Fairfax merger plans v reality of taking over

With everything there are always some surprises, but the really positive thing is that the businesses we thought would be part of the core business is performing better than we expected – not only on costs but also on revenue.

Already there are synergies from working with Nine with joint approaches to market and joint sales deals. It has gone better than anyone could have anticipated and we are seeing the results already.

Confirmation of asset sales: Events, Stuff & ACM

Current trading conditions won’t impact the sale price. We have built a long term plan for each of those businesses with the local management. Those models show underlying profitability and cash flow over the midterm and it hasn’t changed our view on the values.

The assets for sale don’t need group synergies

New Zealand is very much a separate business that relies very little on head office. ACM has been a little more integrated into head office, but Fairfax has been talking about disposing of the business for some time and a lot of that work had already been done. There will be some interaction between us and ACM in the future with printing.

Events too is ready to stand alone and able to do so.

Timeline for asset disposal

The processes are all in place. With Events we are close with some final parties, ACM and Stuff the interested parties are in due diligence over the course of the next month. I am anticipating trying to close those deals if possible by the end of financial year. That is subject to receiving offers we think represent fair value for our shareholders.

The new look Nine is less reliant on broadcasting revenues

That is the merger playing out. It is the contribution of the Fairfax businesses, Domain, the growth of Stan and the digital and publishing business. A lot of people regarded the merger as an old television and an old print business coming together. We do have a broadcast business, but the other 50% of the business is in growth. The most difficult thing to communicate is when people have a perception about a print business, but the reality is completely different.

Are we seeing the start of television revenue disruption?

The underlying TV business impact is not structural, it is cyclical. It is related to a perception of house prices and the economy and a weaker consumer market. We are trying to get away from being measured as just a FTA business.

Move from cricket to tennis on Nine

The evidence is in the numbers. Our TV audiences are up 5% YOY from January 1 to now and that coming in a market that is disrupted is an outstanding result. Part of that is the contribution of the tennis and the lead-in it gave to our regular season programming and part of that is our regular season programming.

Not only Married At First Sight, but a lot of the shows around Married At First Sight. Things like Travel Guides, Bad Mothers and our factual series Murder, Lies & Alibis.

Have you been concerned about some of the MAFS content?

I occasionally get involved in content discussions. I like to watch the shows go to air as a viewer. We need to look at the long term value of that show. Fundamentally it is about love and I thought the balance between some of the drama and the truth of the show being about love – we need to maintain the balance over the long term for that franchise. That drama has created audiences, no doubt about it looking at the growth. I just wanted a bit more balance.

Has Stan had a good summer?

Good is underestimating it. There is room for growth still too. The market potential is about 10m subscriptions and our aim is to get at least 30% of that market.

The team at Stan have done a great job to get the right programming mix for individuals as well as family viewing.

Is much of your BVOD growth money moving from broadcast?

It is hard to answer that completely as we don’t really know. It is a different market though and we are getting a price rise because it is an addressable market.

People regard us a television business, but we are a content business. How we invest in our content is the business. We have multiple platforms for distribution and we decide where to invest in content based on the return.

Content can have a long life. Look at a show like McLeod’s Daughters, it still wrote $1m revenue for us in BVOD over summer. And that is for a show from 20 years ago. While your overnight ratings are relevant, the real measure is what a show can do over many years. That is how we judge on where we should spend our money in the business.

Coinciding with the first half results today, Nine CEO Hugh Marks had an upbeat message sent to all staff:

This morning we updated the market on our results for the first half of the 2018-19 financial year. As you are no doubt aware, these are our first financial results since the merger and I’m pleased to say that in a challenging advertising market our revenue has remained stable and we have lifted our profitability.

The merger has fundamentally changed our revenue profile. A year ago, in our half-yearly results, 86% of Nine’s revenue came from broadcasting. Today that figure is 54%. Why is that important? Not because broadcast won’t continue to be the great business it is today, but because we’ve invested in a broader business that as a whole will grow. Using the breadth and reach of broadcast to help grow our other businesses. Investing for the future in the content mix that will retain our fundamental connection with audiences. Enhancing the digital profile of our business for the future.

