MediaWorks financial results: “You have to admit it’s getting better”

At first glance, the release of MediaWorks’ financial figures this week shows an organisation treading water but slowly moving upwards towards the dry land of profitability. On the surface, a net loss after tax of $5.7 million is not the result hoped for but with the perspective of a loss in the previous year of $14.8 million, the progress is significant.

“We are not where we want to be yet,” confesses MediaWorks’ chief executive, Michael Anderson, “but if we were needing validation on our approach and strategy, then we have received that and we just need to keep motoring along.”

That strategy included a change in programming for Three, shifting to building primetime consistency rather than individual show performance. Despite this, the 2017 results show that radio remains the most important part of the business increasing revenue from $155.3 million to $159.3 million for the 2017 financial year.

  • See TVNZ’s 2018 interim report and Sky’s latest interim results here.

TV revenue declined slightly from $130.1million to $129.3 million. But in the context of increased market fragmentation and burgeoning streaming services, this too is a good result, exemplified by the realisation that peak share of audience in the 25-54 cohort increased from 19.1 percent to 20 percent.

The surprise perhaps is in digital, where a market shift of ad-spend from television to digital channels resulted in only a jump to $11.6 million dollars in revenue from a previous year figure of $11.1 million.

MediaWorks needed to convince agencies and clients of the validity of its strategy, particularly those that want to be across multiple platforms, and the feedback from Anderson is that his organisation has received “an enormous amount of goodwill and openness”.

There is a great deal to be optimistic about. Three was the only major free-to-air channel to show growth in peak 25-54 share in 2017, increasing its share of the viewing audience from 19.1 percent to 20 percent. Three not only maintained but increased its lead in the crucial Auckland market (25-54) and took the lead across Metro markets (25-54).

Meanwhile, ThreeNow on demand streams increased by 30 percent in 2017 versus 2016. ThreeNow video streams are up 83 percent in Q1 2018 with an audience growth of 19 percent versus the same time last year.

On the radio side, MediaWorks radio has delivered its highest ever audience with a total of 2,417,600 listeners in May 2018, an increase of 100,800 from December 2017. The Edge is still New Zealand’s most popular station with 639,800 listeners, and nationally, More FM Breakfast attracts the most listeners of any commercial station as well as being the favourite drive-time radio station.

Newshub continues to be New Zealand’s number one source of news reaching over 3 million Kiwis per month across TV, radio and digital combined and Anderson is really pleased with how Newshub has grown.

“The backbone of Newshub at 6pm, The Project at seven and even the afternoon Newshub at 4pm, has really been the strong foundation, as they are shows that happen all year around and seven days a week. Digital derives its reason for being from the main content but within that, we’ve done a lot of work to improve the user experience and increased the capacity for agencies and fivclients to access those platforms. It’s been a really positive uptake, both last year and this year, where we are continuing to get significant double-digit growth.”

The entertainment shows have been very consistent in their performance for Three and the focus on prime time has worked extremely well. Local series and specials continue to be among the most popular content on television. In 2017 eight out of the top ten series and specials on Three were local productions.

Three’s most recent local production, Dancing with the Stars NZ is averaging a 9.1 rating and 25.8 percent audience share in 25-54, winning its timeslot regularly. In Q1 of 2018, The AM Show has increased its audience by 23.3 percent and its share by 25.5 percent versus the same time last year, and The Project has increased its share in Q1 of 2018 by 1.1 percent.

“Everything has come together as we really hoped,” says Anderson. “The strategy has worked and we’ve had a bit of luck along the way.”

So, what does the future hold? More cross-platform opportunities perhaps? More strategic alliances with other partners? As expected, Anderson is guarded about his future plans, but there is no denying that the learnings of the post-Weldon era are paying dividends for MediaWorks.  

“It’s hard enough without telegraphing to our competitor,” chuckles Anderson, “but you can be sure the level of disruption in the market will continue. The world has changed, alliances and partnerships are being formed with partners that would not have been relevant some years ago. The opportunity for us is in the differentiation of the type of content that we can offer on each platform.”

In the words of The Beatles: “You have to admit it’s getting better, getting better all the time.”

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Graham Medcalf is a freelance writer and owner of Red Advertising.

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