What you need to know:

• Seven zigged yesterday on its opening upfronts format with hundreds piling into six Hoyts cinemas with simultaneous pre-recorded presentations, each fronted by Seven executives. The roadshow now goes national.
• In a pop at rival Nine, Seven Chief Revenue Officer Kurt Burnette told Cinema Two’s crowd there’s “no smoke machines, no ferris wheels, there’s no fireworks. We get straight to the content and importantly, the strategy that sits behind that content.”
• Former Nine CEO Hugh Marks, now a co-founder of production start-up Dreamchaser, was spotted at yesterday’s event.
• The broadcaster announced “the biggest content deal in this country”, a circa $50m transaction in year one with NBCUniversal International (NBCUi) which sees a new female-skewed under 40 linear channel called 7Bravo launch and 2000 hours of content slated for 7Plus. The broadcaster expects it to deliver “a massive audience uplift” in line with 7Mate for blokes which accounts for 7.4 per cent of its under 40 male viewing audiences.
• Long on the hunt for a subscription streaming partner, Seven could tie-up with NBCU’s Peacock service in Australia. “You would think it puts us in a very good position should they come to this country,” Burnette said when asked by Mi3 on a potential alliance.
• Seven has invested in gaming tech firm, Aura, and will deploy as a second screen engagement tactic for younger viewers
• The broadcaster claimed to be the most “widely distributed” broadcaster across gaming consoles, connected TV apps. As the first broadcaster on PlayStation 5, Seven claimed users have grown 1000 per cent each month since launching in July. Apple TV was one of the broadcaster’s “top three platforms” for 7NEWS – consumption on Apple TV was three times that of Telstra TV, Seven said.  
• It has inked deal with Salesforce Media Cloud and Imagine to automate back end booking and trading system via Code7 – a minimum 30 per cent improvement in administrative and process efficiencies is expected. “What took hours will take seconds,” Burnette told Mi3. It puts pressure on media agencies to respond with less people, more machines.
• Although Omnicom Media Group CEO Peter Horgan hinted at the Nine Upfronts last month that his group could hold back its biggest pre-allocation of TV ad budgets next year for the “float” or spot market trading, Burnette said he’s seen no evidence of that yet in share negotiations for next year.
• Seven Digital sales boss Nicole Bence said she expected more online revenues next year to come via pre-guaranteed annual deals versus the short-term buying that dominates the digital ad sector at present.
• Burnette acknowledged linear TV audiences are declining again but said linear TV remained the “apex predator” for advertising effectiveness and driving business results for brands; he pointed to the US market where advertisers were buying more spots on broadcast formats to reach thinning audience segments.  
• Seven now has 40 FAST channels – essentially curated content bundled around specialist genres and audience interests – and are growing at “triple digit” rates, per Bence.
• It’s deploying the AWS Personalisation engine for content recommendations that makes the digital and BVOD viewing experience “more like Netflix”, said Burnette.
• Media buyers said it was a “brave change of format” from Seven.
• Hoyts CEO Damian Keogh when asked about Seven using the real estate of a rival medium for its upfronts presentation and whether a deal was going down said: “Yes and no”.  No, Mi3 assumes, was to a deal. 

Streamer dreamer

Seven’s ambition to join the subscription video streaming arms race took a new twist yesterday when it announced a sweeping content deal with NBCUniversal (NBCU) that sees another linear channel, 7Bravo, launch and 2000 hours of content landing on 7Plus. Seven said it would deliver a “massive audience uplift” for women under 40. 

"7Mate does a 7.4 per cent share on men 18-39 and we believe 7Bravo will do equal to that Seven share on women 18-39," Seven Chief Revenue Officer Kurt Burnette told Mi3. "So we're bringing new content in to get a new audience and that will then generate a huge amount of content into 7Plus. When we did the deal with NBCU, there's a business case attached to that – we believe there's a massive audience uplift coming."

A likely knock-on from the deal is that if NBCU launches its US streaming service – Peacock – in Australia the broadcaster will pounce on it. 

