Mike Sneesby delivered his first Nine results this week, revealing how Australia’s biggest media group performed over the previous 12 months.
Sneesby spoke with Mediaweek about the results and how he got on top of all Nine’s different divisions.
Television: Nine and 9Now
Television combined, revenue increased by 12% and EBITDA by 73%, with growth across both Nine Network and 9Now.
9Now continued to grow, with revenue growth of 46%. EBITDA of $73m was up 48% on FY20.
Mike Sneesby didn’t acknowledge that Seven is making 2021 any more difficult for Nine in terms of finding an audience and generating revenue.
“Our team has a great strategy for this year’s back end in terms of programming and the way that they’re thinking about next year and beyond. We have safe hands like Stepho (chief sales officer Michael Stephenson) and Michael Healy (director of television).
“I have been working closely with them getting across free-to-air which is very different to subscription television in terms of the revenue model and how you think about an audience.”
The CEO claimed that Nine remains a clear leader in the commercial demos. “We continue to select content around delivering into those commercial demos for Nine and increasingly for 9Now. That underpins a great revenue result.”
Publishing: The SMH, The Age & The AFR
Publishing revenue was $505m with a combined EBITDA of $117m, up 28% on FY20.
Growth in digital subscription revenue for the year more than offset decline in print sales.
Getting across Nine’s publishing assets was possibly the division where Sneesby needed to do the most work in terms of learning the business.
“There is no chief executive who could have taken this role with detailed experience in every part of this organisation. It’s been really important to rely on the executive team. Part of that has been Chris Janz who will soon finish at Nine, somebody who has contributed a great deal to the business and where it’s at today. We have an extremely competent pair of hands in James Chessell [new MD Publishing] to run publishing.
“We also have Alex Parsons [new chief digital officer] returning to run digital across the board who will work closely with me across a number of our growth initiatives.”
Radio: 3AW, 2GB, 4BC, 6PR
Coupled with a double-digit cost decline, Nine Radio reported EBITDA of $8m.
Radio revenue declined YOY from $103m to $91m.
The most challenged sector is the one with perhaps the most dominant ratings success – radio. Until recently both 2GB and 3AW were unchallenged leaders in their respective markets.
Mike Sneesby: “Clearly, the radio business had some real challenges around advertising, boycotts, and our approach to the on-air product. Credit should go to Tom Malone [Nine Radio MD] and his team at Nine Radio who have completely reshaped that business in a way that focuses on commercial outcomes. They have now right-sized the cost base. Our half year EBITDA for radio was up significantly and that is a function of getting the costs right in that business. While radio has been impacted more by Covid and lockdowns than our other advertising categories, we’re starting to see the opportunity for that to come back. And on a new cost base that means much greater leverage to profitability as the market comes back.”
Stan active subscribers grew from 2.2m to 2.4m YOY, Stan Sport has 250,000 subscribers.
The business Sneesby launched has been increasingly operating in a world where content giants dominate internationally and where consolidation is starting to play out.
“The streaming space over the years has always been an exciting and moving feast. These days [acting Stan CEO] Martin Kugeler and the team are doing a fantastic job over at Stan and taking that business forward. As we look at the evolutions in the international category, there really are no big changes beyond the sorts of things that we’ve seen year-on-year.
“Go back to the earliest days when Stan launched, we were launching in Australia with Netflix still to start their service and a lot of speculation around what Netflix would do to Stan. We’ve seen the growth of Netflix, we’ve seen Disney launch their service, and Amazon and Apple enter the market. It’s a really exciting space. Internet TV is still at a relatively early stage in its overall development. Stan is really well placed in that and the team’s going to continue to do a great job.”
One of the ways Stan is successfully safeguarding against any potential loss of international content is with local production.
“Original content is something we’ve produced since we started the business. As you’ll recall, we announced our first original production just months after launching the service. That strategy has been very successful for the business. This is really an extension of that strategy. Creating our own content gives us a lot more control over our destiny so it’s certainly an important part of the strategy.
“Our long-term agreements continue with supply from Hollywood studios, and you’ll note a number of those deals were renewed recently.”
When asked if Martin Kugeler is in the running to be the next chief executive of Stan, Mike Sneesby said: “I was very clear when I came into this role at Nine that we wouldn’t be going out to immediately commence a search for the chief executive. Martin is doing a brilliant job over there with the rest of the team. And at this stage, I’m not going to speculate or talk about what happens long term. The business is in great shape and it’s in great hands.”