The struggling Seven Network is undergoing an internal restructure that
will see its stations going more local, while at the same time
introducing major changes to its advertising structure.
The Seven Network is undergoing an internal restructure that
effectively reverses the highly centralised structure set up by David
Aspinall, the Network’s former chief operations officer, now on sick
leave until the end of January.

The moves will see Seven returning to a model strongly similar to Nine’s.

News of the changes, that will see each Seven station going more local,
with greater resources in the news area and less dependence on the
Seven operations area at Docklands in Melbourne, follows a management
restructure announced a month ago by TV chief, David Leckie in a memo
to staff late one Friday. Here’s the Crikey report – Seven’s management restructure.

Now local stations outside of Sydney and Melbourne will be given a more
local look to enable them to become closer to their markets.

The Aspinall move saw a lot of the broadcasting and operations side
(such as control rooms) based at the Melbourne centre at Telstra Dome.
That is a state of the art digital centre that could, theoretically,
run all the Seven Network from there.

But even Seven recoiled from doing that. In the late 80s, Fairfax tried
to centralize all TV operations for Melbourne in Sydney when it briefly
had the Seven network. That failed and Seven’s news ratings dropped to
single figures at one stage.

And Nine and Ten (and the ABC) would trumpet the lose of touch with the
local community and snatch advertisers, staff and other business from
them.

There’s also been changes to the programming and marketing department,
which is centralised in Sydney. It’s being split up, restructured, with
programers and marketing people being sent to the ‘states’ especially
Adelaide, Perth, Brisbane.

Nine is probably the most local of the commercial networks (so to the ABC compared to SBS)

Local managers at Nine have more power than Seven’s, although in the
changes after the move to power of John Alexander, there has been more
centralising of decision making in Sydney. But not of news, which is
determinedly local for Nine.

This comes as Seven revealed details of a big change to its advertising
rate structure. It is following Nine by offering advertisers an end to
bonus spots, but instead of trading that off with a lower than expected
lift in rates, Seven is offering to freeze rates next year.

That’s because the network’s performance has been scatty and behind its
promise at the start of the year when it guaranteed to lift ratings.

That hasn’t happened except for news and current affairs (News and Today Tonight), Sunrise nationally and in Sydney.

Seven’s mid evening performance has picked up in the past six weeks since Dancing with the Stars was launched and the revamps of Blue Heelers and All Saints
hit their straps. But the audience numbers are around seven per cent
under last year, hence the smack of desperation in offering advertisers
a freeze.

If Seven had tried to claim a rate rise, they would have been laughed out of the room by media buyers.

As it is and depending on the client, the offer to get rid of
bonus spots will produce a small effective rise, but that will be on a
case by case basis, unless clever buying groups force a Seven to drop
its rates to compensate for the loss of bonuses to produce a bottom
line freeze.

And, in attempt to differentiate itself and improve its Sunday evening
performance, Seven wants advertisers to agree to fewer but more
expensive ads in prime time (and especially from 8.30pm with the Movie
timeslot) so as to make viewing more like cinemas and DVD watching at
home.

Ten has abandoned the Sunday night movie, Nine has flirted twice (the
second time this Sunday evening) with running fresh episodes of CSI and Cold Case to try and limit strong programming by Ten – the Idol final is this Sunday.

Seven knows it will be squashed and it has to do something to look different. The SMH report on the new Seven approach is here.

The decision to freeze ad rates next year shows how far Seven has sunk
and how much it depends on being the ‘third force’ in the market to
stop advertisers from being pillaged by the more successful Nine and
Ten.

Seven knows, that in a market forecast to grow by at least 10 per cent
next year, it can get business by offering advertisers such a good deal
compared to Nine and Ten, that they have to put business with the
Kerry Stokes controlled network.

But Seven knows the time for promises is past. Current management has
exhausted most of its goodwill with advertisers and investors. 2005
will see the Network have to deliver, or it will be oblivion for quite
a few people.

November 19 – More details emerge


The changes at the Seven network, reported yesterday now look to be more fundamental than at first thought.

