Original series and 75% conversion rate driving Stan to be cash positive in 2018, says CEO
Stan CEO Mike Sneesby has said the streaming platform’s three months free trial offer is seeing a 75% conversion into paying subscribers.
The comments come as Stan reveals its commitment to Australian content with four new TV series in development – Merchants of Misery, The Other Guy, All Thumbs and Chaperones – to complement a second season of Stan’s first Originals series No Activity.
Speaking with Mumbrella, Sneesby said Stan uses the active subscriber figure as a benchmark, with the company citing the 1.2m users who have subscribed, and input their credit card details, since the launch of the platform.
“The next number was the 550,000 active subscribers. Those are all subscribers that are alive and active on the platform and it is a combination of paying subscribers as well as those people on a free trial,” he said.
“We’re converting those free trials at 75% into paying subscribers.”
On Stan’s active subscriber target, Sneesby said it is not something the company talks about publicly.
“Our growth rate is accelerating, we are signing up now double the number of subscribers, on average, daily to what we were 12 months ago. Sign-up rates are accelerating and our conversion to paid and retention rates are increasing.
“We have disclosed the business is projected to be cash positive in financial year 2018. We haven’t said exactly when but our business plan, for which we are tracking in most cases on plan and in some cases ahead of plan in certain business metrics, for a FY18 cash positive.”
The comments around Stan’s audience figures come ahead of the launch of a new brand push which Sneesby hints will be around pushing awareness of Stan further.
Sneesby: Wolf Creek was the biggest premiering show
“Our marketing is always on. We’ve been in market with strong brand activity since the day we launched and that hasn’t changed. We are working through the next evolution of that,” he said.
“The really exciting part of that is we have brand research constantly in market, so we’re dipping into market to see what the view is.
“What the research is telling us is extremely exciting for us in terms of the awareness of the brand. Without telling you specifics of the next phase, certainly it is really about taking that huge awareness of the Stan brand and accelerating the conversion of it by letting more and more consumers know about the value that we are bringing.”
When it comes to how original series content performs compared to some of the first-run international series, Sneesby said he doesn’t like to compare shows, however, he said Wolf Creek was the “biggest premiering show” on the platform, “bigger than any of the major international acquisitions that we have”.
“It’s been a phenomenal hit for us as a original show. No Activity performs up there with the best of first run shows. Wolf Creek has an existing brand and a franchise to it,” he said.
“A show that has an existing brand like Wolf Creek is always going to perform better because people know about it.
“By pure volume, one of the most watched shows on the platform is Friends. But one of the reasons for that is, Friends has 236 episodes to it.
“Wolf Creek has been our biggest week one performer on the platform. What we do see is with the big shows when they return, like Better Call Saul, or shows returning for subsequent shows, they get bigger and bigger every year because more people know about them.”
On the value of original programming to Stan, Sneesby said it was about offering a “proposition that is valuable and unique to a viewer”.
“The most valuable and unique content that you can create is something that is absolutely original and completely exclusive to your own platform. That has two great impacts for the business,” he said.
“One, it gives you that pure ownership of a particular show and with that comes your ability to do more with marketing, to collaborate with talent for social media promotions and to do great premieres and to really be in a collaborative arrangement with production companies and talent.
“It also has a halo effect on your brand, particularly for a growing brand like Stan that people are trying to work out where we fit within this ecosystem, by going out and making the bold statement that we’re in the game of making television and the big distribution deals we’ve had like the one with Wolf Creek.
“Those things give a brand halo effect as people don’t understand licensing costs around content, but they do understand the cost around making a show.”
Sneesby denied Stan was benefiting by Netflix’s lack of interest in creating an Australian Netflix Originals production.
“We’d love it if Netflix jumped into the space,” he said.
“Clearly Stan is a company born and bred in Australia, it employs people on the ground, we’re not hand on chest, waving the flag but we are absolutely delighted that we can be bundling serious chunks of our content investment back into the Australian economy.
“If Netflix were to come along and do it as well and put investment back into this market, it’d be good for everyone.”
In terms of other competition – namely Foxtel’s Presto – Sneesby said he’s not concerned “about who’s going to take first or second prize in this market”.
“We’ve got a very clear business plan, we’ve had a very clear business plan since day one, we’re smashing our numbers, the market is absolutely booming, we’re delighted with that result. I don’t know where anyone else stands,” he said.
Sneesby says it is Stan’s launch that pushed Netflix to commit to launching locally.
“We launched our service on Australia Day 2015, about 18 months ago, and there’s no doubt that the moves we made in 2014 to acquire some big studio deals, was really what got the ball rolling for Netflix to accelerate their move into this market,” he said.
“There’s no doubt the launch of Stan is what kicked off this market and over the past 18 months we’ve seen a very rapid adoption in streaming in a big part of the consumer market in day-to-day television watching.”
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