform scored massive numbers with Game of Thrones. But while Seven was one of the earliest entrants into the space with its Plus7 service (now 7Plus), the issues, Allen said, "have been about execution".

Tim Worner at the Seven 2019 upfronts late last year.

Tim Worner at the Seven 2019 upfronts late last year.Credit:Louise Kennerley

"In my view the biggest problem is programming," Mr Allen said. "They have a lot of programs that have been around for five or 10 years that just aren't performing. Mostly where they've gone into new formats they've been close to failures. That says they've got to get back to fundamentals."

Seven won 2018 with a 28.1 per cent share of the three-network (Seven, Nine, 10) split on its main channel, and 41.2 per cent across all its channels. With Nine on 35.5 per cent and 10 on 23.3 per cent, it was a commanding lead of 5.7 per cent.

But in the year to date, Nine leads by a whisker in the five metro capitals, with a 38.9 per cent network share to Seven's 38.8. Seven's numbers are bolstered too by the fact the network has one more digital multichannel than Nine, and two more than 10.

Underperforming reality programs like My Kitchen Rules are a challenge for Seven.

Underperforming reality programs like My Kitchen Rules are a challenge for Seven.

Seven's audience skews older than its rivals too, and is propped up by an over-performance in Perth and Adelaide.

Combined with underperforming key reality formats – MKR, Australia's Got Talent and The Switch – it would be easy to conclude that the network is not firing on all cylinders.

Such things are cyclical, of course, and Seven could be one hit show – or one dud on Nine – from turning the year around. But right now, it has taken the strongest action it could to signal to the market that it knows there is a problem and it intends to fix it.

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