Mediaweek spoke with Tim Worner after Seven West Media’s full-year results were announced this week. The interview also screened on the Mediaweek TV show on Sky News Business. Catch the show every Thursday at 2.30pm or the repeats every Sunday on Foxtel channel 602.
“We have invested in some pretty impressive live sporting events including the Olympics and the AFL. We think that is the right thing to do for the long-term future.” – Tim Worner
Seven has delivered a good result, but with a few warning signs.
No question that the result is strong. If you stack the result up against the other television networks it looks very good. The outlook is not where we want it to be, but we have invested in some pretty impressive live sporting events including the Olympics and the AFL. We think that is the right thing to do for the long-term future.
I wouldn’t call the forecast a warning sign. We are in the midst of change – I have been at Seven for 20 years and the business has changed more in the last two years than it did in the preceding 18 years. We are undertaking the transformation we had to have. Already we are seeing new revenue streams growing strongly. That is the shape of our future, with live sport the foundation until 2020.
Is the Olympics a loss leader?
“I am not calling 2016 yet, but it will be very hard for us to lose it.”
The term loss leader is not accurate to describe investments in big packages of rights. With the landscape changing so dramatically, you almost have to have those foundations to underpin the future. This is the new operating model for Seven West Media. The last time we had an Olympics we only had one channel and one way to monetise that investment. This time we have three channels live 24/7, there will be a further 40 streams and partnerships with Google, Facebook and Twitter. We will use the Olympics as launch platform for new shows, many of which we have created and therefore own and control. We will also launch new digital products.
Do we think it is worth it? We absolutely do.
Are you on track to remain #1 until at least 2020?
You know I don’t like to do cartwheels in the carpark too early or a victory lap at halftime. We have had a very strong year and we are leading in every key demographic. Our audience composition has changed quite dramatically in 2016 and we probably have the best share of the key demos we have had in five years or more. I am not calling 2016 yet, but it will be very hard for us to lose it. Beyond this year is really what our focus is about. We are already planning what we will do in late 2017 through until April in 2018.
“We are in the very early stages of discussions with Verizon. Under the terms of our agreement we do have options and they all represent good opportunities for Seven West Media.”
Any thoughts about Network Ten’s improving ad share?
You know we don’t spend very much time looking over our shoulder. We focus on what we can control and what we have influence on. I certainly acknowledge Ten is stronger than it was a few years ago.
Heavily in digital?
We could see some of that money coming back [to TV/magazines]. We have seen that in the UK and to some extent in the US. People like Sir Martin Sorrell [WPP] and Peter Horgan [OMD] are conceding the swing away from traditional media has been overdone.
Was the Yahoo7 result disappointing given its bigger audiences?
I don’t think so. The part of the result we like to focus on is the catch-up platform PLUS7. By far and away it is the #1 catch-up platform in the country.
How likely are you to split from Yahoo?
It is not the no-brainer that people looking at it from some distance might think. We recognise what Yahoo brings to what has been a very successful partnership. We are in the very early stages of discussions with Verizon. Under the terms of our agreement we do have options and they all represent good opportunities for Seven West Media.
How much difference will the Sunday Times acquisition make?
There are advantages in terms of the scale that will bring. We will get extra other printing work too.
Will the Sunday Times lose advertisers if it leaves the News Corp Sunday newspaper network?
The Sunday newspaper network is an attraction for some of our advertising partners in West Australia and that option will not disappear because of any change of control.
Are the changes you are forecasting at Pacific more than some new digital brands?
“We have finalised a JV with a UK drama producer and the big hit titles they make will be well- known to many Australians.”
Pacific’s numbers are disappointing, but the velocity of change at Pacific is greater than at any of our other businesses. The business is developing new digital products and the digital revenues are growing quickly. We are examining the business title by title with regard to profitability. There is a plan to change the result in quite a material way for FY17.
How has Clive Dickens’ arrival changed digital thinking?
It hasn’t only been Clive, but he has certainly been the catalyst for the changes. There is not one part of our business that is the digital department. Our whole company is digital and everyone working there has realised that and embraced it.
New revenue streams
Seven is having considerable success expanding its production business to supply content to third parties in Australia and the rest of the world. Mediaweek asked Worner if the group had plans to invest further to fast-track that growth.
We are going to look at both more investment and acquisitions. We have finalised a JV with a UK drama producer and the big hit titles they make will be well- known to many Australians. That takes us into an area where we currently aren’t operating in the UK. We are also establishing a production company in New Zealand which will happen very quickly. We are also looking at new investment in new territories plus additional ventures in the US and UK.
This is an area where we are playing to our strengths in terms of very aggressively executing our plans to expand our global footprint.