Nine Entertainment have predicted a 15% decline for the free-to-air television market for the final quarter. The current slump in TV advertisements is likely to carry on through to the next financial year.
Nine chief executive officer Mike Sneesby said in an ASX update the slow advertising cycle represents a weak economy, the uncertainty proves the industry’s “limited visability” of a rebound.
“Consistent with our commentary in February, the metro FTA market declined by around 15 per cent in Q3 (on Q3 FY22), with a similar decline expected in Q4 (on Q4 FY22), albeit the market remains short, with limited visibility.”
“The absence of key events, particularly the 2022 federal election, accounted for an estimated six per cent of this decline.
“Total television costs are expected to increase in the low single digits in the second half, resulting in FY23 total television cost growth of slightly below seven per pent, as per the February guidance.”
There have been some significant expenses made by Nine this year, including the $315m, 10-year bid to gain the rights to the Summer and Winter Olympic Games, going until the Brisbane 2032 Games.
Mr. Sneesby believes Nine stays in “an incredibly strong position.”
“Our business has embraced the opportunities of digital, extending Nine’s content across the evolving digital platforms.”
Mr. Sneesby’s counterpart at Seven West Media, James Warburton has similar statements.
“We believe that the market will be down in total television circa 11 per cent for the third quarter of FY2023. The market is still being relatively short and trending in a similar fashion … we could expect that to continue through the rest of the second half.”
Mr. Warburton has reported Seven media has intentions to cut a further $20m in costs to support the decline of the advertising revenue. He does however believe in a strong industry bounce-back.
He admitted Seven’s broadcast video-on-demand platforms were experiencing a double-digit growth, which he expects will continue.
The share price for Seven West Media closed at 38c on Wednesday, down by 1.28 per cent. Nine shares were steady at $2.03.
