Network Ten's slump into voluntary administration reflects the impact of "digital moguls" in the entertainment industry, with the broadcaster likely to look to venture capitalists to restore its ailing fortunes, an expert says.
Fusion Strategy media analyst Steven Allen said a big contributor to the recent woes at Network Ten, which was placed into voluntary administration this week, were similar to issues facing free-to-air television at large, pointing to the rise of digital players like Google.
"These digital moguls have stolen all the growth in the marketplace," Allen told the ABC.
"Television has grown minutely once in the past seven years ... It is losing audience but only at a relatively minor rate. But the digital market will take more than 50 per cent of the market share in the coming year."
Poor programming at Ten in previous years was another factor in its descent into voluntary administration, Allen said.
He said while the network had managed to claw back some market share recently, the free-to-air market was shrinking overall, which would leave Ten with ongoing problems.
"It has come to the crunch," Allen said.
Ten this week appointed administrators from KordaMentha to try to recapitalise or sell the business after key backers decided not to support a new funding deal to refinance a $200 million loan.
The network is in a race to refinance with its existing finance is due to expire at the end of the year. Billionaires Lachlan Murdoch and Bruce Gordon, who both have stakes in Ten, are said to be working on a rescue package and financial restructure for the broadcaster.
The solution for the stricken broadcaster was likely to be an injection of capital, most likely from overseas, Allen said.
He said venture capitalists would probably consider the scarcity of television licences in Australia and make a call on whether it was worth backing Ten.
"It comes to venture capitalists, which may be local, there is one or two rumoured locals, but the others will come from overseas.
"They will look at the scarcity of the television licence. They say it might be valued $68 million today but we think it is worth north of that some time in the next 10 years and we have the money to invest to bring this network back to health."
"Its current trading position is not that poor. It will lose about $30 million to its end of year in August but after that, they're projecting profits and increasing profits going out."
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