While TV executives watched with interest the final spin of the barrel in the game of Russian Roulette between Nine Entertainment's secured creditors, its management and Goldman Sachs over the future of the network, they also pored over the ratings of the six-time Emmy award winner Homeland, which screened on Ten Network last night.
As feared, ratings for the premiere of the second season came in well down, at 630,000, compared with about 1 million during the first season.
This, coupled with media speculation that CHAMP Private Equity had concerns about the performance of Ten's outdoor advertising business Eye Corp, resulted in the share price falling more than 4 per cent to 35¢, putting it on a market cap of $510 million. While Ten issued a statement that sale "discussions remain ongoing" the market appeared unconvinced.
The huge audience drop for Homeland raises serious questions about the challenges facing traditional TV. The brutal reality is this: content that has screened in other parts of the world is increasingly subject to online piracy and other bypassing platforms such as iTunes, DVD and websites that allow internet browsers to get around "geo-blocks" on content.
More and more Australians are signing up to US iTunes accounts to download shows from the US. They buy US iTunes gift cards on eBay.com and use them to buy content from the US iTunes store, which has US shows' day and date. Others set up a US IP address to access Hulu, which provides TV shows for free. The IP address tricks the Hulu site into thinking that you are in America and therefore entitled to see the content.
These shows are always without the ads and can be watched at any time, rather than at a time dictated by the TV stations.
The traditional TV model is under attack, particularly with regard to big output that is already running in the US. Although Ten fast-tracked Homeland, it wasn't fast enough. The US is already a number of shows ahead and with so much illegal downloading going on, Homeland was just the latest example of the effects.
TV stations and Foxtel have been trying to resolve this by bringing forward screenings to tie in closer to US premieres, but even a few weeks' delay is having an impact on internet downloads.
This year Foxtel in particular has launched an aggressive campaign of fast-tracking content under the banner "Express from the US" in an attempt to create a clear point of difference in the market.
It is fast-tracking more than a dozen shows with new episodes of Sons of Anarchy and Boardwalk Empire airing within hours of their US broadcast.
Two new US series – 666 Park Avenue and Revolution – are airing on Foxtel within 12 and 36 hours, respectively, of their US broadcasts.
Ten's strategy is weaker – and is yielding softer results.
New episodes of New Girl are being broadcast 10 days after the US, but are launching to fewer than half a million viewers nationally. Likewise the dip with Homeland.
For Ten in particular the challenge is trying to create results while fast-tracking in a measure of days as rivals such as Foxtel fast-track within hours.
Seven is planning to fast-track new episodes of The Amazing Race, Grey's Anatomy and Once Upon a Time, but like Ten it will schedule them days after their US broadcast, not hours.
While there is no qualitative data from broadcasters around the world on whether there is a significant commercial imperative to fast-track content, anecdotally it seems broadcasters net the best result when content is turned around within 24 hours.
But TV is also under siege globally with the rise of internet protocol TV. In the US, recent figures from Comcast reveal a drop of nearly 400,000 TV subscribers in the past year, while Time Warner Cable lost 169,000 residential video subscribers and DirecTV reported a loss of 52,000 subscribers in the second quarter.
This is a frightening trend and is more serious than if viewers started cutting subscriptions to pay TV in Australia because in the US free-to-air TV has to go through cable, so if people are deliberately cutting their cable subscriptions they are cutting off from TV.
With Nine under siege, Ten's share price tanking and Seven's share price also under the pump, it is becoming increasingly difficult to put a prospective valuation on these businesses.