Seven takes aim at digital market

Seven Network’s do-it-yourself approach to content has put the company in a prime position to launch new digital products.

The new digital boss of Seven West Media has made e-commerce a bigger strategic imperative to avoid being at the mercy of a soft advertising market.

Seven chief digital officer Clive Dickens said digital subscription models were under consideration as he laid out a strategy for the media company aimed at gener­ating additional non-advertising revenue.

“Strategically, it will be important for us in the future to reduce our reliance on advertising,” Mr Dickens told The Australian. “We’re looking at how we can benefit from a growing e-­commerce economy.”

The free-to-air network’s do-it-yourself approach to content has put the company in a prime position to launch new digital products because the company owns all the rights to home-grown programming such as Home And Away and My Kitchen Rules, Mr Dickens noted.

“We believe we own more stories than the other free-to-air broadcasters in terms of hours whether it’s scripted drama, soaps or reality formats,” he said.

“We also believe we have more rights to distribute the stories that we don’t own. This can be a very positive period for people who own the rights to tell those stories on multiple screens.”

Mr Dickens said online streaming service Presto, a joint venture with pay-TV operator Foxtel, could be the key to making a success of new online businesses.

“We have a very passionate joint venture with Presto. That is our first very real foray into digital subscriptions and I’m sure there will be other opportunities do that,” he said.

“One of the reasons that we partnered with Foxtel is that we felt their relationship around transactional and pay products is a great position to learn from.”

Typically, free-to-air networks earn the vast majority of their income from advertising bookings. In 2014, Seven had television sales of $1.3 billion, which made up as much as 70 per cent of total sales, a figure that is expected to fall in the next two financial years before bouncing back due to Olympic Games coverage.

Five months after Mr Dickens joined Seven from Southern Cross Austereo, he has unveiled his first major product launch — free sports apps to livestream some of its biggest franchises. Sports fans can watch Wimbledon and Davis Cup tennis, Royal Ascot races, the world swimming championships and three major golf tournaments on four dedicated apps from next month.

For Seven, the fight to preserve the more lucrative old-fashioned way of watching television while exploiting the new is a delicate balancing act. But Mr Dickens rejects suggestions executives are fretting about the risk of starting online services that could eventually disrupt the own core TV business, pointing to large multi-platform audiences for the Australian Open tennis.

“Because we brought the tennis to more screens and marketed it so furiously on and off network it was very hard to avoid. It didn’t cannibalise TV our ratings, which increased. For live sport we’re not thinking about erosion we’re thinking about how much more television people can watch.”

Key to the success of a more expansive online strategy is the imminent Australian commercial launch of Tumblr, the social website Seven’s digital joint venture partner Yahoo purchased in 2013 for $US1.1bn.

Seven’s relationship with Yahoo has been tested in recent years amid falling revenue from display and search advertisements, but Mr Dickens said the joint venture had never been stronger as Yahoo chief executive Marissa Mayer attempted to turn around the company with her “mavens” strategy.

Ms Mayer is trying to shift attention from the declining parts of the ageing internet portal to emerging areas by grouping them into one category called mavens — an acronym for mobile, video, native and social advertising.

“Ironically after coming together 10 years ago with a meeting of minds and maybe a period a few years ago of slowing drifting apart, now it’s really clear to both parties that our companies are more aligned than ever before,” Mr Dickens said.

The greater focus on content amid cost-saving measures has stabilised the Yahoo7 business under new chief executive Ed Harrison. The business lifted revenue 3.2 per cent in the six months to December 27 on the back of a greater share of advertising bookings.

According to Standard Media Index, financial year to date media agency bookings for the Yahoo 7 sales network gained 6.4 per cent, putting it within touching distance of its closest rival Fairfax Digital, which reversed 9.7 per cent over the same period.