Now more details of the changes, which are in News, current affairs and
many areas of production and operations and also in the marketing,
promotions and programming.

Driving some of this is the realisation, without admission, that the
centralise to Dockland policy had actually lowered the Seven Network’s
profile and operating flexibility in Brisbane, Adelaide, Perth and in
regional Queensland and WA.

As well the new Martin Place news and Current Affairs facility in
Sydney has freed up a lot of old equipment at Epping that cannot be
used in Sydney and has a low, if non-existent resale value. So the
easiest thing is to reuse elsewhere in the network.

The write-down values versus the costs of taking it from Sydney,
transporting it and re-installing elsewhere would make the latter
option financially a goer (and the same applies to South Melbourne).

Buying new equipment for the regions would be prohibitive in cost
terms, especially when there’s all this equipment available at Epping
in Sydney and South Melbourne.

Equipment either mothballed or junked is being sent back to Brisbane,
Adelaide and Perth and to Seven’s regional operations (in Queensland
mostly, but also in WA) to rebuild the news room and control facilities
eliminated in the great David Aspinall-driven centralise everything.

This is still going to cost money(but not as much as new equipment
would or writing it off) but it will also cause enormous dislocation,
job losses, especially in Melbourne and unhappy re-locations for dozens
of staff back to cities from which they were re-located over the past
couple of years.

Seven staffers say it is a form of madness common to the company that
has plunged from one direction to another over the past 10 years
(basically since 1995).

The equipment being sent ‘local’ is coming from the old Epping news
centre and studios in Sydney and from Docklands and South Melbourne in
Melbourne

Seven describes it was ‘purely and simply a technical relocation” with
“a digital control room into Perth, Adelaide and Brisbane allowing for
a bolstering of local news and local window presence”.

It’s fine-tuning rather than re-structuring. There were “about 12 job
losses in Melbourne”, but these have been moved to Perth, Adelaide and
Brisbane.

Seven newsrooms were maintained in these cities and there will be no
added cost to the network, “just equipment and a couple of extra people
in each market”

But Seven people say that it is a little more disconcerting than the official line and more problematic for a lot of people.

Earlier this year around 20 to 25 people in News and Today Tonight
staff in Brisbane, Adelaide, Perth and elsewhere were told that if they
wanted to continue working for Seven in these areas, they would have to
re-locate to Docklands.

Most did, but last week these people were told that if they wanted to
continue working for Seven in news and current affairs then they have
to relocate from Melbourne back to Brisbane, Perth, Adelaide and the
regions. There were also retrenchments in Melbourne.

This staff sources say is simply disconcerting and a sign the
management swings wildly from one ‘good’ idea to another, simply to
boost cost cutting impressions.

As well, others report that there has been a concerted effort by Seven
managers to push production staff off the payroll and onto the budgets
of producers doing programs in Sport, dram and Light Entertainment.

There have been reports earlier in the year about some people in the
hit 7 pm soap of Home and Away unhappy with cuts to production staff
levels, out sourcing.

The cuts have happened at Epping in Sydney and at South Melbourne.

Much of the equipment being sent to Brisbane, Perth, Adelaide and the
Seven regional stations is being taken from the Epping and South
Melbourne facilities. Seven is not buying in new equipment.

The idea seems to be to lower production staff levels dramatically (
Seven has little live sport apart from Rugby union tests and racing
telecasts and the Tennis. These are easily handled with casuals and
some fulltime key people such as technical producers, directors and
planners).

The Aspinall cuts cost 300 people their jobs and $15 or more million in
redundancy and restructuring costs. The Seven annual report said a
couple of months ago that another 32 jobs would go this year but the
redundancy payments would be much smaller.

From the comments from staff what seems to be creating confusion and
undermining morale is the reversal of the centralise to Docklands
mantra of the past couple of years.

Decentralise to the regions (sounds a bit like the current argument
inside the ABC about regional production) such as Brisbane, Adelaide
and Perth sounds good, but staff wonder when the next ‘good idea’ from
management will take things.