I would like to draw out a few key highlights from across various parts of the business:

• In our television business we have achieved a 39.3% share of revenue for the half, a fantastic result for both the content and sales teams, especially absent the cricket.
• 9Now has achieved 50% revenue growth and continues to be a dominant force in the Australian broadcast video on demand (BVOD) space with 47.5% market share.
• Metro publishing has had an amazing half: increasing readership and lifting revenue and EBITA from $25 million in H1 2018 to $39.5 million in H1 2019, a result which shows how well this part of the business is performing.
• Domain has achieved impressive yield growth in a challenged listings environment. Achieving a pretty much flat result in a cyclically tough market, which is impressive.
• Driven by new Australian content and strong summer programming, Stan has reached an important milestone of about 1.5 million active subscribers and we expect it to be profitable from Q4 of FY19.

More broadly, on behalf of the executive team and myself, let me thank all of you for your hard work over the past few months, especially in the wake of the merger. I know many of you have worked hard to ensure that we did not miss a beat, and I hope you can see by this result that our business is in strong financial shape as we move into a long-term growth phase.

Nine today is a media business with a number of key media investments (across television, publishing, streaming and classifieds), which are working and will continue to work closely together and add value to each other. At their heart, most of these businesses have one simple mission: to create great content (be it entertainment or journalism), to distribute it broadly, and to engage audiences and advertisers.  

You can see the results of this in a variety of recent examples across the business: the fantastic coverage by Wide World of Sports of the 2019 Australian Open; the stellar ratings for Married at First Sight, which has captured the national water cooler conversation; and in the publishing business where The Sydney Morning Herald and The Age have recently launched a new subscriber drive (which you can see today in the streets of Sydney and Melbourne) built around the power of their journalism, using the marketing line “You Deserve To Know”. It comes after a strong January, which saw the highest uptake of new digital subscriptions for those publications on record.

The coming months will see further changes to our business as we look to divest certain assets, such as Australian Community Media, Stuff NZ and Events. Let me again reassure employees in those businesses. We are talking to interested parties who see the future potential of each one, who are prepared to invest, to realise the potential in a way that Nine could not, due to limitations as a public company. This will help to set each of those businesses up for their next cycle.

Change is a constant in the media business, but as you can see from both our audience and financial results, the merger is already paying dividends and the fundamentals of our business are not only strong but creative, innovative and world class.

Commissioned by News Corp Australia and conducted by market research agency Direction First, the study examines what healthy eating means to Australians today and the impact that eating habits are having on consumers’ health.

News Corp Australia’s director of lifestyle Fiona Nilsson said: “We have never needed more help with healthy eating. Fundamentally consumers are not meeting the nutritional requirements on a day-to-day basis, and Australians are confused about what we should be eating and what a healthy diet looks like.

“As a result, obesity and associated chronic illnesses are on the rise. The consumer need for education and help around healthy eating has never been as important as it is today.

“Hence why we have undertaken this crucial new study, it was designed to not only help us ascertain what’s important to our audiences and content, but also to help our commercial partners create solutions for, and to connect with consumers.”

Fiona Nilsson, Director of Lifestyle, News Corp Australia, Michael Miller, Executive Chairman, News Corp Australasia, Brodee Myers, Editor-in-Chief, taste.com.au

Recipe For Health key finds

• When it comes to defining healthy eating – it is considered a top priority by most Australians, however there is a lack of understanding of how it can be achieved on a day-to-day level.
• Perception vs. Reality – With respondents over-estimating the health of their diet by almost a third there is a clear disconnect between what consumers think encapsulates healthy eating versus what a nutritionist views as healthy. Consumer awareness and behaviour is not aligned with the science of healthy eating.
• What’s stopping us? – The study identifies the psychological biases that exist deep within a consumer’s psyche as well as the practical barriers preventing them from eating healthily.
• Behavioural science is the key to understanding how to overcome the barriers and drive lifetime habits. The study reveals the formula to drive behavioural change – and how brands can employ this to help their consumers. Fundamental basics were identified to put consumers on the road to healthy eating, including 78% of respondents stating that the first step in getting healthy is cooking at home.

The impact of media. Media is a catalyst for trial and influencing change amongst consumers and the study looks at the media consumers turn to. Ultimately trust is the key in helping people navigate through the health media landscape and furthermore consumers are calling for a more positive and supportive healthy eating narrative.

Taste.com.au editor-in-chief Brodee Myers said: “Healthy eating is one of the biggest trends we’ve seen over the last few years, however despite unprecedented interest and engagement in healthy content, the results of this study provide a reality check on Australians’ eating habits.

