Seven West Media comes out in front

Television Industry body Free TV, which represents Australia’s commercial free-to-air television licensees, has released market share results by advertising revenue for networks Seven, Nine and Ten for the six-month period from January to June 2013.

The results show that owner of the Seven Network, Seven West Media (ASX: SVW), has once again managed to capture the major share of national revenue spend with a 40.5% share. In second place was the privately owned Nine Network with 37.6%, while a long way behind in third place was Ten Network (ASX: TEN) with just a 21.9% share of revenue spend. The respective market shares were little changed year on year, however, Seven and Ten did manage to creep forward, while Nine went backwards marginally.

From a state-based perspective, Victoria and Western Australia saw revenues grow 0.54% and 3% respectively, while every other state registered a decline in revenues compared with the prior corresponding period.

Ten’s lacklustre market share performance has been replicated in its share price performance. As the chart below shows, since the start of calendar year 2013, the S&P/ASX 200 Index (Index: ^AXJO) (ASX: XJO) is up 8.55%, while Ten is down 5.16%. Over the same period both Seven West and Southern Cross Media (ASX: SXL) have significantly outperformed.


Source: Google Finance

In other recent news to come out of the media sector the Ten Network has confirmed it has renewed its affiliate agreement with Southern Cross Media. The agreement is for three years and replaces the previous 10-year agreement. No further details were released, however reports suggest Ten Network improved the terms in its favour in the new agreement.

Foolish takeaway

The media sector continues to be a minefield for investors. While companies like Twenty-First Century Fox (ASX: FOX) prosper through pay TV, free-to-air TV businesses remain complicated investment propositions but not nearly as difficult as newspaper companies which continue to be in structural decline.

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Motley Fool contributor Tim McArthur does not own shares in any of the companies mentioned in this article.

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