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Is this the end for Ten?

In an ominous sign for Ten Network Holdings (ASX: TEN), Nine Entertainment posted a 38.5% share of advertising on free-to-air television in April, up 5.5% over the previous year.

The Ten Network fell further behind, losing 5.1% to a 19.7% share of the ad market. The Seven West Media (ASX: SWM) owned Seven maintained its top spot of 41.8%, down slightly by 0.4%. Nine’s performance was boosted by reality TV shows The Voice and The Block. Ten has been losing market share for some time now, although the broadcaster did manage a 25.1% market share in March, a rise from 23.5% in February, and 20.2% in January.

Ten’s current regional affiliate, Southern Cross Media (ASX: SXL) has been considering defecting to Nine, likely due to Ten’s recent programming and market share performance. Ten is reported to still be in negotiations with Southern Cross, but the outcome is far from certain.

As part of its planned comeback, Ten has reportedly lodged a $500 million bid to wrest the Cricket Australia contract away from incumbent Nine. The Age reports that the offer includes $400 million for all forms of cricket currently shown on Nine, plus a further $100 million for the Big Bash League, which is currently broadcast only through pay TV provider, Foxtel. The Nine Network still has ‘last rights’ to match Ten’s offer, but has been reported to pay just $45 million per year over the past seven years to Cricket Australia.

Cricket currently attracts around $60 million annually in advertising on free-to-air television, suggesting Ten’s bid will be loss making, unless it can generate higher ad revenues. However, Ten is probably more interested in gaining market share, and may be happy to concede revenues in exchange for audience.

Foolish takeaway

Should Nine come up with a matching bid for the Cricket Australia contract, Ten’s slide in market share appears set to continue. While Ten recently grabbed the rights to the 2014 Winter Olympics, it doesn’t have the same audience appeal as the cricket.

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