Anyone investing in
free to air television in Australia today is asking for trouble. Apart from the
Seven Network, the sector has been a disaster for investors. This is
fundamentally because the people getting paid insane amounts to run these
networks are not in touch with the subtle changes that are taking place in
society.
At its core, free
to air TV is no different from a whole host of industries that have been
adversely impacted by technology – newspapers, book stores, stockbroking, the
music industry, movie rentals etc.
The Australian free
to air industry introduced digital television (with far more channels) about six
years ago and promoted this heavily as an alternative to pay television. The idea
seemed reasonable at the time, but what has been delivered?
The digital
channels today largely consist of very cheap (and often tasteless) programming.
Much of this is sourced from the UK, a country that today makes some truly
reprehensible television. What is it with the UK these days? Is their
television just a sad reflection of a society that is increasingly losing its
way? I don’t know, but many of these programs are so bad that they are
basically unwatchable. Even if you had nothing to do and were bored out of your
mind, you wouldn’t watch these shows.
Most of the shows I’m
talking about would have had no chance of getting on air in Australia prior to
the introduction of digital television. They would have been rightly regarded
as merde (to borrow a French term).
But in the rush for “content”, network management has taken the view that merde will do.
The Nine and Ten
networks do not even have enough quality programming for their main channel,
let alone digital channels. And this is why both networks are in a financially parlous
state. It is also why you will see the same shows repeated ad nauseum (and this is supposed to be about more choice!).
Nine’s fall from
grace has been spectacular. A once leading network with plenty of quality programming
is now a basket case because of mismanagement on a grand scale and an inability
to discern viewing trends. If Nine’s management is worth what they are paid,
I’m a monkey’s uncle.
Ten had a brief
period in the mid-1990s to early 2000s where it employed a successful strategy
of targeting a younger demographic with very popular shows such as Seinfeld (one my favourite shows ever), The Simpsons, Australian Idol and The Panel. However, when these shows either
ended or people simply got sick of them, Ten had nothing to replace them with.
And so began the slide into irrelevance and financial turmoil.
Then we have the
ABC, which runs a national news network based on public service principles from
the 1970s. Take the imaginatively titled The
Business show on 24 with Ticky Fullarton. This show is not screened on
Fridays – why? Does no business news happen on Fridays? The show also has a
summer break for over two months. How can this be a serious news network?
Counter-intuitive
as it may seem, the proliferation of very low quality digital channels is
actually an enormous boost for alternative platforms (the internet and pay
television). This is because it insults the intelligence of many viewers and also
naively assumes that quantity is better than quality (which is a patently false
assumption).
Many friends and
family members tell me that they don’t watch any free to air television at all.
Not one minute of it. If so many in my immediate circle don’t watch it, there must
be many more in that category too.
Advertising on
television is a very “hit and miss” affair, 99.9% of people seeing your
advertisement will not go out and buy the product. I don’t think I have ever
bought a product or service that I saw advertised on television simply because
I saw it advertised on television.
How many people
actually watch ads these days anyway? As soon as an ad break occurs, most
people change the channel, go and do something else or watch recorded programs
where they can screen out advertisements. Where do you go when you want to find
a product or service? The internet. Which medium targets advertising
specifically to your interests? The internet.
Television’s day of
reckoning is coming. It will not completely avoid the fate of newspapers,
recorded music and book stores.
Personally, I have
traded Seven Group Holdings on many occasions (I’ve never made a loss trading
it), but I wouldn’t touch Nine or Ten with a barge pole, unless I decide to
short them at some stage.
