Nine Entertainment Co has released its H1 FY20 results for the six months to December 2019.

On revenue of $1.2b, Nine reported Group EBITDA of $251m, and a net profit after tax of $114m. Post specific items, the statutory net profit was $102m. (The numbers are stated excluding discontinued businesses.)

Highlights from the results presentation:

• Strong growth from digital video businesses
• $35m EBITDA improvement at Stan, with subscribers exceeding 1.8m
• 65% growth in EBITDA at 9Now, with market leading BVOD share of ~50%
• Further investment in 9Now to accelerate growth into the broader digital video market
• Broad based ad market weakness including a 7% decline in Metro FTA revenues
• Synergies of $9m identified following completion of the Macquarie Media acquisition

Hugh Marks, chief executive officer of Nine Entertainment Co said: “This result is a testament to the work we have done over the last four years to reposition Nine for a digital future. With strong growth in our digital businesses helping to offset some of the cyclical headwinds faced by our traditional media assets.

“We have now clearly established Nine as the leading domestic player in the digital video market with both 9Now and Stan recording very strong growth in the period. Growth that we expect to continue into H2. We have successfully unified our first party database across all of our owned and controlled businesses, meaning we are in a position to offer our partners the benefits of more targeted advertising across the Nine suite of assets.

“Recognising this company-wide evolution, we believe there is significant potential to refocus the cost structure of our FTA business, targeting the removal of up to $100m in annualised costs over the next 3 years – costs that will not inhibit our ability to continue to invest in the growth opportunities around premium revenue and digital video, as we have done successfully over the past three years.

Nine TV business

Nine Network reported a revenue decline of 6%, from $564m to $531m for the half. Reflective of a very difficult overall advertising market, the Metro FTA ad market declined by 7% . Nine’s Metro FTA share of 38.7% was marginally down on pcp and was disappointing in light of Nine’s strong ratings performance.

In 2019, Nine recorded its strongest year in OzTAM history. For ratings season 2019, Nine was the #1 network and primary channel in all key demographics. Nine attracted a commercial network share of 39.4% of the 25-54 demographic, up 3.2 pts on pcp. On a primary channel basis, Nine’s share of the 25-54s was 40.5% , up 3.9 points, and 8.6 share points ahead of its nearest competitor.

In the December half, Nine also won all of the key demographics .

Ex the impact of AASB16, FTA costs rose by 6%, or $25m. This reflected the one-off broadcast of the UK Ashes and World Cup Cricket ($16m) as well as a contracted $8m increase in NRL rights costs. Full year costs are expected to be up by around 2.5%, equating to a slight reduction in the second half.

In a BVOD market which grew by 43% for the half to $87m , 9Now held its share ~50%, for revenue growth of 44%. Users and engagement continued to grow with long form VOD minutes increasing by 31% across the half on pcp, and live streams up by 137%. 9Now increased its EBITDA contribution from $16m to $27m, up 65%. 9Now will continue to invest in incremental content to further expand its position in Australia’s fast-growing digital video market.

Radio revenue impacted

Acquisition of the minorities in Nine Radio (previously Macquarie Radio) was completed in November. For the six months, revenue was down by 16%, to $58m, reflecting both the slower metro radio ad market (down 9.7% for the half) as well as well-documented issues specific to the Macquarie business. Notwithstanding a slight cost decline, Nine Radio reported EBITDA of $8m.

Since taking full ownership, Nine has made significant changes to its Radio business – consolidating back-office functions, sales and news into Nine and reformatting the loss-making Sports Network. Coupled with continued audience strength, this should underpin leverage when the ad market improves.

Metro Media digital ad revenue up 10%

Metro Media reported flat revenue in a challenging ad market. Share gains in print offset part of the ad market weakness, while Digital (subscription and advertising) revenues grew strongly. On average, double-digit growth in digital subscriptions across The Age, The Sydney Morning Herald and The Australian Financial Review reflects the reweighting of the business to both the digital platform and consumer revenue.

Digital advertising revenue growth of 10% was underpinned by growing premium audiences across all mastheads, as well as the benefits of being part of the broader Nine Group. Excluding the impacts of the Weatherzone sale and Events inclusion, Metro Media costs were down by 8%, consolidating previous cost initiatives.

Stan subscriptions up to 1.8m

During the half, Stan grew its active subscriber numbers to more than 1.8m currently. The combination of ongoing subscriber build and the $2 price rise from March 2019 underpinned the 79% increase in Stan’s revenue across the half. Further investment in content and marketing contributed to the 18% increase in costs. In combination, EBITDA improved by $35m, for an H1 total of $14m.

