Ten Network is an Australian television broadcasting company that has found itself struggling lately; hardly news in these troubled times for the media. But this might be the perfect time for larger media companies to swoop in and make something new. This likely what CBS Corp was thinking: the most-watched US television network has just announced plans to buy Ten Network Holdings Ltd, which also happens to be the broadcaster’s largest Australian customer.
CBS says that this purchase will help the company launch its streaming service in the Land Down Under. The deal comes just in time as Lachlan Murdoch—the co-chair of CBS Rival News Corp, who is also a Ten creditor—led a consortium that was about to take over Ten. In fact, CBS Chair and Chief Executive, Leslie Moonves notes, “We have been able to acquire it at a valuation that gives us confidence we will grow this asset by applying our programming expertise in a market with which we are already familiar.”
CBS, of course, is dipping its toes into an Australian television market where broadcasters—and Ten Network, particularly—have to cut (often massive) costs to cover deep losses at a time when advertisers are migrating to streaming services. Obviously, advertisers go where the viewership is, an the popularity of Netflix, Hulu, and Amazon are a sure sign what viewers want.
Now, CBS has been on a bit of a hot streak with risky ventures. The company has fought to own more of the shows that it products (almost more like a production company who streams its own work—the way Netflix is succeeding now—than a broadcaster simply loaning out its distribution methods). Hawaii Five-O, for example, is a massive global hit, with international licensing revenue close to $1.5 billion in 2015 (up from $500 million just ten years prior). Shows CSI (and its spinoffs) and NCIS are also massively popular, but CBS claimed that Ten owed upwards of $844 million AUD for licensing.
With that in mind, though, Ten Network CEO Paul Anderson comments, “CBS and Ten have had a strong relationship for a number of years; we are very excited about further developing that relationship … at this critical time.”
Indeed, media analyst Peter Cox agrees, “It’s already a huge relationship. All the major dramas on Ten are supplied by CBS,” he says, noting also that the network’s popularity in Australia has been in decline. “The test will be whether an American network can relate to an Australian audience and deliver Australian programs that Australians want to watch.”