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Ten launches digital One and changes free-to-air TV forever
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Thumbs up Ten launches digital One and changes free-to-air TV forever - 31-March-2009, 05:46

THERE was no thunderbolt from above, but when Network Ten last week launched One -- Australian commercial free-to-air TV's first new channel in more than 50 years -- it forever changed the TV landscape.

After years of an industry comprising just the Seven, Nine and Ten channels, since last Thursday night we now have a fourth -- One, a digital-only free-to-air sports channel.

It's a tectonic shift, the import of which has mostly gone unnoticed. But consider these facts:

* From April (when ratings provider OzTAM starts measuring One), Ten's sales team will be selling to advertisers two free-to-air TV networks: Ten (focused on the 16 to 39-year-old and 18 to 49-year-old demographics) and One, which has broad demographic appeal.

* The launch prompted the creation of four new locally produced free-to-air TV programs.

* The "Ten Sports" brand has been dumped as Ten adopts a pay-TV-style cross-promotional strategy. That means all sports events on Ten will now be "brought to you by One".

* Major sports such as swimming, netball and many golf tournaments have moved from pay-TV.

* One will broadcast more hours of cricket this year than Channel Nine.

* And for the first time, a free-to-air TV channel with green livery has emerged.

While the digitally savvy ABC has broadcast its unique digital channel ABC2 since 2005, it's taken the full eight years since free-to-air digital TV started in Australia for a commercial TV network to follow suit.

The industry has argued it's been a "chicken and egg" situation as they did not want to invest in content few people will see, while the lack of content meant there was no incentive for people to buy digital TVs.

But now it is the TV makers themselves leading the charge, with virtually all TVs now sold able to either pick up standard definition or the higher-quality high-definition channels.

According to OzTAM, almost 60 per cent of homes in its five metropolitan markets can receive a free-to-air digital TV signal (either SD or HD) and 35.4 per cent of those homes have HD TVs.

Until HD penetration increases, Ten is broadcasting One on both its HD channel (digital channel 1) and SD channel (digital channel 12).

So history will record it was the TV network with the smallest revenue base that has made the biggest investment in free-to-air digital TV and was the first across the line with a full digital channel.

(And that is despite Channel Seven's sustained lobbying effort in Canberra over many years promoting multi-channelling.)

But Ten chief executive Grant Blackley is not complaining about the lack of digital action at his competitors. "We are delighted to effectively be working in a vacuum because it's giving us the opportunity to tell our story very clearly, without interruption, and people are widely accepting of it," he said.

Two-and-a-half years ago -- well before the advertising downturn hit and Ten was still swimming in cash -- the network began a $65 million investment program to upgrade its entire network to digital.

Ten's program executives also started meeting with counterparts in the US and Britain to begin the process of deciding what a new digital channel produced by Ten should look like.

"Then we went to Melbourne last June where we locked ourselves in a hotel room for three days and over the course of those days we made the decision on what channel we would create," Mr Blackley said.

The team of eight executives -- which included program chief David Mott, sports chief (and One's new channel manager) David White and sales chief Vance Lothringer -- considered 71 different channel options. Those ranged from kids channels (such as Disney and Nickleodeon), to factual channels (Discovery, National Geograhpic) and varying types of news channels.

At one stage, the option of broadcasting only 16 to 18 hours a day was considered but quickly dismissed.

The team also looked at creating a "full suited channel" or a channel of mixed content like Ten, but Mr Blackley said they decided against that as "we are already well served by the five free-to-air broadcasters we have today".

"We also looked at a 'pass through' channel where there is a complete channel that operates elsewhere in the world (like Nickleodeon) that we could bring here and joint-venture in terms of advertising.

"But we didn't think that would fully exercise our investment as the spectrum is still valued at about $1billion and we deployed $65 million in capex. I don't think a pass through channel would have given us the ability to service the investment as well as we would like."

Eventually the team settled on a high-definition sports channel.

"Everywhere we went in the world, sport came through as the key driver of digital take-up and was the most aggressive option we could take," Mr Blackley said. Sports and documentaries are acknowledged as the best content for high-definition broadcasts, and Blackley says sport also has wide demogprahic appeal.

"Sport is watched by all demographic profiles and it's a highly passionate and engaged audience which lends itself more to the aggressive option we have taken," he says.

About the same time, Ten engaged consulting group Deloittes to conduct a "blind test" with advertisers on what type of channel they most desired.

"They spoke to 24 leading ad agencies and the result was they wanted a hard-to-reach demographic, a strong genre-based identity and flexibility on state-based inventory (they don't get that through Foxtel because it's a national signal)," Blackley says.

