©AAP 2005
Sunday Oct 9 10:55 AEST
Reality shows will be behind the bumper profit Ten Network Holdings Ltd is expected to report next week but there are concerns the genre's popularity could be on the wane.
Ten has scored ratings successes in calendar 2005 with Big Brother, Australian Idol and more recently with its coverage of the 2005 AFL grand final.
It remains the leader in its key 16-37 age demographic with a 36.7 per cent share for the year to date, 4.5 share points ahead of Nine and 5.6 points clear of Seven.
But a recent report by UBS says Ten's star performer last year, Australian Idol, has recorded a 30 per cent ratings decline this year compared to the previous corresponding period.
This decline, coupled with the failure to kindle audience interest of The X Factor and Australian ***** Eye For The Straight Guy, has raised concerns about the ongoing popularity of reality TV.
ABN AMRO analyst Fraser McLeish said he would be looking for commentary on Ten's market share expectations for fiscal 2006.
"Ratings are down on the prior year and there is concern that it will impact revenue share going into 2006. Ten is also up against The Commonwealth Games and Winter Olympics on the other channels," Mr McLeish said.
Shaw Stockbroking analyst Greg Fraser said he also wanted to hear how the network was managing its costs.
"While the market is still growing, it is slowing, so the outlook statement will be important," Mr Fraser said.
Other analysts expressed concern that neither Ten nor Publishing and Broadcasting Ltd's Nine Network have as compelling a program line-up for next year.
Ten will probably be under the pump in upcoming advertising rate negotiations for 2006 and this could have a negative impact on its revenue share, one analyst said.
In June, Ten's executive chairman Nick Falloon said the group was on target for a record annual result for the year to August 31, 2005, after posting a 24.6 per cent jump in pre-tax profit to $269.1 million for the first three quarters.
Market consensus currently tips earnings before interest, tax, depreciation and amortisation (EBITDA) to come in at about $341.5 million for the group.
Net profit forecasts for Ten are about $85 million for the year to August 31, 2004, up from of $76.93 million previously.
©AAP 2005
