CanWest - It's all about John

CanWest MediaWorks has a lot riding on broadcaster John Campbell. Picture / Chris Skelton

The story of the listed media company's 3 News audience gains is well known. They have come at the expense of rival One News in the advertiser-friendly demographic of 18- to 49-year-old Aucklanders.

At its annual result presentation this week, CanWest said 3 News increased its share of week-night viewers - in its target audience in metropolitan centres - from 34.9 per cent in the last financial year to 42.1 per cent.

Behind the technical language is a company very happy with the gain.

But analysts - and the company itself - believe it will be tough to keep growing the show's audience share at the same pace.

That's where Campbell comes in.

TV3 filled its 7pm slot with cheap comedies out of the United States for years, a sign, says one commentator, that its focus was firmly fixed on the cash, not the glory.

While rival TVNZ screened costly local shows to fill the slot, for many years TV3 stuck to turning a buck from its prime-time re-runs, such as Home Improvement, despite a frustrated mocking from viewers.

"For the love of god give us something decent to watch @ 7," wrote a viewer in 2002 on an internet chat discussion dedicated to the topic of TV3's Home Improvement re-runs.

Ask CanWest and it's likely to say the online writer's prayers were answered in March last year by the launch of Campbell Live.

Screening a half-hour current affairs show on week nights against TV One's long-standing rival offering was a risky move, say many.

It's much more expensive, says Nigel Keats, creative director (media) at Wellington-based advertising agency Clemenger BBDO, but also offers a greater opportunity.

"I doubt that they'd admit it," he says, "but they could have done something like [Campbell Live] 10 years ago."

CanWest's annual result for the year to August 31, released this week, includes Campbell Live's full-year programme costs for the first time and chief executive Brent Impey says it was the main factor in the 2.5 per cent drop - which equates to $900,000 - in TVWorks' trading profit.

Analysts' descriptions of the CanWest result ranged from the prosaic "solid" to the more glowing "amazing". Forsyth Barr's head of research Rob Mercer says the result was in line with expectation.

Mercer predicts 3 News' audience share will start to plateau and gain 1 or 2 percentage points at most in the next year.

"TVWorks is doing a good job with managing its programming costs and improving its ratings for 3 News," he says.

Ratings spin-off to advertising share may have a six-month lag, he says, which "should provide them some protection going forward".

TVWorks' revenue for the last financial year - 99 per cent from advertising - rose $1.2 million compared with TVNZ's $9.4 million drop in advertising revenue during the year to June 30.

Impey admits continuing 3 News' rapid audience growth is "an issue" and has set new programming goals.

Instead of the 6pm news leading the charge, the 7pm Campbell Live slot could prove to be key in growing TV3's share of audiences and advertisers.

The new goals include maintaining 3 News' current ratings and increasing Campbell Live's audience share.

"In terms of continuing to grow at the same rate, that's an issue," says Impey. "But in terms of having got to an entrenched position then I think we have really solidified our gains."

As Impey enthuses about 3 News' performance over the past couple of years, his sentences are punctuated by words such as "excellent" and "great".

The news show's ratings, he says, have "well exceeded" ambitions the company set when it floated in 2004.

"The TV news ratings are significantly higher than any goals that we would have set. We are now setting new targets for news and for Campbell [Live] going forward."

CanWest isn't taking its eye off its advertiser-attractive 18-to-49-year-old target viewer and wants to get Campbell Live consistently taking an audience share in the mid-20s, says Impey.

For September, the show drew a 19 per cent market share of the nation's 18- to 49-year-olds, compared with TV One rival Close Up's 20 per cent share. It tracked in the mid-to-high teens in the demographic earlier this year.

There's no precise equation to grow viewership, says Impey, but factors include credibility, marketing, lead-in programmes and opposition tactics.

"There's no silver bullet here."

All the channel's programming is important, he says.

Winning more advertising share for TV3 and C4 is one of three key growth areas for the company, says Impey. Other aims are attracting more Auckland listeners to its radio stations and developing new media opportunities through its new Networks business unit.

CanWest's RadioWorks brands, which include More FM, The Edge and The Breeze, have a 35 per cent share of the retail market in Auckland, compared with their 50 per cent to 70 per cent share in other main regions.

The Networks division, with a staff of seven, has launched nine branded websites since April and is due to launch an enhanced news portal, 3 News Live, early next year.

CanWest's shares have traded at between $1.23 and $2.44 since they were issued at $1.53 in 2004.

They rallied this week after the company's result and on speculation of corporate activity, sparked by progress in reforming Australia's media ownership laws. They started the week at $1.72 and closed yesterday at $1.81.

Even with the trend of media fragmentation over the past few years, the number of 18- to 49-year-olds watching TV in prime time this year has risen 4 per cent on average from last year to 35 per cent, says Kevin Blight of media buyers Mitchell & Partners.

And TV3's evening performance is picking up. The channel is in the running to win the most 18- to 49-year-old viewers nationally in prime time this month for the first time.

"It's neck and neck coming up for a photo finish," says Martin Gillman, chief executive of independent media agency Total Media.

The viewership of the final episode of NZ Idol on TV2 - which also has many of its high raters, such as Desperate Housewives, off air - is set to tip the balance either way, he says.

On all-day figures, from 7am to midnight, TV3 is ahead in its target audience. This has been no small achievement, but the network now faces the challenge of further increasing its audience.

Gillman says Campbell Live is a critical show in TV3's evening line-up.

While Campbell is the "nicest person on TV" and the show has a hard edge, Gillman wouldn't describe it as a ratings success - yet. "I think it's a sign of the fact there's a limited market for current affairs shows at that time."

But in Wellington, media strategist Keats says it is a success and adds that Campbell Live doesn't only affect the half hour in which it screens.

"There is that snowball effect that if you don't give people a reason to turn off, you've got the ability to be able to keep them for more of the night."

Winning viewers is a complicated equation, but inertia and the ability to promote upcoming shows to viewers are part of it.

Keats says the programming of the slot reveals a lot about CanWest MediaWorks' mantra.

"They've always been after the money, they've always run lean and mean. They've always looked at each programme as to 'how much revenue will this generate' rather than 'will this put us on number one'."