“This is not an SVOD announcement,” said Burnette when asked about Peacock. “This announcement is about the partnership that we've created with NBCUi to deliver a brand new channel and over 2000 hours of content for Seven Plus. It's not an SVOD discussion but you would think it puts us in a very good position should they come to this country.  [Seven CEO] James [Warburton] has said openly that we're actively seeking an SVOD partner and that remains.”

Burnette and Seven's Network Digital Sales Director Nicole Bence said this year's upfronts program was the "most complete" Seven has done to date.    

"When you line all of those things up around content, innovation, technology, data – this is the upfronts we've been building towards for five years and it's only the beginning with regards to the size and investment of that content and innovation that we are involved in," per Burnette. 

Linear issues

He acknowledged linear TV audiences are again declining after a Covid jolt but said broadening content distribution across its own platforms and other gateways like gaming consoles, Apple TV and Samsung TV – 25 external partnerships so far – is offsetting the pressure on linear audience erosion.

Media buyers have increasing concerns about linear TV's audience declines but Burnette said it remains the "apex predator" for advertising effectiveness and pointed to the US market where advertisers were simply buying more TV spots to achieve their audience targets.

"Yes linear has a declining audience and we would say it's a reset of the base – a large percentage of that reset is off covid," Burnette said. "We've got BVOD and 7Plus growing at 30-40 per cent to help take that audience fluctuation out ... Look at the US, they're having challenges with audiences on linear but people are buying more spots to get their audience away. So we're very conscious of it, I know it's a sensitive conversation, but what it's proving is that people are buying more spots to get what they need to do on television. Are they looking at other areas? Of course they are. They always do every year."

Part of Seven's counter play on linear TV declines is to offer a "horizontal" buying alternative – bundling its digital, metro and regional assets and audiences.

New tech

Other key announcements from Seven yesterday included deploying AWS' content personalisation tech – the same used for the Amazon Prime service – and an investment in gaming tech firm, Aura. "It delivers next level engagement of audiences," Burnette said. "Our content line-up will find new audiences and we can hang on to that new audience through gamification and ecommerce. We've actually invested in Aura as part of our joint ventures."

Another initiative for next year is an overhaul of Seven's back end booking and buying systems, which will take more humans out of the process and free resource up to focus strategy and ideas for advertising partners. "Administrative and process efficiencies will be a minimum of 30 per cent on what we're doing today," said Burnette.  

Late show

Seven's Network Digital Sales boss and IAB chair, Nicole Bence, said beyond linear, forward bookings in digital are holding up – digital revenues have jumped from three per cent to 40 per cent of Seven's revenues in three years, according to CEO James Warburton – and Seven will push next year for a higher proportion of pre-guaranteed deals.

"We're continuing to see really low fill rates," Bence said. "What we're going to be talking to our clients throughout the deal season about is moving away a little bit more from non-guaranteed [bookings] and into guaranteed – and how we incentivise that. There is potentially a little bit of people thinking they can just leave it to the last minute in digital and turn up the on first of the month and find the right audiences. We've seen a lot more demand come over into BVOD in the last twelve months so I think it's starting to bring a little bit more of that thinking ahead."

Bence estimated about 60 per cent of bookings across the BVOD market are pre-allocated versus 40 per cent in short-term trading. 

Scatter this

As all the broadcasters now head into negotiations for next year with media buying groups, Burnette downplayed any ominous threats to the outlook for next year. OMG CEO Peter Horgan hinted last month at the Nine upfronts that his group might hold more client budgets back from pre-commitments for 2023. "We're finalising the briefings from clients and agencies...we haven't seen anything like that yet," said Burnette. "If you had been holding money back to get into the back quarter of this year, well, good luck with that because that would not work out well for anybody.

"We've heard this for different reasons over the years and I guess the market will dictate that. We're prepared to deal in any way that people want to deal with us. But clearly if you're holding money back and you want to come in short term, you don't get all the opportunities that are provided upfront. We're providing greater incentives for those that do come in across metro, regional and digital because we want to reward people for well,doing the most effective thing."

What the buyers said:

Aimee Buchanan, CEO, GroupM

"They've got a great content line up that speaks for itself. Good foundations plus great new line-up will attract audiences. Played it with a straight bat and were unapologetic in their focus on strength of content."

