Question 1

How severe is the current downturn in the Australian television market?

Accepted Answer

The advertising market is facing a significant structural contraction, with the metro FTA segment declining by 7.0% and the broader Australian ad market falling by 8.5%. We forecast this trend to continue through 2023, with regional FTA revenues expected to drop at a CAGR of 7.7%.

Question 2

Is Seven West Media maintaining its competitive position despite the market decline?

Accepted Answer

Seven has successfully increased its FTA revenue share to 38.8%, making it the leading network by revenue. Despite this market-leading position, the company's operating EBITDA fell by 20.1% during the first half of 2020 due to broader economic pressures.

Question 3

Where are the primary growth opportunities within the business?

Accepted Answer

Digital transformation is driving significant returns, evidenced by a 205% increase in Digital EBIT during 1HFY20. Consumption on the 7plus BVOD platform grew by 42%, highlighting a clear shift in audience engagement toward streaming services.

Question 4

What is the strategy for offsetting the loss in traditional broadcast revenue?

Accepted Answer

The company is pivoting toward global content production, securing commissions from major streaming players like Amazon and Facebook. Additionally, management is executing a $45 million cost-out program scheduled for 2H20 and FY21 to protect margins.

Seven 1H20 update – revenues fall in a declining market

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