With a sport channel delivering all those features, Ten began spending an estimated $20 million to buy rights to live and exclusive domestic and international sporting events.

"We firmly believe there can only be one sports channel on free-to-air TV and given we have acquired all these rights we naturally expect we will hold the upper hand," Blackley says.

"Content has to be live and exclusive because if it's available on multiple other channels, why would you come and watch One? And we also knew that strong Australian content was paramount."

They decided also that the channel should be made up mostly by "one-run" programs.

"Subscription TV is a highly repetitive model but this is not," Blackley says.

"But that's not to say if a major event happened in the middle of the night, we wouldn't play it in the day so a larger audience can see it. But we are acquiring content on a one-run basis wherever possible."

Ten had a good start in that it shares already the free-to-air TV rights to the AFL with Channel Seven in a deal that extends to 2011.

"Any games we have produced and broadcast we have never been able to replay, but now with One we can do that so we can exercise those rights a bit deeper," he says.

"And the AFL caters for both the male and female demographic and all age groups."

One also picked up the rights to the 2010 Commonwealth Games in Delhi in partnership with pay-TV group Foxtel but has the full suite of rights (broadcast, web, mobile, pay-TV and radio) to the 2014 Games in Glasgow.

Swimming is another key sport locked into One but was previously broadcast on Nine (20 per cent) and Foxtel (80 per cent).

"It's another critical piece of content because it offers a lot of hours and appeals to a very broad age group, and we now own that for the next eight years as exclusive content," Blackley says.

"And with the PanPacs next year we'll move to 1500 hours of swimming over a year. And that's just for the events we know of today. David White is working with Swimming Australia to look at extending the season wherever possible."

Motorsport will also feature heavily, with all Formula One races broadcast live on One and replayed later on Ten.

The weekend's Melbourne Grand Prix was the first example of Ten and One programming on both channels.

"As we call the race we'll say, 'We are now moving to the news, but for those of you who wish to stay on One we have an interview with Mark Webber'. So there's unique content on One and strong cross-promotion," Blackley says.

One also has the broadcast rights to 25 senior golf tournaments, and in cricket it has exclusive rights to the Indian Premier League for 10 years and the Twenty20 Champions League for five years.

Blackley says One is also in the market for more domestic and international sport content.

In terms of format, he says the channel will follow live events around the world, ensuring mid-afternoon to prime time is focused on local events as much as possible.

"So from late night to early to mid-morning that's the European time slot, then it's the US from morning to mid-afternoon, and from then to prime time should be Australian sports."

That will be supplemented with locally produced programs to support One's strong sponsorship-oriented business model.

"We are working on reduced minutage but will have a very high sponsor integration model with One," Blackley says.

"There's the ability to do lots of integration with Australian events, but not with the international ones, so we needed additional sports programming. So Sports Tonight remains on Ten in its current form but will also be 7pm to 7.30pm Monday to Friday on One.

"So if you want your sports news, you'll have a regular destination. And on Sunday at 7.30pm we'll have a program wrapping the weekend of sport."

Blackley expects that program to steal ratings from analogue TV.

"If you have 60 Minutes, Triple Zero Heroes or Dance, which audience do you think it will most likely take from? Probably not Dance but a 25 to 54-year-old male proposition wanting to see the wrap-up of sport on the weekend. So that's an attacking move from us as well."

Thursday Night Live is another new program broadcast from Sydney but with commentators in each of Ten's five state-based studios contributing via satellite.

"If it's around the time of the Australian Tennis Open, we may have Federer in the studio talking about it and getting everyone's opinions," Blackley says.

More people are expected to buy digital TVs or set-top boxes needed to see digital-only channels as they start up.

That is crucial because the federal Government has set 2013 as the date when all analogue TV signals are to be switched off.

Although One is now on digital channel 12, Ten has plans to eventually convert that into yet another new channel.

"We have a reasonably clear idea as to what channel we'd prefer to deploy on the third channel but we won't announce it any time soon," Blackley says.

Meantime, Ten is marketing One with a $1 million outdoor campaign as well as a $1 million campaign with ACP's women's and sport magazines as it seeks to target One to a broad range of people, not just sports fans.

"You'll notice the word 'sport' is not in the brand and that's by design because we don't want half the population deciding they don't wish to watch the channel because it's called 'sport'," Blackley says.

Ten is believed to have scored about $15 million so far in advertising for One, which it has launched with only 35 extra staff
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