Bianca Falloon, General Manager, RyvalMedia Sydney:

"7plus and Bravo is a bit of a no brainer given Netflix, Disney, and we saw Binge at Foxtel the other week, so that’s going to be a really good commercial opportunity for everybody… Content is still king, obviously, and that’s what attracts viewers and audiences. But the presentation was a little bit light on the tech."

Lucy Formosa Morgan, Managing Director, Magna Global [Mediabrands]

"Seven didn’t need any fireworks for their up-front. They put on a very slick presentation in a relatively understated way, big on information and big on new news. For me, the big announcement was the NBC partnership and imminent launch of 7 Bravo, which will complement Seven’s linear channels and digital offering, and provide them with increased inventory across the whole year, for all platforms.  It’s a great coup for the network. "

"7Bravo aside, the up-front focused on Seven’s strength and breadth of programming (new and returning) and the reach / targeting capabilities they can offer advertisers across both digital and linear. In terms of the new programming, you can always count on Seven to test new formats and they’re continuing with that strategy next year too.  There were a few new programmes that felt a bit copycat to other formats on competitor networks e.g. Million Dollar Island and Blow Up but that doesn’t necessarily mean they won’t perform well. The new content covers a variety of genres (live entertainment, comedy, drama) which will appeal to different audiences too." 

"As we’ve heard from each of the networks so far this up-front season, their reliance on linear ad revenue is declining at speed, as their digital businesses continue to grow share and that’s not surprising when you look at how viewing behaviour is evolving, particularly on the big screen in the lounge.  Gone are the days of viewers only watching TV on the big screen and BVOD/streaming on their mobiles. There’s a real blurring of how content is consumed. People are growing increasingly more comfortable switching seamlessly between linear, live streaming (via app), BVOD and SVOD on their connected TVs, so it’s going to be another tough year for linear viewing. It’s also going to be a far more competitive playing field next year with the likes of Netflix, Disney+ and Binge - and who’s to say Paramount and Stan won’t follow suit – all chasing TV and BVOD dollars with their ad supported models launching over the coming weeks and months."

Kristiaan Kroon, Chief Investment Officer, Omnicom Media Goup

"They led with purpose, they were the only ones to lead with purpose. That, for a lot of clients, will be increasingly important this year. A very strong partnership line-up across content, tech and data. You’ve got NBCU, Amazon, Visa – all very good. Now we've seen all four and they've shown really different approaches to engaging with advertisers for 2023. As negotiations start, we're also seeing a much wider range of sales strategies amongst the four which I think is going to set next year out for much bigger winners and much bigger losers than we've seen in recent years… Upfronts absolutely affect marketeer and agency perspectives on who’s the best of the four to partner with into 2023. Overlaid on that is then what’s the commercials. Particularly for linear TV, what’s the level of inflation, and what we’re seeing is a really broad range of approaches. Much broader than in previous years."

Peter Vogel, CEO, Wavemaker

"It is all about the content. There are no bells and whistles, Kurt said it up front. But they’ve got great content and it’s underpinned by the genres that people watch live: News and sport. Their news product is superb and they’ve got all the big Australian sporting codes wrapped up. Having that form to launch is really good. And then yeah, they’ve got solid, tried and tested programming. And it is. It’s about trying to keep the audience before and after the news. I think Bravo, again. It is content focussed and trying to find something that is suited to everyone in Australia. Bravo, not my thing – reality TV."

Craig Cooper, Chief Investment Officer, Carat [Dentsu]

"There was a real focus at this years’ Network 7 upfront on content that will resonate with heartland Australia. 7 did shine versus competitors on real world action in the ESG space – evidenced with their charitable fundraising activities, as well as a new partnership with Planet Ark. 7 West are in a unique position with full ownership of their MTV, RTV & digital platforms – and edges them closer to a true national audience. Was interesting to hear from Kurt in regard to clients switching or skewing between MTV & RTV since the merger, and perhaps further insights here could help readdress balance between the market geographics. The Kath & Kim 20-year reunion special is a standout announcement from Network 7, and brings with it a sense of nostalgia and hopefully also introduces a whole new generation to the Australian icons. 2023 will see Network 7 scheduling the three biggest reality performance shows, being Idol, The Voice & AGT - time will tell if Australian consumers will start to feel wear out in this genre."