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News Analysis 3 Jun 2020 - 3 min read

Agencies see the end of the two-horse TV race; Ten prepares for "trading shake-up" in 2021

By Josh McDonnell - Senior Writer

PHD Managing Director Lucy Formosa Morgan says it’s a much closer field this year,  with Ten’s numbers being far more competitive, particularly against the younger demos but also in the key buying demo of 25-54. 

The ratings turnaround that started at Network 10 last October has now seen it move into the number two spot in key demographics as agencies call the end of the "two-horse TV race" between Seven and Nine. 

What you need to know:

  • Network 10 is #2 calendar year to date in prime time (6pm to 10.30pm) in under 50s, 16 to 39s and 18 to 49s
  • The last time Network 10 was #2 in prime time in key demographics was 2011
  • Agencies have praised 10's efforts and the end of the Seven-Nine duopoly, delivering greater efficiencies across all three networks.
  • Carat's Craig Cooper says each of the three major networks have been forced to trade harder than ever as competition intensifies
  • But media buyers have warned 10 not to focus too heavily on the #2 position, instead remain consistent for the second half as major sporting codes return for Seven and Nine.


An important milestone

From late last year Network 10 has pushed a message of growth and a return to form with consistent programming, an overhauled sales team and the integration of owner ViacomCBS's extended content like MTV and Nickelodeon.

Network 10 is now in market touting a newly claimed #2 position in some of TV's key viewing demographics as shows like MasterChef, Have You Been Paying Attention and I'm A Celebrity have drawn audiences back to the network.

Sales boss Rod Prosser says 10 is now #2 for the calendar year to date in prime time (6pm to 10.30pm) in under 50s, 16 to 39s and 18 to 49s. The last time Network 10 was #2 in prime time in key demographics was 2011, while it was 2009 when 10's share in 25 to 54s was tracking this high.

According to OzTam figures, year-to-date commercial TV viewing is up just 0.2% while Network 10's has posted audience growth of 21%.

"TV is in a healthy place full stop," Prosser told Mi3. "It's really important for the buyers to have three really competitive networks. I'm a firm believer that our competition doesn't just sit with the free-to-air networks but it's any player that takes attention away from our viewers."

"We have to be competitive, hold up a consistent audience and produce good content because the reality is, the buyers are always telling us they need this competitive race or it becomes a duopoly and that's not good for anyone."

Prosser has previously expressed frustration around commercial share deals to Mi3, claiming the network deserved more ad dollars but was restricted by legacy contracts in place with other networks.

He says while some of this has begun to move, not every agency group has been able to respond to the TV market shifts but Prosser has pegged 2021 as an opportunity for a "major shake-up" in how TV is traded across the major free-to-air players.

"Next year we will see a big shift in the way TV is bought and that includes some of those legacy deals that agencies are constrained by at the moment, particularly now as audiences are shifting towards us," Prosser says. "Everyone recognises that the model is broken and we need to trade differently and for us 2021 will be that year."


More horses in the race

While some agency heads cautioned 10 not to tout the second place achievement too heavily, many have expressed the importance of having 10 "back in the game".

PHD Managing Director Lucy Formosa Morgan says it’s a much closer field this year,  with Ten’s numbers being far more competitive, particularly against the younger demos but also in the key buying demo of 25-54. 

"A competitive network set is great for the market. It means programming is strong and reduces the audience churn that we’ve seen in previous years.  From a client and agency’s perspective, it also means all three networks are a viable and potential option if you’re targeting the under 50s," she says.

Carat chief investment officer Craig Cooper told Mi3 there was a clear value for clients in having a more competitive Network 10 in the overall mix.

He says clients now have access to greater efficiencies, as well as reach, with 10 forcing both Nine and Seven to "trade harder" than they have in a long time.

"Would you call 10 the second network? Yes of course," says Cooper.  "But I'm not sure it's something I would be talking about. Being #1 is always what the networks should be aiming for and I hope Ten does have that goal because that's going to push everyone along."

