TEN NETWORK has reined in its bullish profit expectations for the year, warning its television earnings may fall about 10 per cent after a sharp downturn in advertising demand in the recent weeks.
The broadcaster's shares plunged as much as 20 per cent yesterday, accelerating a sharemarket sell-off in which the stocks of media companies, including its bigger rival Seven Network and Fairfax Media, publisher of the Herald, have shed more than a third in market value this year.
Ten is the first big media company to confirm it is feeling the pinch from the economic slowdown, which has sent consumer confidence to a 16-year low and fuelled fears of a tightening in advertising budgets.
"Towards the end of April, and certainly into May and June, the market has softened quite quickly," said Ten's executive chairman, Nick Falloon. "Obviously we didn't expect it to turn as sharply down as it has, as we said three months ago that things were tracking quite nicely."
In March the company dismissed analysts' forecasts of a dramatic worsening in the TV advertising market as doom and gloom scenarios, insisting that demand had been "remarkably resilient" in the face of recent economic jitters and rising interest rates. Credit Suisse and Merrill Lynch had predicted Ten would be the hardest hit by a slowdown because of its heavy reliance on national advertising spending.
This is from Sat Herald. If the big boys are slowing there is a natural flow on to smaller sellers like BNM. Big advertsiers tie down TV and in store prior smaller opportunites so it TEN and others are being hit it will result in a downturn for ad revenue from BNM DYOR howver this is looking more shaky
DES Price at posting:
0.0¢ Sentiment: None Disclosure: Not Held
