Ten + One = Eleven

The multichannel picture is nearly complete with the Ten Network joining the ABC and Seven Network in announcing and beginning to implement their digital strategy ahead of the analogue switch-off in 2013. Ten’s plan is Eleven a new digital-only SD channel to complement Ten’s primary channel and their soon-to-be HD only channel, One HD.

Ten Network Holdings have described the new channel (to launch in early 2011) as one that will “broadcast bold, fun and entertaining content targeting the 13-29 demographic. Its format and offering will be highly engaging and fresh, creating a community that advertisers can interact with on a daily basis in a deep and creative manner.”

The program will draw on the vast catalogue of CBS Studios International (though not exclusively) to fill airtime on the station. This will be executed through a new JV between Network Ten/CBS Studios International called ElevenCo Pty Ltd, where Ten will hold a 66.66% stake and CBS will hold a 33.33% stake. This JV is subject to FIRB approval. As part of the JV announcement CBS has agreed to extend its existing long-term output deal with Network Ten. This follows a similar JV entered into by CBS with India’s Reliance earlier in the year.

The biggest change for current Ten viewers will be the shake up that will occur on the main channel from early next year. The Simpsons at 6:00pm and Neighbours at 6:30pm are out of the schedule in favour of another hour of news. The Simpsons and Neighbours from 2011 will be seen instead exclusively on Eleven. This strategy is similar to what Ten employed with OneHD by placing medium to high value product such as Formula 1 racing and MotoGP as first-run and live on OneHD and then a delayed late night replay on Ten. No doubt Ten would like to run more high value sporting content only on OneHD but is prevented from doing such in some instances due to the Anti-siphoning legislation. The legislation looks unlikely to change in the near future due to the current political limbo that the Commonwealth is facing.

Some quarters of the media have criticised Ten for shifting Neighbours to Eleven as a sign that Neighbours is no longer a high value asset. Whilst not pulling as large figures as it has over its 25 year lifespan the show still generates solid ratings with a loyal base as with The Simpsons. Ten will be hoping these new marquee shows will not only boost viewership on Eleven but also give these programs a new lease on life. Ten can have some hope this strategic move will come to fruition as seen by strong ratings for Formula 1 on OneHD which have this year often outrated the replay later on Ten.

In terms of Ten’s replacements between 6pm and 7pm, Ten has announced at 6pm there will be a new half-hour national bulletin “targeting viewers seeking a smarter, more informed, considered and insightful approach to the stories, issues, events and news stories of the day.” Then at 6:30pm “TEN will present a half-hour locally-presented and produced news service in all markets, focussing on the key issues in each State, whilst continuing to break news and further develop the leading national and international news stories of the day.”

Ten can no longer be criticised as taking news seriously. They will invest some $20 million and hire up to 100 new staff to implement their new news strategy along with launching Eleven. Ten will now have news bulletins at 6am, 9am, between 5pm-7pm, the 7pm Project and the Late News with Toyota Sports Tonight. Given that around 3 million Australians watched some form of election coverage last Saturday night there is a clear interest in news within the marketplace that Ten will be hoping to capture. The test will be whether the news content can be fresh enough over two-half hours each night to engage the viewer and therefore become a pattern of behaviour, such as 6pm bulletins for viewers of Seven and Nine are .

Ten has certainly puts its front foot forward in developing a fresh strategy and new brands across its broadcast portfolio. Unlike Seven’s 7Two and 7Mate channels and Nine’s Go there will be almost no content cross-over between Ten’s main channel, OneHD and Eleven (keeping in mind that some sporting content is seen on One and Ten due to Anti-siphoning legislation). The channels therefore are promoting a unique target demographic for advertisers and fresh product offering for viewers.

Ten has identified an opportunity gap within the market and will be hoping their new strategy will strike gold! If not, as Crikey noted this could be disastrous for Ten’s CEO Grant Buckley and Chairman Nick Falloon. With a new brand in Eleven (the logo looks however remarkably similar to Britain’s Channel 4 logo) and a mix of new Australian content and overseas buy-ins only time will tell whether the channel can generate solid ratings in the 74% of households that now have digital-TV.

The strategy Ten has adopted is brave but distinctive and in a cluttered market including challenges from other mulitchannels, pay-TV and online, this is what is required.

For the record Ten Network shares ended the week down 6.44% at $1.38.

What do you think of Ten’s strategy? Too risky? Or required in today’s marketplace?

For more information check out www.tencorporate.com.au