What you need to know:

• As Nine forges ahead with Stan and 10 has launched Paramount+, Seven is still seeking a subscription video partner, almost two years since announcing $60m of strategic intent.
• But Seven Chief Revenue Officer Kurt Burnette is confident the network will find the right partner and suggests TV networks without the full combination of linear TV, SVOD and advertising-funded on-demand (AVOD) will struggle.
• Consumer behaviour is trending towards on-demand services, but spending hundreds of millions of dollars a a year on an SVOD service “may not necessarily be the right way to do it”, said Burnette.
• He predicts massive pent up advertiser demand will lead to the biggest start to the year for two decades.
• Says 90 per cent of 3m new signed-in Olympics viewers have stuck around on 7plus, with recency and activity more relevant than rival networks touting bigger signed-in audience numbers.

Still looking

Seven months after Seven West Media CEO James Warburton said creating a subscription video on demand (SVOD) platform was a "focus" for 2021, the network appears no closer to striking a deal.

In February, Warburton said Seven had $60 million to bring to the negotiating table with SVOD partners, and a paid subscription platform was "certainly a focus for this year". In November 2019 Warburton said discussions were underway and the network could have a player in market in the "medium term" which he qualified as "about six months". Almost two years later, Seven appears no closer to finalising a deal and in no mood to spend "hundreds of millions of dollars a year" on an SVOD play.

“We continue to look for content partnership opportunities in SVOD with global players and we’ve had several in-depth discussions with various parties," a Seven spokesman said. "Seven is a very valuable partner to a global player and any deal needs to make sense and not be rushed."

The problem is, rivals are making significant headway and the market is becoming increasingly crowded. Seven may not wish to overpay, but risks having to invest more or take lower margin to catch up.

Since launching Stan in 2015, Nine's platform now has more than two million subscribers. Foxtel has more than 3.8m paying subscribers, per News Corp's most recent financial results. Ten launched Paramount+ last month, drawing on content from ViacomCBS while investing in some local programming. Then there's Disney+, Netflix, Amazon Prime. Others majors that may yet arrive in Australia include Discovery+, HBO Max and Hulu.

But Seven has instead focused energies on BVOD, expanding 7plus – with significant results. Since the Tokyo Olympics, it has added some 3m users – 90 per cent of whom have remained active in the weeks following, according to Chief Revenue Officer Kurt Burnette. The network is now using those logged-in audiences in a bid to woo advertisers from rivals selling ads around other sporting rights, such as tennis.

The strategy seems to be paying off – at least in the short-term. “That 3 million is the equivalent of the largest Australian streamer, their subscription base, in 17 days," said Burnette. 

That's true, but then they are not paying a subscription. Nevertheless, the BVOD gains follow a strong prior year. Per the company, in FY2020-21 7plus notched revenue growth of 78 per cent, increased live streaming viewership year-on-year by 186 per cent and its total viewership by 58 per cent.

SVOD alone won't cut it

While Foxtel Media's CEO predicts discount or free streaming platforms will eventually replace linear TV, Burnette said a standalone SVOD platform may not be the most commercially sensible option for Seven.

He thinks networks will need a combination of linear TV, advertising-based video on demand (AVOD) and SVOD to survive in the long-term.

“That is the proposition that is best set up for the future,” he said, adding that the SVOD business is “not an easy business to be in” – even as consumers trend towards on demand platforms.

“You only have to look at consumer behaviour. You can’t defy gravity in that, you see what’s happening. The question is can you make commercial sense of it? Because spending hundreds of millions of dollars a year on an SVOD service – and that’s what people are doing – may not necessarily be the right way to do it.”

The “hybrid” model makes most sense in the short, medium and longer term, he suggested.

“If you don't have a linear broadcast service in there, that's not going to be healthy. The magnitude of [linear] reach is certainly fragmenting – but it is still the fastest and most effective way to get reach in this country and it will be for many years. Is it going to decline? Yes, as it moves to AVOD and SVOD combinations. But if you don't have [all of those three], then your future is not that bright.”

Biggest new year for 20 years?

This week, Seven launched “Kickstart”, a campaign to woo advertisers hoping to capitalise on the anticipated economic boom when lockdowns end on Australia’s east coast. Burnette said the beginning of 2022 was shaping up to be the biggest start to a year in almost two decades. 

“Brands are either trying to hold ground they’ve made or making up a lot of ground they’ve had to pull back because of Covid and shutting stores,” Burnette said.

Olympics sees bloke influx

Of the 3 million new 7plus users drawn by the Olympics, 70 per cent were male, driving the platform's male-female split "closer to parity", now broadly 55-45 female to male, said Burnette, with content decisions now starting to reflect that shift. Overall log-in numbers now stand at 9.2 million.

While the likes of Nine, which is hosting its upfront this week, boasts higher numbers, circa 14 million, Burnette suggested quality and recency are more indicative metrics.

"We added that many additional people into 7plus, so they’re primed, engaged, active," said Burnette. "Everyone can say they’ve got registered users, but if they haven’t been there for ages..."