Why the Ten Network Holdings Limited share price is sinking

The Ten Network Holdings Limited (ASX: TEN) share price has plunged nearly 14% today to $1.295, continuing its disastrous share price run and it looks like getting worse.

The free-to-air (FTA) broadcaster recently consolidated its shares so each share is now worth 10 previously, but the share price is still heading on a downward trajectory. The Ten share price is down 24% over the past month and 39% over the past six months, as the broadcaster struggles to remain relevant.

I’ve long argued that Australia has less and less room for a third FTA broadcaster and Ten looks like the unlucky one, although the company is certainly doing itself no favours.

The company has announced that it will screen the first episode of the rebooted X-Files show a week after American viewers have seen it, seemingly holding it back to compete with Seven West Media Ltd (ASX: SWM) Australian Open final on this Sunday night. The move is reminiscent of the pre-internet era and takes advantage of our inability to see overseas shows when they first go to air.

Viewers have taken to Twitter to express their frustration – with some suggesting that Ten is encouraging fans of the X-Files to resort to pirating the show. Particularly as Ten has no plans to make the show available earlier or even live on its digital offering Tenplay.

Clearly management at Ten have little regard for viewers – and its highly likely that ratings for the X-Files are going to suffer as a result. It also shows they have little understanding of how the internet-age really works.

Ten also has another issue on its hands after a highly successful Big Bash League (BBL) season. Ten paid $20 million a season for rights to five years of cricket’s BBL in 2013, but may well have to offer at least twice that when the broadcaster comes to renegotiate with Cricket Australia, not to mention heightened competition from Nine Entertainment Co Holdings Ltd (ASX: NEC) and Seven.

Foolish takeaway

Management at Ten have clearly shown their disregard for viewers and it wouldn’t surprise me if the X-Files was a flop with thousands of Australians seeking out other sources to watch the show.

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Motley Fool writer/analyst Mike King doesn't own shares in any companies mentioned. You can follow Mike on Twitter @TMFKinga

Unless otherwise noted, the author does not have a position in any stocks mentioned by the author in the comments below. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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