Stan continued to consistently build subscribers across the half – driven by the expansion of the group’s iconic series, led by new content from Fox/Disney, as well as Stan’s biggest summer of originals. Average weekly viewing hours per subscriber increased by more than 25% over the summer weeks.

Nine outlook: Expecting flat year-on-year

Nine’s March quarter FTA revenues are expected to be broadly flat, year-on-year as Nine’s superior ratings performance in 2019 and the start of 2020, has underpinned clear growth in revenue share. For the June half, Nine expects the FTA market to decline by around 5%, offset by growth in share of around 2 points (on pcp).

Continued strong growth is expected at 9Now, with EBITDA growth tempered by increased investment in content, as the business expands into the broader digital video market. The market is expected to continue to grow around current rates and for Nine to remain at the forefront of this growth.

Second half results at Nine Radio are expected to show a marked turnaround, as the cost base is reset. Revenue performance has been impacted by the rate of advertiser return to 2GB, which is expected to improve moving into 2021.

With growth up +19.9% on the year in readership – which is their highest result since December 2014 – the title remains popular in the magazine market, sharing stories that spark discussion and challenge perspectives. Editor-in-chief Eugenie Kelly and digital brand and content director Lorna Gray spoke to Mediaweek about what differentiates the title from similar brands; how they go about their advertising; and upcoming campaigns in the beauty, fashion and health space.

Kelly revealed that Harper’s Bazaar has always been about escapism and unapologetic luxury. “That’s the defining factor that sets us apart from other fashion titles,” said Kelly.

“I also believe the content we create has personality. Our stories are designed to spark discussion – whether it’s a viewpoint on why the word ‘badass’ isn’t doing feminism favours right now; or why splashy jungle prints are suddenly big news in fashion.

“Readers want to see things looked at in a different way. Bazaar is beautiful, but she’s also smart and funny. She doesn’t take herself too seriously.”

Editor, Eugenie Kelly

Kelly mentioned that in the print edition their annual sustainability and conservation specials are really resonating with readers right now based on the feedback they are receiving. “Our recent December issue was predominantly shot around the Whitsundays to create this ‘Paradise Lost’ concept and evoke memories of the iconic Australian summer. We shoot all around the world, but when we capture the beauty of our own backyard it really strikes an emotional chord.”

Kelly described the Bazaar reader as smart, informed and a lover of style and quality – someone who knows their brands. “The average age is 34-years-old, so that’s older than Vogue and Elle, but she is younger than an InStyle or marie claire reader. She’s a heavy social media user and twice as likely as the average 25-49-year-old to be on Instagram, YouTube, LinkedIn, and so on.”

The brand’s luxury advertisers invest in the best talent, stylists and photographers when creating their advertising imagery. Kelly said: “This means most of the time the advertising flows seamlessly and complements the editorial content we are creating. We are seeing an increase in motor advertising which is fantastic which I attribute to the recent introduction of a regular editorial motoring page. Our readers aren’t just obsessed with luxury fashion: it’s the whole lifestyle.”

Lorna Gray

A recent highlight for the brand was launching a successful two-day beauty festival in September 2019 held at Sydney’s Carriageworks, which Kelly said they plan to host again on a larger scale in September 2020. “The Beauty Bazaar is where women of all ages flock to hear about the latest trends and get expert advice, indulge in one-of-a-kind treatments and discover the buzziest new products,” she said.

“Think two days of elaborate installations, endless Instagrammable moments and a program jam-packed with panel discussions, where readers can meet everyone from Bazaar cover stars to beauty influencers turned entrepreneurs. Readers want to interact with the brand and have that immersive experience and we can offer that through beauty.”

Gray commented on upcoming campaigns in the beauty/fashion/health space and spoke further on their exciting beauty festival. “We’re very busy at the moment gearing up for VAMFF and MBFW, and then we’ll be focussed on the Beauty Bazaar which is Bauer’s first major consumer ticketed event,” said Gray.

“The Beauty Bazaar is the perfect example of the 360 approach in action as we took the strength of the Harper’s Bazaar brand beyond print and digital into a bricks-and-mortar event. In its second year, the event will still be powered by Bazaar but we’ll be operating at an enterprise level within the entire Bauer network, leveraging the strength of strategic brands.”

Kelly revealed that one of the highlights on their editorial calendar is the August issue: Visionary Women. She said to celebrate the launch of this issue, they’ll be holding a large special reader event where a panel of highly accomplished women from the worlds of politics, media, sport and the arts will share their experiences. “We also plan on expanding the Bazaar Man special (our October 2020 issue) as it was so well received by both advertisers and readers, along with Bazaar Brides (also October).