Cooper says the network's achievements have created a less complacent TV environment that will only become more valuable for clients as the industry comes out of COVID.

"COVID has given us so many challenges but as we look to the recovery stages, it's paramount that we are delivering effective outputs for our clients and efficiency is one of the leavers that can do this," he says. "If you can utilise all three networks to get the best position then that is a win-win.

"Both Seven and Nine have had their complacent moments in the past because the money was rolling in the door - that's not the case anymore. We've certainly seen in the last three months that each of the networks are 100% driven by winning whatever briefs are out there."

Cooper says the efficiencies around a two-network buy have "long been a challenge" for clients.

He says in the past agencies have been able to get their reach targets with a two network deal but the ability to use all three opens up greater options for marketers who, following overall audience growth during the pandemic, will be looking to further utilise TV.

"That then allows you to open up further reach potential for clients. The cost-prohibitive nature of having two players has disappeared and for clients, that's a big benefit because they don't have to exclude one whole network."

Founder of indie shop Hyland, Virginia Hyland, says the benefit of competition is that the television networks have moved away from the traditional way of doing business.

She says they are offering "wholist content, paid media value and partnerships" so that marketers can engage more deeply with audiences.

"The networks have created flexible partnerships that encompass great rates, bonus opportunities, content partnerships and data share capabilities," Hyland says. "This means that our clients are able to develop richer connections with quality audiences at scale."

"The added bonus is that audience eyeballs across network properties, both online and offline, have significantly increased during COVID-19 lockdown. Our clients are experiencing greater value and greater scale."


Sport off the sidelines

"We have all been eager for sport to come back as viewers, but probably not as much as Seven and Nine as commercial networks. Will the return of sport slow Tens trajectory? Too early to tell," Initiative's Simon Reid says.

"What is evident is that the current climate has drawn lapsed viewers back to FTA and formed new screen consumption habits so the remainder of the year looks positive from a YOY audience POV for all 3 networks."

While 10 makes strides in its primetime content, it now has to contend elsewhere with the return of the NRL on Nine and the rapidly approaching comeback of the AFL on Seven.

"I’m sure live sport coming back to the other networks will no doubt have an impact on Ten moving forward but they’re got some strong shows moving into the back end of their season (like MasterChef) slated for H2, so I don’t see them coming off much," Formosa Morgan says.

She isn't alone.  Cooper says while there may be an early shift in audiences returning to their respective codes, the overall impact of having missed out on the early stages of the season will still hurt Nine and Seven in a period of the year when 10 is at its strongest.

"What Ten has done this year is they've kept that consistency in programming and that's going to help them a lot in the second half," Cooper says. "This has also been where Ten has been the strongest and that is primarily due to the other networks relying too heavily on sport."

Prosser says the network isn't overly concerned by the return, noting that the network still managed seven percentage point growth in 24-54 audience share last week, consistent with the two weeks prior.

He says while AFL is yet to return and the network remains cognisant of the potential impact it will have on the wider TV market, Prosser is confident in being able to "hold its own" in the primetime position.

"A network has to be more than just sport. Just a few games of footy coming back won't topple the level of audience growth that we've had and the momentum behind us," he says. "We can no longer accept that deals are done on the basis of access to sport, that is my frustration."

"We've got to be so much more than that and I say this keeping our own sporting assets in mind as well. Viewers are definitely being curious and watching different types of entertainment as a result of a void in sport and it's for that reason I don't think its return will have a major impact."

Hyland labelled sport an "ever-changing world" in the modern TV environment, saying it was legacy thinking that Cricket and Football are the only key pillars of programming.

She says if you consider viewership and attendance of the top Australian sports there is a breadth of “sports creep” that emerges – especially for the Under 30 audience.

"Basketball, Soccer, Tennis, Netball, Car Racing, AFL and swimming have started to erode the share of the traditional male played sports," Hyland says.

"This 'sport creep' means that to stay relevant to younger audiences and to engage female audiences Ten has the opportunity to reconsider how they appeal to a younger audience."

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Josh McDonnell

Senior Writer

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