“It’s time to get real about healthy eating. We have a strong and genuine intent to help Australians achieve the healthy change they want to make and to demonstrate the depth of our commitment taste.com.au is making a pledge.

“In supporting the health of all Australians, taste.com.au is pledging today that no less than 50% of all content created by taste.com.au will fit within the Eat Real paradigm of real healthy eating for real people.”

Taste.com.au’s Eat Real launched in early 2018, designed to bust food myths, change perceptions, and prove once and for all, that healthy eating can be easy, low budget and your family’s favourite dinner.

One year on and Eat Real has exceeded all expectations. It’s now an entire ecosystem that includes its own podcast, range of cookbooks and a dedicated taste.tv series. It is also driving traffic of 10 million page views a month.

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Top Photo: Dr Nick Fuller, Charles Perkins Centre, The University of Sydney and author of Interval Weight Loss For Life, Fiona Nilsson, Director of Lifestyle, News Corp Australia, Brodee Myers, Editor-in-Chief, taste.com.au, Maia Bryant, Marketing Content Manager, Brand and Comms, Coles, Lola Berry, nutritionist and author Shane Delia, chef, author and TV host

SCA has reported these highlights of the group’s results:

• Underlying EBITDA grew 6.1% to $82.9m and underlying NPAT grew 10.6% to $42.2m. Group revenue was up 0.2% at $335.7m, while expenses were back 0.6% on the prior corresponding period. Excluding restructuring costs of $2.8m, expenses were back 1.7%.
• The Audio segment (comprising metro and regional radio and podcasting) performed strongly, delivering 3.8% growth in revenue and 7.3% growth in EBITDA.

Metro radio revenue was up 6.7% to $123.6m, propelled by improved ratings, monetisation of digital radio stations and a continued focus on premium selling.

Regional radio revenue was up 0.7%, supported by the ongoing success of the group’s initiatives to attract additional national revenue to regional markets.

National revenues in regional radio markets were up 9.2%.

• In a challenging market, television revenue was down $8.0m or 7.1% to $104m. About $4m of this was due to Nine no longer broadcasting cricket. The combination of SCA’s radio and television assets in regional markets enabled it to outperform the market.
• The quality of SCA’s earnings is shown by the 97% conversion of those earnings into free cash.
• SCA’s balance sheet is healthy with reduced debt, lower financing costs, significant covenant headroom and strong cash conversion.

Southern Cross Austereo CEO Grant Blackley commented:

“SCA’s strong Audio result was driven by continued growth across metro and regional radio and the emerging podcasting sector. SCA outperformed in each sector and strong and disciplined cost controls were evident. Audio revenues grew by 3.8%, while Audio expenses grew by just 2.1%.

“SCA’s unique strategy for aggregating its FM and digital radio station audiences in metro markets continues to provide additional value for advertisers and a sustainable competitive advantage over commercial radio peers. The most recent survey in December 2018 showed that SCA’s digital radio stations had 397,000 listeners, providing advertisers with 8.4% greater reach. Coupled with improved ratings, this strategy saw revenues rise 6.7% in metro radio revenue in the half.

“SCA was rewarded during the half for ongoing proactive steps taken to educate national advertisers about the benefits of advertising in regional markets. National revenues for regional radio were up 9.2% on the same period in FY2018 and up 22.0% on the corresponding period in FY2017. SCA’s trade marketing and education campaign will further expand in the coming months.

“PodcastOne has consolidated its position as the leading premium commercial podcast business in Australia and will shortly pass 100 million downloads since launch in August 2017. With commercial interest continuing to grow, the business will now expand into branded podcasts to unlock new revenue opportunities.

“SCA’s new national structure and workforce planning initiatives are starting to pay dividends. The streamlined business and decision-making processes are delivering operating efficiencies and improved cost control.”

Outlook for full year 2019: Jan-Feb up year-on-year

SCA has entered the new year with a stable portfolio of leading radio show formats across the group’s national footprint.

January and February trading is slightly ahead of the previous year, with Nine’s tennis coverage contributing positively to the January result for Television.

The growth in Audio revenues in the first half, generated by improved ratings, increasing digital radio audiences and further investment by national advertisers in regional markets, has provided a baseline for the second half.