“Philanthropy-wise we also plan to support an organisation associated with animal conservation – it’s a little premature to reveal our plans yet, but needless to say, we will be hosting a series of events for them throughout 2020.”

Gray also commented on plans for the brand in 2020. “This is going to be a huge year for the fashion, beauty and health categories. Bazaar has seen tremendous audience growth in the past year, both in traffic and social media, so we’ll be looking to increase and diversify even further.  

“We’ve got great traction on IGTV serialised content — for Bazaar, that’s in the form of Fashion Retrospective and Everyday Face — so we’ll continue to focus our attention in this space. Bazaar is such an iconic and established luxury brand but we’re constantly looking for ways to reach new audiences and evolve the brand’s digital authority while continuing to build commercial innovation opportunities.”

The report, which is in its fourth year, also found that brand awareness is the main driver for the audio market growth, particularly for podcast advertising with 48% of agencies using podcasts primarily for branding, an increase from 35% in 2018.

Creative was identified by the Report as one of audio advertising’s greatest strengths and also its greatest challenges. The ease and speed of audio creative development has proven to be a great attraction for agencies, however only 17% of media agencies are consistently tailoring their creative to suit the different audio environments, which is vital when creative is the most important element of campaign impact. Although brand awareness is the number one objective of audio advertising, only one third of the buy-side are tracking these metrics and only 25% are tracking sales.

As advertisers increase their investment more focus is being paid to the metrics that are being used to measure success. Reach, frequency and completion are the most common metrics for both streaming and podcasts, though agencies are more confident in measuring these metrics for streaming audio compared to podcasts.

The Audio Advertising State of the Nation Report is a collaborative industry project, supported by 18 different media and tech companies, as well as industry body Commercial Radio Australia. Fieldwork was conducted by independent research company Hoop Group in December 2019 with more than 250 respondents.

Gai Le Roy, CEO of IAB Australia commented: “It’s clear the market has evolved from experimentation into a more strategically driven brand building approach to digital audio advertising, reflecting the growing consumer consumption of audio formats, particularly podcasting. We take very seriously our responsibility as the industry body to invest in research that provides the industry with objective market wide data and we’ll continue to push hard to secure valuable insights for marketers and agencies alike.”

Richard Palmer, co-chair of the IAB Audio Council and director of market development at Triton Digital said: “The benefits of digital audio advertising are now widely understood and the market is clearly embracing the branding potential different formats offer. Over the next 12 months we anticipate the industry will come to understand the need to move from repurposing existing ads and instead look to produce creative campaigns tailored to suit the environment in which it appears.”

Key headlines from the report include:

Nearly two-thirds of media agencies are regularly using streaming digital audio advertising. Call to action spots arethe  most popular format of streaming audio and have increased in usage strongly year on year.

Recorded radio spots are the most popular format, while usage of native audio and branded podcasts have experienced growth with potential for further growth over the next year.

Advantages of data and targeting continue to drive the adoption of programmatic trading in the audio advertising space and in a challenging ad market, price has increased as an influence.

Increasing brand awareness is the key objective for broadcast, streaming and podcast advertising and satisfaction with audio’s ability to meet this objective is high.

The full report will be available at www.iabaustralia.com.au 

Don’t miss the huge new edition of Podcast Week in Mediaweek Morning Report on Thursday.

The EISS Super Sapphire Trial Tribute match, to celebrate and recognise the region’s bushfire impacted communities, will be broadcast nationally by Fox Sports, Nine, Telstra LivePass and will be free on the NRL App.

It will be also be radio broadcast across 2GB, 4BC, Grandstand on ABC Radio and Crocmedia. Sky Sport will air the game into New Zealand and WatchNRL will stream the game internationally.

More than 100 reporters, commentators and crew will be on the ground as the Bega Recreation Ground is transformed into a state-of-the-art broadcast and media centre to bring the sell-out match to fans across Australia. For those in the area without tickets to the game, the NRL will establish a live site next to Bega Recreation Ground where the match will screened on a giant screen.

Rugby League (NRL) chief executive Todd Greenberg thanked broadcast and media partners and said the opportunity to showcase the event would not have been possible without the overwhelming support of Fox Sports, Nine Network, NEP, Telstra, 2GB, News Corp Australia, ABC Radio, Australian Community Media and Crocmedia.

“Moving this trial match from Sydney to Bega to help the Sapphire Coast region has come with some logistical challenges, and I cannot thank our media partners enough for their efforts to ensure as many people as possible can experience such an important day,” Greenberg said.

