The purchase of Ten Network by CBS is great news for advertisers, sporting bodies and hopefully Aussie TV viewers.
Here’s the official press release in case you were too focused on the political manoeuvrings of Kings Landing yesterday.
Let’s look at the potential impacts in the short and long term of this deal;
Firstly, this news caught everyone off guard. CBS had previously looked at Ten and walked away effectively saying they were too small for them to bother with. Were they just faking?
Whatever the scenario, this news will have Seven West and Nine Entertainment re-evaluating their positions – or at least it should.
People don’t tend to like change, but this news is probably a shot in the arm for the staff at Ten who have been living with the negative commentary about their prospects for some time.
Suddenly they must feel like their big brother has shown up in the playground just as they were getting picked on by the local bullies.
The cultural impact on the business shouldn’t be overlooked; a Murdoch/Gordon partnership may have felt like an obvious outcome and leading to more of the same. CBS should give the place a renewed energy.
We can only speculate about the impact this will have on Ten’s programming but with CBS’s portfolio we’d expect to see a broadening of their traditional 18-39 year old focus to include older demographics. That means more competition for Seven & Nine, which is good news for advertisers.
It also shakes up the streaming services. Netflix and Stan had comfortably carved up most of the paid market between them, this creates a new threat with the launch of CBS All Access. It also puts additional pressure on Foxtel as they play catch up with their Foxtel Now service. The challenge for CBS is how they manager their portfolio between platforms and how they look to monetise All Access in this market.
Where things really start to get interesting is when we look at the longer-term implications on content. Australian content quotas are unlikely to change anytime soon so Ten will still need to produce local shows. However, what happens to the production levels of that content when they can tap into CBS’s pockets and Hollywood relationships? If you have to make Aussie content, why not make it with global potential?
Then there’s the sports rights market. Only a couple of weeks ago the announcement of a $744m loss to Seven West led to questioning about the value of major sporting properties to drive advertising revenues. An aggressive, well-funded Ten may change the market for sport when the next round of renewals come up for the NRL in 2020 and AFL in 2022.
There’s still a lot of regulatory and shareholder measures to take place before this is a done deal, but where it was looking like Ten’s best years may have been behind it, it now has the potential to get back in the game.
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