‘It’s not the 80s’ says Nine’s Stephenson on overnights; Netflix will ‘lose money’ with ad model in Australia

“You’d have to be sitting under a rock not to realise that people watch content through an antenna, through a live stream via the internet, and on-demand,” said Nine’s Michael Stephenson at the closing session of Mumbrella360 this week.

On stage alongside Spark Foundry’s CEO, Imogen Hewitt, and Westpac Group’s head of media, Carly Boyle, on the ongoing importance of overnight ratings, Stephenson said: “I just think it’s not the eighties. You’re never going to get rid of overnight television ratings. Of course, it’s the currency by which we trade, but it’s only looking at everything that happens through one lens.”

Hewitt, Stephenson, and Boyle in ‘The Marketing Newlyweds Game’

The trio was on stage as part of a Marketing Newlyweds gameshow, testing out how well each of them knew their partner’s businesses and current priorities.

Hewitt, as the head of a media agency, said the metric was “important, yes – but not the be all and end all”.

“One of the things that I think is important to recognise at the moment is that it’s a way of making sure that our clients are getting what they pay for. And so that is kind of important, I mean, it’s very important.

“But there is also a change in consumer behaviour. We’ve talked about it a little bit, but that particular metric doesn’t really give us any insight into, or is a sufficient insight into the important whole story.”

Boyle agreed that, “it’s a good efficiency measurement, but it’s not necessarily the value that I would be looking for, which I think is where we’re going to”.

Stephenson continued: “So, on a daily basis, to Imo’s point, when someone’s bought a total television campaign, they should be able to get overnight an overview and an understanding of how many people saw that campaign on each of those platforms. And so overnight ratings will continue to be always a thing, but they will continue to look different from what they have historically done.”

Boyle: Overnights ‘not the value I’d be looking for’

“I talk a lot in our business about we’re accelerating towards our digital future, but don’t leave the past behind too quick, and I think everyone should be really conscious of that.”

During the gameshow discussion, the panel was asked about their favourite mediums, with Stephenson – who heads up ad revenue for each of Nine Entertainment Co.’s broadcast, digital, radio, and publishing assets – saying streaming is something he is “massively interested in” the concept of it.

“The fact that at a point in time, not too far in the future, all of the streaming platforms that we all have will be larger or certainly getting closer to the size of the linear channels. And so that to me is, I think is a fascinating thing to keep an eye on.”

When asked about Netflix’s imminent ad-supported model, he said he has an “enormous amount of respect clearly for Netflix”, and that they have an amazing global business with scale and in Australia particularly, it has done well.

“They have about five million active subscribers [in Australia], they’re the leading subscription business in the market and this market for them yields on a per consumer basis arguably more than any other market in the world, which is why I sort of struggle a little bit to think about, you know, will they launch in this market?”

“What will their rollout strategy be? And what will the impact be when it happens? The reality is that they would lose money by operating an ad-funded product in this market because of the dynamics that I just mentioned, and it would be an additional tier, so it wouldn’t be an additional subscriber driver.”

“It would be the expense probably of existing subs, so I think that works in markets like Asia and South America where they’re driving subscribers and there’s a low propensity to pay, but in markets like Australia, I struggle to see how the economics of that work.”

Last week Netflix appointed Microsoft as its global technology and sales partner to help power its first ad-supported subscription offering, which appears to have an imminent launch.

There are currently few details about how that will roll out in Australia.


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