ONE AND MULTI-CHANNELLING

Network Ten was well prepared for the advent of multi-channelling, from both an operational and strategic standpoint. In March, we became the first free-to-air commercial network to offer a new digital multi-channel, the 24-hour sports NETWORK channel, ONE.

ONE was launched successfully on our stable digital broadcast architecture and, strategically, we were able to secure 'first-mover' advantage with the choice of an attractive genre that provides clear differentiation with the TEN main channel.

Sport has been proven worldwide as a driving factor in the take-up of digital television, there is a strong supply of high-quality digital content - with a number of sporting codes taking the opportunity to move to free-to-air commercial TV - and a large and passionate audience among Australia's sports lovers. With our choice of sport, we were able to develop clear marketing and sales strategies to create awareness and to position the channel with viewers and advertisers.

While sport is particularly well suited to high definition digital, ONE is available in both high definition and standard definition digital, giving it a far greater reach. ONE has reached more than 6 million people and over 44 per cent of households in our five-city metropolitan markets. It reaches more than 2.3 million people every week, which is higher than the combined reach of Fox Sports 1, 2 and 3.

Its strong reach and appeal to viewers in a highly popular genre has resulted in ONE being well supported by the market - even before its launch - with a number of principal sponsors signing up to present their brands to ONE's distinct audience. In addition to these sponsors, ONE has attracted a range of advertisers for key events and sporting codes, as well as a number of group deals with key media buying agencies. Negotiations with further channel and program sponsors and advertisers are ongoing.

This advertising spend enhances the revenue to Network Ten - including the addition of some new advertisers to the Network - and allows ONE to achieve profitability in its first year of operation.

ONE is already becoming a fixture in people's daily TV viewing and, as more people trial ONE and inevitably greater levels of digital take-up occurs, the audience will continue to grow.

The combination of TEN and ONE - with their distinctive content offerings, formats and targeted audience groups - is now providing real choice and diversity for our viewers and advertisers. It also supports the aims of Freeview, the initiative of the Australian free-to-air networks to encourage Australians to switch from analogue to digital television.

With our three digital broadcast streams in place (two in standard definition and one in high definition), we look forward to making an announcement about a third digital channel in the year ahead.