Seven West Media Boosts Digital Growth Amid TV Ad Revenue Decline
Seven West Media reported a 6% decline in total TV advertising revenue for the half-year ending December 2024 but achieved record digital audience growth and increased its TV revenue share to 41.5%. The company’s strategic investments in digital platforms and cost management signal a pivot towards a more resilient media business.
- Total TV advertising revenue down 6% due to soft market and one-off sporting events
- Record 41.5% total TV revenue share for a non-Olympic broadcaster
- 7plus digital platform audience up 43%, with Q2 revenue growth of 23%
- Operating costs reduced by 2%, with FY25 cost guidance maintained
- New Phoenix platform to enhance audience trading and inventory optimisation
Half-Year Financial Overview
Seven West Media Limited (ASX: SWM) released its half-year results for the period ending 31 December 2024, revealing a mixed performance amid challenging market conditions. Total TV advertising revenue declined by 6%, impacted by a soft advertising market and the absence of major one-off sporting events that had boosted prior periods. Despite this, the company managed to increase its total TV revenue share to a record 41.5% for a non-Olympic broadcaster, underscoring its competitive positioning in the Australian free-to-air television landscape.
Digital Growth Accelerates
The standout feature of the results was the robust growth of Seven West Media’s digital platform, 7plus. The platform’s audience surged by 43%, driven largely by premium sports content, including cricket and AFL, which attracted 347,000 new registered users during the cricket season. Notably, approximately 70% of these new users were within the highly coveted 18-54 demographic. This translated into a 23% increase in 7plus revenue in the second quarter, highlighting the platform’s growing importance as a revenue driver and audience engagement tool.
Cost Management and Efficiency
Seven West Media demonstrated disciplined cost management, with operating expenses down 2% year-to-date. The company reaffirmed its FY25 cost guidance, targeting a reduction of $20 million to $30 million compared to the previous year. This focus on efficiency is critical as the company navigates a soft advertising market while continuing to invest in growth opportunities, including the rollout of the Phoenix platform, a new audience trading system designed to optimise inventory and improve customer experience across metro, regional, and BVOD markets.
Strategic Initiatives and Market Position
Seven West Media’s strategy centers on optimising traditional assets, delivering a digital future, and finding new revenue streams. The launch of 7plus Sport and the 7plus First content strategy are key pillars driving audience and revenue momentum into the second half of FY25. The company also plans to leverage ancillary AFL content to extend engagement beyond live games, aiming to 'own the footy' throughout the week. Meanwhile, The West Australian continues to grow its digital audience and paying subscribers, offsetting declines in advertising revenue with circulation growth and cost reductions.
Outlook and Market Context
Looking ahead, Seven West Media expects modest earnings growth in the second half of FY25, supported by an improving advertising market, AFL season launch, and the upcoming Federal Election. The company’s net debt position improved slightly to $260 million, with leverage at 1.7x EBITDA, reflecting prudent financial management. The Phoenix platform’s March 2025 go-live is anticipated to be a transformative step in audience trading, potentially unlocking further revenue opportunities.
Bottom Line?
Seven West Media’s pivot to digital and cost discipline positions it well for a more resilient future despite near-term advertising headwinds.
Questions in the middle?
- How will the Phoenix platform impact advertising revenue and inventory yield in practice?
- Can 7plus sustain its rapid audience and revenue growth beyond premium sports seasons?
- What risks remain from the soft advertising market and potential regulatory changes?
