Same-sex vote a plus for TV ads

ADVERTISING from the same-sex marriage debate and Queensland election has breathed temporary life back into the TV advertising market but the headwinds for the industry haven’t disappeared, a media analyst has warned.

Morningstar analyst Brian Han said free-to-air ad revenue increased across the board in the December half — thanks to the contribution of several one-off events.

He expects the current June half to be similar, with the Winter Olympics and Commonwealth Games to give broadcasters an earnings lift.

But he said ongoing cost pressures from digital media competition such as Netflix and Stan and new shows would continue to hurt the industry.

“I think generally it will still be a pretty challenging set of results for everybody,” Mr Han said ahead of February’s earning season.

Nine Entertainment and Seven West Media are both slated to release financial results in February, while Ten Network ended its near-two decade spell as a publicly listed company last year.

In November, Seven announced plans to make $25 million worth of job cuts over 12 months in response to falling ad revenues and a highly competitive TV market.

In August, Nine Entertainment said the total TV advertising market had declined 2.7 per cent during 2016/17.

Mr Han said a focus on premium content across the board would be crucial in the 2018 financial year to combat demand for streaming services such as Netflix and Stan.

“They have to do it,” he said. “To just sit still and do what you have been doing historically for the past 30 years — the consequences are unthinkable.”

Mr Han expected the battle for ratings to be “as intense as ever” this year, with the Ten Network revitalised after the takeover by US media giant CBS.