Revenue for April drops 29.8% across Nine’s broadcasting division
The impacts of the COVID-19 pandemic are being felt at Nine with the media company reporting a 29.8% drop in revenue for the month of April across its broadcast division. Moreso, May is likely to be worse again, warned the business in a presentation to the Macquarie Australia Conference.
However, there were some shining lights in the media company’s report, including a 13% rise in digital subscriptions for the calendar year to date and growth in broadcast video on demand (BVOD) and Stan.
The report, which was presented at the 2020 Macquarie Conference, focuses on Nine’s efforts to reposition its business away from a focus on broadcast and diversify its market offerings. Reporting linear TV to now be less than 50% of revenue for the business, compared to three years ago, the media company focused on its other divisions, including Stan, Domain and its Metro Media publishing arm, with assets including The Sydney Morning Herald and The Age.
Associated with that diversification, Nine is now reporting 70% of its revenue comes from advertising, down from 98% in 2017. Domain offers 7% of revenues and subscriptions and other are at 23%.
Nine is reporting a rise in audience figures across both linear and BVOD year-on-year and a 4% monthly growth across Metro Media. Stan is also reporting a 21% rise in subscriptions over the past three months.
In March, Nine flagged the potential for $200m in savings across 2020, in response to the COVID-19 pandemic, fast-tracking its existing savings plans. $130m in these theoretical savings were expected to come from the NRL, which was predicted to cancel its 2020 season. However, tentative plans are now underway for the sporting code to begin its season on May 28.
The broadcasters, Nine and Foxtel, are yet to reach a final agreement with the NRL about broadcast fees in the wake of the new, adjusted season.
During the Macquarie event today, Marks said it’s not a given the NRL will be part of the media company’s future.
“It has to pay its way like all of our content does, and it it doesn’t…. we are less reliant on that as a revenue source,” he added.
“It’s a sad statement that if the NRL proceeds that it will be a net negative to our results.”
The business is still planning to deliver $100m-$150m in free-to-air (FTA) savings across the next three years, with sports rights and sales costs flagged as focuses in the presentation.
Nine reported a FTA revenue share of 43.9% for the March quarter, up 3.1 points.
Radio revenue for the third quarter of FY20 has fallen 12.4% and radio costs are down 6%.
topics
AFR
coronavirus
COVID-19
Domain
Metro Media
Nine
Nine radio
NRL
SMH
Stan
The Age
The Australian Financial Review
The Sydney Morning Herald
They really need to sort out the revenue on 9Now. The growth appears woeful considering the BVOD offering…
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