Seven CEO James Warburton: “Television Is An App Store & We Can’t Compete With Global Players”
Seven’s outgoing CEO James Warburton has shed light on the exorbitant costs that local TV networks have to pay to feature on smart TVs.
Speaking in front of the Senate’s Environment and Communications Legislation Committee today, Warburton said that creating and updating the software to appear on each different app store costs around $1 million.
This equates to about “$21 million” in costs overall, Warburton said about all of the apps on the market.
He confirmed that Seven has paid for “some locations” on the apps in the past but they were often outbid by global players when it came to securing the top spots.
On average the network pays around 10-20 per cent to be on the apps, he said.
“Television is an app store,” Warburton said, adding that Seven “can’t compete with the global players”.
The commercial TV executives are appearing today alongside Free TV Chair Greg Hywood and CEO Bridget Fair before the Environment and Communications Legislation Committee to call for the prominence and anti-siphoning bill to be strengthened.
In an earlier segment, SBS’s James Taylor and the ABC’s David Anderson made a similar case, revealing that the manufacturers of Australia’s best-selling smart TVs had sent them letters demanding revenue shares of 10-30 per cent to appear on the app.
When quizzed by Senator Ross Cadell, Nine’s CEO Mike Sneesby said that the FTA networks were arguing for prominence on the apps.
“Viewers would be able to remove us if they choose,” he added.
Retrospectively, not having that prominence has “cost us a considerable amount of our audience over time” Sneesby said.
“People tend to stick with the default.”
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