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What's new? Judging by the audience figures for the network's content so far this year, Channel Ten's cake has failed to rise.

What's new? Judging by the audience figures for the network's content so far this year, Channel Ten's cake has failed to rise.

The consequence of this has been a crunch on Ten's advertising revenue, which has sunk by about 12 per cent, even though the total market for TV advertising is down by about 2.5 per cent in the past 10 months.

You don't have to be a fifth-grader to work out that Ten is losing market share in both audience and revenue.

The sequel to a revenue share decline of this magnitude is that Ten's operating margins have also shrunk to previously unthinkable levels.

The ads on TV don't disappear they just get cheaper for the advertiser.

It's time for the head chef at the Ten Network, James Warburton, to plate up.

The commercial free-to-air television network recently announced it would raise $200 million of new equity capital to repay some debt and to acquire some new programming content.

The debt repayment is straightforward, but finding that magical, winning formula in content-land is a bit like winning the lottery. Channel Nine got lucky with Friends and Frasier, then Channel Seven snagged a winner with Desperate Housewives, which kick-started its revival. Ten has occasionally produced some passable prime-time fodder such as Australian Idol, but like all reality series, the early excitement wore off.

Ten's content revival is looking to move away from what the company describes as a "one bet, one punch" mentality. If that means putting vacuous content such as Being Lara Bingle in prime-time viewing then maybe Ten really needs to administer itself a swift uppercut.

Outlook As a proven commercial television executive, Warburton must be wondering when the advertising cycle is going to turn in his favour. We can confidently inform him it will not be any time soon.

Consumer confidence continues to sag and although the usual coterie of advertisers such as the state and federal governments and the supermarkets continue to top the ad spending charts, there is an extensive malaise dogging this industry.

Finding that all-important compelling content is Ten's quest. Without it, Ten's advertising-dependent revenue model will not deliver the earnings turnaround the company so desperately needs.

The company is also having trouble finding a buyer for its outdoor business, Eye Corp.

Price During the global financial crisis in early 2009, Ten's share price bottomed out at about 60? before recovering a year later to be perched at $1.73. That's very indicative of the sort of recovery that is possible when stocks become oversold.

Since then, it has slipped unrelentingly back to today's level, about 51?, at the capital raising mark.

Worth buying? A select group of billionaires think Ten is worth owning, but it hasn't paid off so far. They have all supported the capital raising, along with institutional investors, probably as a means of averaging down their entry cost. Will it save their blushes?

The catalysts to watch for will be a combination of better programming and a sustained upturn in consumer spending that will release the handbrake on advertising spending. It's a simple recipe, surely?

Greg Fraser is an analyst at Fat Prophets sharemarket research.

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