Advertising markets are trading shorter than normal ahead of the Federal Election. Increases in election-related spending are to be expected and may be partially offset by reduced spending in other categories.

Adam Shand’s Jailhouse Lawyer

“It involves a very well respected member of the Melbourne underworld who was walking the line between the Carl Williams faction and the Carlton crew. He found himself framed for a crime he didn’t commit and he got 13 years. He faced betrayal from Carl Williams and was about to get another 10 years.

“Rather than be bitter and twisted and hate the world, he dedicated himself inside jail to helping people with their legal matters. People who can’t write to their parents or who wanted to visit elderly parents.

“It’s an amazing story. When he got out in November 2017 they wanted to put him back in again for pretending to be a lawyer, which he never did.

“We investigate a lot of the Melbourne gangland DNA and people and stories we are familiar with.”

The new series is two 40-minute episodes.

Shand told Mediaweek that he is planning some more interview-based real crime stories to be released during 2019.

Also watch out for Adam Shand on Nine’s new series of Australian Crime Stories.

Listen to Jailhouse Lawyer here.

Listen to Adam Shand talking about Australian Crime Stories with The Full Box co-founders on a Mediaweek podcast here.

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Richard Glover is Nigel Marsh’s latest guest on 5ML

The Five Of My Life (5ML) podcast was a new and fascinating twist on the standard celebrity interview when author Nigel Marsh launched it on PodcastOne late in 2018. Since launching with Todd Sampson six months ago, Marsh has now released 13 podcasts where he asks his guests to talk about their favourite film, book, song, place and possession.

“I didn’t want to be just another host talking to celebrities,” Marsh told Mediaweek. “I didn’t want to recap people’s careers or promote their albums or books. I ask my guests for their choices a week before the interviews so I can research and see the film and read the book.”

The most recent release is his chat with author and ABC Sydney host Richard Glover. Coming soon is MasterChef judge Gary Mehigan.

“The content is driven by my guests because of what they choose. The choices have to lead to a different part of their life. It also gives the guests a chance to portray themselves in a way they would like to be portrayed.”

The podcast is not only a journey of discovery for the listener, but Marsh too. He is often pleasantly surprised by some of the celebrity choices. One of Osher Günsberg’s selections was the movie Harold And Maude. “I had never heard of it before. I was sitting down and watching going, ‘WTF. This is hilarious’.”

Listen to The Five Of My Life here.

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New SBS release from Marc Fennell and Jan Fran

In a new SBS podcast series, prolific journalists and TV hosts Marc Fennell and Jan Fran are promising to dig deep into challenging social issues and introduce listeners to bold, ambitious people advocating for change.

SBS released this information about the podcast:

The Few Who Do will launch on Friday 1 March 2019, with 16 episodes released fortnightly until October. Perfect for the daily commute, each episode of The Few Who Do will be 25-35 minutes.

SBS celebrates diversity and encourages thought provoking discussions on the world today.

In each episode, Jan and Marc will find out what it takes to be fearless. They’ll speak to everyday Australians, asking tough questions on a broad range of topics from transitioning in the workplace to dystopian futures, and how to create change in the data and entrepreneur space.

Jan Fran said:

“Every day, Australians face challenges and problems too complex for an obvious solution. Every fortnight, The Few Who Do will tackle these topics and explore possible outcomes. I’m very much looking forward to meeting some extraordinary Aussies who are working hard to make this world just that little bit better. I’m absolutely not looking forward to spending more time with Marc Fennell.”

Marc Fennell said:

“Jan and I have sustained a blood feud for many years while hosting The Feed. I’m grateful that SBS has provided us with a constructive activity like The Few Who Do to channel our deeply unhealthy competitive urges. I’m looking forward to introducing Australian listeners to incredible people advocating for change. We want to bring attention to pressing social issues and showcase people who are tackling problems.”

The podcast series will debut with an episode on affirming gender in the workplace, to coincide with Sydney Gay and Lesbian Mardis Gras 2019. The episode will explore the challenges that arise when trying to navigate employment after transitioning.

It was brave of Today to put two women at the helm but its viewership is now at a 13 year low. Dancing With The Stars also mixed with the traditional male/female dynamic by getting Amanda Keller and Grant Denyer to share co-hosting duties. It was a slick opening night but coverage zeroed in on its average ratings and nasty new judge. Darling, soooo predictable.