“This event shows how much rugby league means to its community and we are proud to be able to give back to a region which endured so much during this year’s bushfire disaster. Our game brings people together and we are so grateful to our media partners for joining us and playing such a significant role in sharing this unique moment in our sport.”

In addition to the broadcast, Fox Sports will also be in the south coast region from Thursday, travelling with players to various school and community visits, and it will host a free Oz Tag competition for locals on Friday at the Bega Showground.

The NRL also thanked corporate partners including EISS Super, Treasury Wine Estates, Coca-Cola, Carlton & United Breweries, Telstra, Diageo and Youi for their support of the event.

In 2020, Triple M NRL will be led by a team whose insight into the game is unrivalled on radio: Peter Sterling, Gorden Tallis, Ryan Girdler, Wendell Sailor, Mark Geyer, Emma Lawrence, Tony Squires, Paul Kent, Ben Dobbin, Brent Read and James Hooper. They will be joined by two of rugby league’s best play-by-play callers Dan Ginnane and Anthony Maroon.

Current stars of the game will also be a regular part of the team – Parramatta’s Mitch Moses, Cronulla’s Wade Graham, Titan’s Jai Arrow, & South’s Damien Cook will all join the Saturday Scrum on a rotating roster throughout the season.

Triple M Footy officially kicks off this weekend, with Wendell Sailor, Ryan Girdler and Anthony Marron bringing listeners the Charity Shield match between South Sydney and St George Illawarra Dragons Live from 7pm.

2020 – Triple M NRL Broadcast
Thursday Night coverage: 7:00pm – 10:00pm
Friday Night coverage: 6:00pm – 8:00pm

Saturday Scrum: 12:00pm – 3:00pm –  Ryan Girdler, Emma Lawrence, Sterlo, Tony Squires and rotating guests
Saturday afternoon game: 3:00pm – 5.30pm

Sunday Sunday Sin Bin: 1:00pm – 4:00pm –  Paul Kent, Gorden Tallis, Anthony Maroon and James Hooper
Sunday afternoon game: 4.00pm – 6.30pm

—

Photo caption: Del, Maroon, Emma, Dan, MG, Girds

However, two new shows have made strong impressions on the TV Demand charts finding themselves in prominent spots for the first time in 2020 in Narcos: Mexico and Outlander.

Netflix’s Narcos: Mexico was originally planned to be the fourth season of Narcos, but ended up becoming a new companion series that focuses on the illegal drug trade in Mexico. The show’s second season was released on February 13 and continues to cover the rise of the Guadalajara Cartel. The series features an ensemble cast led by Michael Peña as Kiki Camarena and Diego Luna as Miguel Ángel Félix Gallardo.

Outlander has surged up the Overall TV chart in Australia and New Zealand after releasing its 13th episode fifth season on February 16. The series airs on the Starz network in the US and follows Caitriona Balfe who plays a married former World War II nurse who is transported back to Scotland in 1743 and is caught up in the Jacobite risings. The series is based on a book series of the same name by Starz.

The last week of summer will be remembered for another week dominated by Nine and Endemol Shine Australia’s Married At First Sight. After bumper crowds of 1.2m and then 1.09m, the third episode did 1.020m. Another four couples met families and friends and it was business as usual – a cheating scandal was revealed and one couple split and then quit the show after spending the night apart and deciding the experiment is not working for them.

Also contributing to Nine’s first place finish was A Current Affair on 696,000 after starting the week over 700,000.

Paramedics did 646,000, managing to grow after a very impressive 627,000 last week.

On Seven Home and Away did 549,000 after 600,000 on Monday.

Pub grub was on the menu at the Imperial Hotel on My Kitchen Rules: The Rivals with 473,000 watching after 500,000 on Monday.

The Good Doctor followed with 326,000.

The Project was on 420,000 after 7pm after 466,000 on Monday.

Australian Survivor: All Stars saw the departure of Phoebe after David managed to secure a second immunity idol – a first for Australian Survivor. The Tuesday episode did 584,000 after the series started the week on 647,000.

NCIS did 258,000, followed by NCIS: Los Angeles on 169,000.

The ABC’s best after 8pm was Griff’s Great Australian Rail Trip with 551,000.

Preceding it was Sam Hawley in Saudi Arabia for Foreign Correspondent with 490,000.

Rock Stein’s Road to Mexico then did 239,000.

On what has become a massive night for railway enthusiasts, Michael Portillo continued his travels on Great Australian Railway Journeys with 330,000.

The return of the Tuesday current affairs programs, now a trio, did the following numbers:

Insight 205,000
Dateline 127,000
The Feed 70,000