Digital drivers a focus for Seven West Media amid challenging advertising market

Seven West Media boss Jeff Howard says the company is working to build a better and more resilient business as it manages a tough advertising market.

The company on Wednesday reported increasing its share of revenue and audience growth had partly offset the impact of a depressed advertising sector amid broader cost-of-living pressures hitting consumers.

Perth-based newspaper The West Australian performed solidly, the company reported, with increases in digital and commercial print offsetting known headwinds in traditional print media. Digital audiences have jumped 9.6 per cent year-on-year.

Revenue for The West was broadly flat, and new sources of digital advertising, including from The Nightly, helped to drive that result.

The division’s like-for-like costs have held flat.

“The West continues to demonstrate the benefits of this empowerment and accountability in holding performance in the face of structural and cyclical headwinds while developing digital initiatives to create new revenue and profit opportunities,” the company told the ASX on Wednesday.

Mr Howard later told analysts that SWM’s strong ownership and accountability model in WA had “seen The West innovate and drive change faster than Seven has over the last couple of years”.

He added The Nightly was “a fantastic example of how we’re finding new revenue opportunities”.

“In less than six months, The Nightly has become an extraordinary success,” Mr Howard said.

“It had a unique monthly audience of over 2.3 million and more than five million page views, making it the fastest-growing news brand in Australia and an incredible challenger to established news brands such as The Australian and the AFR.”

Mr Howard expects The Nightly will be earnings-positive for SWM in the 2025 financial year after its incredibly successful first five months.

“We have big plans for The Nightly over the next 12 months to continue building its audience and revenue,” he said.

Later, he told The West Australian: “It’s a fantastic result to basically start a business from nothing and have it break even in its first five months with a pathway to strong profitability after the next 12 months. (It) is an amazing result.

“There’d be plenty of startup people out there that wish they could work out how to do that.”

“It demonstrates that we can actually use the platforms we’ve got to create new products and new audience trends, that can be monetised for our benefit.”

A company-wide restructure, transforming Seven West into three divisions of television, digital and The West, is expected to drive revenue, productivity and cost efficiencies.

“Our overarching aim is to build a better digital media business, to take control of our own destiny, to redefine what success means for Seven West Media and . . . delivering a digital future,” Mr Howard told analysts.

In broadcast, Mr Howard called out video-on-demand as a clear opportunity for Seven to grow further — there had been strong growth in audience numbers but revenue had not been fully captured. He highlighted titles such as Mr Bates v The Post Office, a UK mini-series, that had been highly successful on 7Plus.

He hopes more inclusive sports rights for marquee events like the AFL will help lift results, while the upcoming summer of cricket had so far been well-received by advertisers, with bookings up 11 per cent compared to the same time last year. Seven from next year will be able to live stream AFL matches on 7Plus, while this year’s AFL Grand Final will also be on the platform, as well as the Big Bash League and the Australia-India summer Test series.

Mr Howard also said broadcast audiences remained strong.

He said suggestions audience numbers were collapsing were “simply not true”. There had been a 0.5 per cent increase in broadcast audience in the 2024 financial year, a 39 per cent jump in broadcast video on demand audience numbers in the same period, and Seven remained the number one network for national audience share for a fourth consecutive year.

Leading up to the Olympics in the 2024 calendar year, Seven’s primetime audience nationally was down less than one per cent. “Seven’s audience is not collapsing,” Mr Howard said.

Other initiatives involve working more deeply with data intelligence company Databricks to ensure 7Plus users have the advantage of the most advanced products in the market.

Operating costs across the business increased 2 per cent for the full year and Seven will extend a cost savings program it began last financial year into 2025.

“We are committed to driving improved profit and cash flow irrespective of market conditions,” Mr Howard said.

“Despite the advertising environment, we are focusing on capturing a greater proportion of available dollars in each market including a step-change in our digital revenue performance.”

Across the company, net debt increased to $301 million from $249m a year ago, largely due to a share buy in radio broadcaster ARN in November.

Statutory profit after tax was $45 million, down from $146m for the 2023 financial year.

Mr Howard also reiterated SWM had taken steps to address its internal culture.

“A number of people who have displayed behaviour that doesn’t reflect SWM’s values have already been removed from the company,” he said. “We are focused on building a stronger, high-performance based culture.

“My focus since I stepped into the job in April has been setting a new course.”

Despite these challenges, Mr Howard said he was not daunted by the task of lifting Seven’s results, and was confident it was possible.

“We have got a fantastic team. Everybody’s raring to go,” he said, adding the new organisational structure had created different ways of thinking

“Obviously changes are always difficult, but, you know, we’re seeing the benefits of those changes already.”