Nine profit down 9%, looks to $100m cuts.

Nine will look to cut $100m in costs over three years following a sharp drop in half year profit.

Nine reported a profit of $101.86 million, a drop of 41%, however revenues increased by 65.7% to $1.18 billion.

CEO Hugh Marks 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.”

But cuts will focus on international content including one-off sporting events such as the Ashes and Cricket World Cup.

Marks said these were “costs that will not inhibit our ability to continue to invest in the growth opportunities around premium revenue and digital video.”

Almost 40 per cent of Nine’s earnings were now sourced from digital platforms.

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

Stan grew its active subscriber numbers to more than 1.8m. The combination of ongoing subscriber build and the $2 price rise from March 2019 underpinned a 79% increase in revenue. Average weekly viewing hours per subscriber increased by more than 25% over summer weeks.

“Nine is in a unique, and incredibly exciting position,” Marks continued. “We own platforms across linear television, digital, print and radio – leading assets, and all of which are evolving towards digital distribution. Almost 40% of our earnings are now sourced from growing digital platforms. Together with data and technology, we have the ability to distribute messages to mass audiences as well as to small but valuable, addressable audiences. We have the systems to ensure seamless and efficient delivery for advertisers and we have the balance sheet to invest in the content that works for Australians.“

Source: news.com.au

13 Comments:

  1. While Nine have done better due to the digital assets they have. They still have not innovated enough to keep up with how Australian’s watch TV. They still move shows around their schedules which irritates fans who want to watch shows at the same time every week.

    Some shows are not broadcast timely after their airing in the US. They can’t rely on US drama to prop up their schedules anymore. I’d like to also see the networks reduce the amount of ads they have in a prime time show. Charge more but have less of them. Advertisers may prefer it less clutter and their brand won’t get lost.

    Use their BVOD services better. Maybe put shows like MAFS on the service a week in advance so people can binge watch if they wish. Why should broadcast be the priority? BVOD is growing use it to it’s full potential.

    Take a risk with new formats and stop recycling the some rubbish relatity…

    • Broadcast is important because it still delivers large audiences for sport, news and contest shows, and they were where most of the money is. As OzTAM’s VOZ data shows the reach of broadcast is still 82% of households.BVOD is growing, especially for drama, but it’s still only a small proportion of their revenue. US dramas don’t rate much these days with <55s, and even the over 55s are recording and skipping the ads.

    • Trying to watch something on 9Now at the moment and 45 minute program has 6 adverts playing each break, way to kill off any desire to watch anything else on their service, I understand some ads but come on it seems worse than regular tv as you can’t skip the ads (maybe that’s the point!)

  2. I think you could do a deep dive story into the changing landscape of TV, David, if you are so inclined. The way we consume TV/entertainment is changing rapidly. It would be interesting to see how the big networks are reacting to these sharp downturns (not just be slashing 100 million) but by how they will make TV in the future, what platforms people are watching their content on now? (breakdowns on percentages over last 5 years etc), where it’s all heading? Surely there are big round table meetings at these networks discussing how they make their networks sustainable is this vast changing landscape. The reality is, people are consuming more “TV” – hours more per day than ever before, but the networks are suffering. Job will go, left right and centre, and to survive in an industry that people love (and hate) to work in, what will producing/directing look like in the future…

  3. I’m a tad lost ,when he says cuts will focus on cuts to one off events like Ashes and World Cup I thought the ashes last year was it for channel 9 and the T20 World cup starts October I think.

    • If Nine doesn’t renew the rights to ICC from 2021 onwards, this will leave to Pay TV/Streaming platform (TMK). The T20 World Cup will possibly be its last cricket to be shown on 9 this year, marking an end of an era to Nine’s cricket coverage after more than 40 years. The thing now is what is the future for cricket on FTA?

  4. AFL and NRL will go out on their own and will become their own streaming channels just like MLB and other sports in the USA. the FTA networks will maybe get 2 games a week. thats a probable becuase they wont get the same amount of $$ again off the FTA

  5. With Seven, Nine and Foxtel all reporting loses, it will be interesting to see what happens with NRL and AFL rights go up for tender next year (or maybe 2022)

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