Meanwhile, Nine are furiously denying reports about “secret” focus groups that Today’s biggest problem is viewers dislike Georgie Gardiner. Last weekend, she was copping it for being blonde because everyone else on TV is blonde too. So is this story all about Georgie now? Are we finally over Karl and Lisa? Can’t wait to see who those “network insiders” and anonymous “sources” come up with next.

Despite I’m A Celebrity getting renewed for 2020, one newspaper bagged it endlessly, even referring to it as a “problem child” the network was “giving up” on. What 10 appears to have given up on though is flying newspaper reporters over to Africa in return for glowing and positive stories. And what stories there were too, like the time one chap ate ostrich anus just like all the celebrities! Good times…but where is the love now for all things offal?

Should we be grateful the media can even find time to cover other shows, given their current fascination with Married At First Sight. It is the talk of the nation but did MAFS jump the shark when the “lesbian” deflowered the “virgin”? Relationship counsellors and mental health experts have always criticised this show, but now former participants – and current ones too – are speaking out about the show’s methods. Are those who go on MAFS somewhat unhinged to start with, or is it the “social experiment” that pushes some over the edge? Or should we be applauding their work given it could actually be brilliant improv?

MAFS is silly fun for some and a car crash for others, but surely it is the last show we should use to represent Australia overseas. The Federal Government wants to beam “a variety of programs available on commercial networks” into South Pacific nations and “drama, Australian comedy and Australian documentaries” would be great. But “Australian reality television programming” like MAFS and MKR? How would that be “useful and valuable” to citizens in Papua New Guinea or Nauru? Sounds like there good be better value in commercial networks charging more for in-show advertising if they get a wider audience. Come to think of it, that extra audience might help out Today too.

Thursday: Week 8 2019

By James Manning

FTA TV news/current affairs

• Seven News 884,000/851,000
• Nine News 817,000/817,000
• A Current Affair 678,000
• ABC News 655,000
• 7.30 555,000
• The Project 200,000/365,000
• 10 News First 326,000
• SBS World News 111,000

Breakfast TV

• Sunrise 299,000
• Today 204,000

Seven

Home and Away fans got three episodes last night with an average audience across the 90 minutes of 577,000.

Australian drama then took over with the debut of Ms Fisher’s Modern Murder Mysteries with 463,000 after 8.30pm. The first of the four telemovies from Every Cloud Productions trailed the audiences of Gogglebox and Escape From The City. Asking viewers to watch for two hours until 10.30pm on Thursday is a fair ask. However the show was the clear leader in its slot after Gogglebox ended.

Nine

A Current Affair dipped under 700,000 for the first time this week with reporter Lauran Golman in San Francisco reporting on the new Samsung Galaxy launch. She even took the new mobile device to the Golden Gate Bridge for a camera test.

Two episodes of Young Sheldon followed with a new ep on 531,000 and a repeat on 471,000.

Our TV guide then indicated the movie Gladiator would be shown after 8.30pm.

However a programming change saw the new series of Australian Crime Stories debut with Adam Shand telling viewers about the Lucille Butterworth story. The series opened up with 279,000, trailing the other shows in the slot. Don’t miss next week’s episode, which looks into the Kerry Packer 54 Park Street gold heist.

10

The Project dropped below 400,000 with Rove co-hosting ahead of the new timeslot for Show Me The Movie! taking over the slot from Changing Rooms last week.

Movie did 289,000, down on the 298,000 the second episode of Changing Rooms did. Rove’s show was up on its 218,000 from Friday last week though.

Gogglebox was then a timeslot and demo winner with 650,000 after 566,000 a week ago. The Goggleboxers got to deliver their verdict on former Goggleboxers Angie and Yvie in the jungle. “They really are best mates,” said Adam and Symon. “Not fake best mates like us!”

ABC

The Adelaide Hills was the seachange destination last night on Escape From The City with 477,000 after 446,000 a week ago.

Grand Designs Australia then did 352,000.

SBS

A repeat of Inside Kensington Palace featured the usual suspects and some awkward dramatisations, yet it drew the channel’s biggest audience of 264,000.

Secrets Of McDonald’s then did 187,000 indicating people are much more interest in Cadbury’s secrets (shown on Wednesday on SBS) than the maker of the Big Mac.