When talking to Mediaweek about the impressive Nine Entertainment Co first-half results released at the end of last week, chief executive Mike Sneesby was sure to spread the responsibility: “It’s been a real team effort during a time when it would have been easy to be distracted with things like Covid. Everyone has done a fantastic job of remaining focussed and staying true to the strategy which has delivered a fantastic result.”
Below are the highlights of our conversation with Sneesby.
Nine: Utilising FTA and streaming
“We have obviously been following the changes in viewing behaviour and the way people consume content. The audiences haven’t fundamentally changed what they want to consume. Michael Healy [Nine’s executive director of television] and the programming team have remained focused on delivering on programming that talks to core commercial demographics which allows us to maximise the profitability of our programming on the network. The way we think about audience resonates very well with BVOD which is where we are seeing great success.
“You can see from the numbers audiences still love Married at First Sight. With Total TV audiences close to 2m it is a function of great programming and having a strategy that thinks across broadcast and on demand.”
Nine is one of the FTA networks that haven’t yet signalled much drama development into the future. “Our business has evolved so dramatically over recent times. Stan now commissions drama productions and has had some of the biggest being made in Australia. This year we will see an increase in that number including some from the team at Nine. I regularly have conversations with Michael Healy about projects that are in market or being pitched and how they might fit across our platforms.”
Sneesby acknowledged closer co-operation between the television and streaming businesses. “As IP-delivered television continues to grow you will see a lot of companies experimenting with different ways of distributing formats. We are still quite early in the journey of television being delivered by the internet. Things will continue to evolve, and when we look at our platforms, we think about the things that will give us the greatest differentiation and create opportunities for audiences in a premium subscription environment.
“Things you will see coming out of that is a shift in focus in the originals to reality TV programming. We are looking at programming [for Stan] that is evergreen and we have some projects in the pipeline which utilise our reality TV capability at Nine for Stan.
“We are also using the great news stories that come out of our television and publishing divisions and developing particular stories into docuseries. Last year we had Nick McKenzie break the story of the neo-Nazi movement in Melbourne in our mastheads. It then featured in a 60 Minutes story on FTA and 9now. That will soon be extended into a docuseries that will feature on Stan.”
Nine’s results do the talking for ratings performance
“The way we look at the television business now is very different. We look at the Total Television result for the broadcast business. I am not going to get drawn into a conversation or debate over ratings and demographics.
“When you look at our result you see [we are] delivering commercial demographics, with a win across the demos excluding the Olympic Games. You see in the results what that does for revenue and profitability. I will let our results speak for themselves. I am not going to get into a discussion around ratings and who won what. Nor will I speculate about a ratings forecast.”
Sports rights: NRL delay and Stan’s load
When asked about the lengthy NRL negotiations that concluded with a new deal announced late in 2021, Sneesby said negotiating sports rights are not as straightforward as it might seem.
“Nine is a unique business today. There is no other television business in the Australian market that has the assets that we have. We can work with a sport and distribute the product across broadcast television, BVOD and subscription through Stan Sport. We don’t just discuss the licence fee, but what is it we can bring to the sport outside of direct revenue as we help build that sport. That, quite frankly, was a key part of our NRL discussions.”
With regard to any need for more codes in the Stan Sport portfolio, Sneesby said it was never the plan to be an aggregator of all sports. “As the world of internet television evolves, it is our view the future of distribution of sport is going to be a lot more fragmented. We look at any new sport through a very commercial lens. Any sport has to be able to deliver a positive margin over the life of the deal. The business has a great roster of sport now, it doesn’t need to expand in order to be successful, but we will expand if the numbers make sense.”
Sneesby said the Stan Sport audience continues to grow, despite no guidance on subscribers since the previous reveal they had around 250,000. “While we are not revealing subscriber numbers on an ongoing basis, we have seen material growth. What we are seeing is there has been a lot less seasonality of subscribers. Because of the job the team has done adding new sports and rounding out the proposition, we are seeing a much stickier proposition.”
Nine Radio: AM licences for sale?
The chief executive wouldn’t be drawn on whether Nine has looked at selling its underperforming AM music stations. The deal with Ace Radio to lease the frequencies for 2UE, Magic 1278 and 4BH is perhaps the next best thing. “The core of our radio business is talk radio and therefore the most important thing is the strength of that network and its profitability. What Tom Malone [Nine Radio chief] has done in executing the [Ace Radio] deal underpins the strategy to be the leader in talk radio and maximise profitability.”
Facebook and Google revenues
Nine didn’t update how lucrative the deals with Facebook and Google have been for the news publishing business. “The terms of the commercial arrangements with both Facebook and Google are confidential,” said Sneesby.
Nine revealed in the FY21 result that two tech giants contributions would see a growth in EBITDA of between $30m–$40.
“Since that guidance we have significantly lifted our view on the growth in EBITDA from publishing and 100% of that incremental growth we are now guiding to is coming from the underlying business and is unrelated to Google or Facebook.”